Exhibit 99.1

 

Press Release    LOGO

 

COSTCO WHOLESALE CORPORATION REPORTS SECOND QUARTER AND YEAR-TO-DATE

OPERATING RESULTS FOR FISCAL 2020 AND FEBRUARY SALES RESULTS

ISSAQUAH, Wash., March 5, 2020 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2020, ended February 16, 2020.

Net sales for the quarter increased 10.5 percent, to $38.26 billion from $34.63 billion last year. Net sales for the first 24 weeks increased 8.1 percent, to $74.49 billion from $68.94 billion last year.

Comparable sales for the second quarter fiscal 2020 were as follows:

 

     12 Weeks     12 Weeks     24 Weeks     24 Weeks  
           Adjusted*           Adjusted*  

U.S.

     9.1     8.1     7.0     6.6

Canada

     8.9     6.8     5.8     5.9

Other International

     7.9     7.1     5.5     5.8

Total Company

     8.9     7.9     6.6     6.5
  

 

 

   

 

 

   

 

 

   

 

 

 

E-commerce

     28.4     28.0     17.4     17.3
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Excluding the impacts from changes in gasoline prices and foreign exchange.

Due to Thanksgiving occurring a week later this year, for the quarter: total and comparable sales were positively impacted by approximately one-half percent; and e-commerce sales were positively impacted by an estimated 11 percentage points.

Reported net income for the quarter was $931 million, or $2.10 per diluted share, compared to $889 million, or $2.01 per diluted share, last year. Net income for the first 24 weeks was $1.77 billion, or $4.00 per diluted share, compared to $1.66 billion, or $3.74 per diluted share, last year.

For the four-week reporting month of February, ended March 1, 2020, the Company reported net sales of $12.20 billion, an increase of 13.8 percent from $10.72 billion last year. For the twenty-six week period ended March 1, 2020, net sales were $80.76 billion, an increase of 8.5 percent from $74.42 billion last year.

Comparable sales for the February and year-to-date periods ended March 1, 2020, were as follows:

 

     4 Weeks     4 Weeks     26 Weeks     26 Weeks  
           Adjusted*           Adjusted*  

U.S.

     12.4     11.6     7.5     7.1

Canada

     10.2     10.4     6.2     6.3

Other International

     12.5     13.5     6.1     6.5

Total Company

     12.1     11.7     7.2     7.0
  

 

 

   

 

 

   

 

 

   

 

 

 

E-commerce

     22.6     22.7     17.9     17.9
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Excluding the impacts from changes in gasoline prices and foreign exchange.


Press Release    LOGO

 

February sales benefited from an uptick in consumer demand in the fourth week of the reporting period. We attribute this to concerns over the Coronavirus and estimate the positive impact on total and comparable sales to be approximately three percent.

Costco currently operates 785 warehouses, including 546 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, March 5, 2020, and is available via a webcast on www.costco.com (click on Investor Relations and “Play Webcast”).

Certain statements contained in this document and the pre-recorded telephone message constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health care costs), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, global disease threats, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Company does not undertake to update these statements, except as required by law.

 

CONTACTS:   Costco Wholesale Corporation
  Richard Galanti, 425/313-8203
  Bob Nelson, 425/313-8255
  David Sherwood, 425/313-8239
  Josh Dahmen, 425/313-8254


Press Release    LOGO

 

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data) (unaudited)

 

     12 Weeks Ended     24 Weeks Ended  
     February 16, 2020     February 17, 2019     February 16, 2020     February 17, 2019  

REVENUE

        

Net sales

   $ 38,256     $ 34,628     $ 74,492     $ 68,939  

Membership fees

     816       768       1,620       1,526  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

   $ 39,072       35,396       76,112       70,465  

OPERATING EXPENSES

        

Merchandise costs

     34,056       30,720       66,289       61,343  

Selling, general and administrative

     3,743       3,464       7,475       6,939  

Preopening expenses

     7       9       21       31  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     1,266       1,203       2,327       2,152  

OTHER INCOME (EXPENSE)

        

Interest expense

     (34     (34     (72     (70

Interest income and other, net

     45       46       80       68  
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     1,277       1,215       2,335       2,150  

Provision for income taxes

     330       314       532       472  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income including noncontrolling interests

     947       901       1,803       1,678  

Net income attributable to noncontrolling interests

     (16     (12     (28     (22
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 931     $ 889     $ 1,775     $ 1,656  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:

        

Basic

   $ 2.10     $ 2.02     $ 4.02     $ 3.77  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 2.10     $ 2.01     $ 4.00     $ 3.74  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calculation (000’s):

        

Basic

     442,021       440,284       441,920       439,721  

Diluted

     443,727       442,337       443,704       442,535  


Press Release    LOGO

 

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in millions, except par value and share data) (unaudited)

 

Subject to Reclassifications    February 16, 2020     September 1, 2019  

ASSETS

    

CURRENT ASSETS

    

Cash and cash equivalents

   $ 7,786     $ 8,384  

Short-term investments

     929       1,060  

Receivables, net

     1,988       1,535  

Merchandise inventories

     11,850       11,395  

Other current assets

     1,150       1,111  
  

 

 

   

 

 

 

Total current assets

     23,703       23,485  
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT

    

Land

     6,696       6,417  

Buildings and improvements

     17,853       17,136  

Equipment and fixtures

     8,406       7,801  

Construction in progress

     906       1,272  

Accumulated depreciation and amortization

     (12,380     (11,736
  

 

 

   

 

 

 

Net property and equipment

     21,481       20,890  
  

 

 

   

 

 

 

OTHER ASSETS

    

Operating lease right-of-use assets

     2,596       —    

Other long-term assets

     1,002       1,025  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 48,782     $ 45,400  
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

CURRENT LIABILITIES

    

Accounts payable

   $ 11,072     $ 11,679  

Accrued salaries and benefits

     3,415       3,176  

Accrued member rewards

     1,243       1,180  

Deferred membership fees

     1,865       1,711  

Current portion of long-term debt

     500       1,699  

Other current liabilities

     4,600       3,792  
  

 

 

   

 

 

 

Total current liabilities

     22,695       23,237  

OTHER LIABILITIES

    

Long-term debt, excluding current portion

     5,099       5,124  

Long-term operating lease liabilities

     2,446       —    

Other long-term liabilities

     1,543       1,455  
  

 

 

   

 

 

 

TOTAL LIABILITIES

     31,783       29,816  
  

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

    

EQUITY

    

Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding

     —         —    

Common stock $0.01 par value; 900,000,000 shares authorized; 441,622,000 and 439,625,000 shares issued and outstanding

     4       4  

Additional paid-in capital

     6,506       6,417  

Accumulated other comprehensive loss

     (1,280     (1,436

Retained earnings

     11,384       10,258  
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     16,614       15,243  

Noncontrolling interests

     385       341  
  

 

 

   

 

 

 

TOTAL EQUITY

     16,999       15,584  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 48,782     $ 45,400  
  

 

 

   

 

 

 

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