Exhibit 99.1
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COSTCO WHOLESALE CORPORATION REPORTS THIRD QUARTER AND YEAR-TO-DATE

OPERATING RESULTS FOR FISCAL 2020

ISSAQUAH, Wash., May 28, 2020 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (12 weeks) and the first 36 weeks of fiscal 2020, ended May 10, 2020.

Net sales for the quarter increased 7.3 percent, to $36.45 billion from $33.96 billion last year. Net sales for the first 36 weeks increased 7.8 percent, to $110.94 billion from $102.90 billion last year.

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

 

       12 Weeks      12 Weeks      36 Weeks      36 Weeks  
              Adjusted*             Adjusted*  

U.S.

       5.9      8.0      6.6      7.1

Canada

       -2.5      3.0      3.1      5.0

Other International

       6.2      12.2      5.7      7.9

Total Company

       4.8      7.8      6.0      6.9
    

 

 

    

 

 

    

 

 

    

 

 

 

E-commerce

       64.5      66.1      31.8      32.3
    

 

 

    

 

 

    

 

 

    

 

 

 

 

*

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

Reported net income for the third quarter was $838 million, or $1.89 per share, which was negatively impacted by $283 million pretax, or 47 cents per diluted share, from incremental wage and sanitation costs related to COVID-19. Last year’s reported third quarter net income was $906 million, or $2.05 per diluted share, which included the benefit of a non-recurring tax item of $73 million, or 16 cents per share.

Net income for the first 36 weeks was $2.61 billion, or $5.89 per diluted share, compared to $2.56 billion, or $5.79 per diluted share, last year.

Costco currently operates 787 warehouses, including 547 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, 12 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, May 28, 2020, and is available via a webcast on www.costco.com (click on Investor Relations and “Play Webcast”).

Certain statements contained in this document 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


  
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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, COVID-19 related factors and challenges, including among others, the duration of the pandemic, the unknown long-term economic impacts, reduced customer shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforce due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, 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


  
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COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

Draft 5/27/2020 2:59 PM

 

     12 Weeks Ended      36 Weeks Ended  
     May 10, 2020     May 12, 2019      May 10, 2020     May 12, 2019  

REVENUE

         

Net sales

   $ 36,451   $ 33,964    $ 110,943   $ 102,903

Membership fees

     815     776      2,435     2,302
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenue

     37,266       34,740      113,378     105,205

OPERATING EXPENSES

         

Merchandise costs

     32,249     30,233      98,538     91,576

Selling, general and administrative

     3,830     3,371      11,305     10,310

Preopening expenses

     8     14      29     45
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income

     1,179     1,122      3,506     3,274

OTHER INCOME (EXPENSE)

         

Interest expense

     (37     (35      (109     (105

Interest income and other, net

     21     36      101     104
  

 

 

   

 

 

    

 

 

   

 

 

 
INCOME BEFORE INCOME TAXES      1,163     1,123      3,498     3,273

Provision for income taxes

     311     207      843     679
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income including noncontrolling interests

     852     916      2,655     2,594

Net income attributable to noncontrolling interests

     (14     (10      (42     (32
  

 

 

   

 

 

    

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 838   $ 906    $ 2,613   $ 2,562
  

 

 

   

 

 

    

 

 

   

 

 

 

NET INCOME PER COMMON SHARE
ATTRIBUTABLE TO COSTCO:

         

Basic

   $ 1.90   $ 2.06    $ 5.91   $ 5.83
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

   $ 1.89   $ 2.05    $ 5.89   $ 5.79
  

 

 

   

 

 

    

 

 

   

 

 

 

Shares used in calculation (000’s):

         

Basic

     442,322     439,859      442,054     439,767

Diluted

     443,855     442,642      443,754     442,565


  
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COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

Draft 5/27/2020 2:59 PM

 

Subject to Reclassification    May 10, 2020     September 1, 2019  
ASSETS     

CURRENT ASSETS

    

Cash and cash equivalents

   $ 10,826   $ 8,384

Short-term investments

     948     1,060

Receivables, net

     1,507     1,535

Merchandise inventories

     11,010     11,395

Other current assets

     963     1,111
  

 

 

   

 

 

 

Total current assets

     25,254     23,485
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT

    

Land

     6,684     6,417

Buildings and improvements

     17,800     17,136

Equipment and fixtures

     8,549     7,801

Construction in progress

     1,073     1,272

Accumulated depreciation and amortization

     (12,579     (11,736
  

 

 

   

 

 

 

Net property and equipment

     21,527     20,890
  

 

 

   

 

 

 
OTHER ASSETS     

Operating lease right-of-use assets

     2,749     —    

Other long-term assets

     2,202     1,025
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 51,732   $ 45,400
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     
CURRENT LIABILITIES     

Accounts payable

   $ 10,813   $ 11,679

Accrued salaries and benefits

     3,246     3,176

Accrued member rewards

     1,331     1,180

Deferred membership fees

     1,832     1,711

Current portion of long-term debt

     1,497     1,699

Other current liabilities

     4,060     3,792
  

 

 

   

 

 

 

Total current liabilities

     22,779     23,237
OTHER LIABILITIES     

Long-term debt, excluding current portion

     7,598     5,124

Long-term operating lease liabilities

     2,535     —    

Other long-term liabilities

     1,617     1,455
  

 

 

   

 

 

 

TOTAL LIABILITIES

     34,529     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; 441,523,000 and 439,625,000 shares issued and outstanding

     4     4

Additional paid-in capital

     6,593     6,417

Accumulated other comprehensive loss

     (1,678     (1,436

Retained earnings

     11,883     10,258
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     16,802     15,243

Noncontrolling interests

     401     341
  

 

 

   

 

 

 

TOTAL EQUITY

     17,203     15,584
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 51,732   $ 45,400
  

 

 

   

 

 

 

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