COST
$202.99
Costco Wholesale
$.76
.38%
Earnings Details
1st Quarter November 2018
Thursday, December 13, 2018 4:15:00 PM
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Summary

Costco Wholesale Misses

Costco Wholesale (COST) reported 1st Quarter November 2018 earnings of $1.61 per share on revenue of $35.1 billion. The consensus earnings estimate was $1.62 per share on revenue of $34.5 billion. The Earnings Whisper number was $1.62 per share. Revenue grew 10.2% on a year-over-year basis.

Costco Wholesale Corp and its subsidiaries operate membership warehouses. It offers its members low prices on a limited selection of nationally branded and select private-label products in merchandise categories.

Results
Reported Earnings
$1.61
Earnings Whisper
$1.62
Consensus Estimate
$1.62
Reported Revenue
$35.07 Bil
Revenue Estimate
$34.53 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Costco Wholesale Corporation Reports First Quarter Fiscal Year 2019 Operating Results

ISSAQUAH, Wash., Dec. 13, 2018 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2019, ended November 25, 2018.

Net sales for the first quarter were $34.31 billion, an increase of 10.3 percent from $31.12 billion during the first quarter last year.

Comparable sales for the first quarter fiscal 2019 were as follows:

      
  12 Weeks 12 Weeks
Adjusted*
 
 U.S.11.0% 8.3% 
 Canada2.4% 5.5% 
 Other International4.0% 5.8% 
      
 Total Company8.8% 7.5% 
      
 E-commerce32.3% 26.2% 
      
*Excluding the impacts from changes in gasoline prices, foreign exchange, and a previously disclosed accounting change concerning revenue recognition (ASC 606).


Net income for the quarter was $767 million, or $1.73 per diluted share, compared to $640 million, or $1.45 per diluted share, last year. This year’s first quarter benefited from a $59 million ($0.13 per diluted share) tax benefit related to stock-based compensation and a $27 million ($0.06 per diluted share) tax benefit related to implementation of the 2017 Tax Act. In addition, the quarter includes a charge of $43 million ($31 million after-tax, $0.07 per diluted share) for an adjustment to our estimate of breakage on rewards earned prior to Fiscal Year 2019 for the Citi/Visa co-branded credit card program. Last year’s first quarter benefited from a $41 million ($0.09 per diluted share) tax benefit related to stock-based compensation.

Costco currently operates 768 warehouses, including 533 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, one in Iceland, and one in France. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, and Taiwan.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, December 13, 2018, 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,” “may,” “might,” “likely,” “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 remediate material weaknesses in internal control, 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

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (dollars in millions, except per share data)
(unaudited)

 12 Weeks Ended
 November 25, 2018 November 26, 2017
REVENUE   
Net sales$34,311  $31,117 
Membership fees758  692 
Total revenue35,069  31,809 
OPERATING EXPENSES   
Merchandise costs30,623  27,617 
Selling, general and administrative3,475  3,224 
Preopening expenses22  17 
Operating income949  951 
OTHER INCOME (EXPENSE)   
Interest expense(36) (37)
Interest income and other, net22  22 
INCOME BEFORE INCOME TAXES935  936 
Provision for income taxes158  285 
Net income including noncontrolling interests777  651 
Net income attributable to noncontrolling interests(10) (11)
NET INCOME ATTRIBUTABLE TO COSTCO$767  $640 
    
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:   
Basic$1.75  $1.46 
Diluted$1.73  $1.45 
    
Shares used in calculation (000’s):   
Basic439,157  437,965 
Diluted442,749  440,851 
    
    
CASH DIVIDENDS DECLARED PER COMMON SHARE$0.57  $0.50 
        

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (amounts in millions, except par value and share data)
(unaudited)

 
Subject to Reclassifications
 November 25, 2018 September 2, 2018
ASSETS   
CURRENT ASSETS   
Cash and cash equivalents$6,778  $6,055 
Short-term investments1,175  1,204 
Receivables, net1,795  1,669 
Merchandise inventories12,205  11,040 
Other current assets1,001  321 
Total current assets22,954  20,289 
PROPERTY AND EQUIPMENT   
Land6,211  6,193 
Buildings and improvements16,355  16,107 
Equipment and fixtures7,448  7,274 
Construction in progress1,130  1,140 
 31,144  30,714 
Less accumulated depreciation and amortization (11,265) (11,033)
Net property and equipment19,879  19,681 
OTHER ASSETS981  860 
TOTAL ASSETS$43,814  $40,830 
LIABILITIES AND EQUITY   
CURRENT LIABILITIES   
Accounts payable$13,133  $11,237 
Accrued salaries and benefits2,982  2,994 
Accrued member rewards1,077  1,057 
Deferred membership fees1,695  1,624 
Other current liabilities3,586  3,014 
Total current liabilities22,473  19,926 
LONG-TERM DEBT, excluding current portion6,480  6,487 
OTHER LIABILITIES1,382  1,314 
Total liabilities30,335  27,727 
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; 440,546,000 and     
438,189,000 shares issued and outstanding4  4 
Additional paid-in capital6,107  6,107 
Accumulated other comprehensive loss(1,331) (1,199)
Retained earnings8,387  7,887 
Total Costco stockholders’ equity13,167  12,799 
Noncontrolling interests312  304 
Total equity13,479  13,103 
TOTAL LIABILITIES AND EQUITY$43,814  $40,830 

 

Source: Costco Wholesale Corporation