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Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2017

ISSAQUAH, Wash., May 25, 2017 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq:COST) today announced its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2017, ended May 7, 2017.

Net sales for the quarter increased eight percent, to $28.22 billion from $26.15 billion last year. Net sales for the first thirty-six weeks increased six percent, to $84.82 billion from $80.34 billion last year.

Comparable sales for the twelve-week and thirty-six-week periods were as follows:

12 Weeks 36 Weeks

U.S.

6

%

3

%
Canada 2% 5%
Other International 4% 0%
Total Company 5% 3%

Comparable sales for these periods excluding the impacts from changes in gasoline prices and foreign exchange were as follows:

12 Weeks 36 Weeks

U.S.

5

%

3

%
Canada 3% 3%
Other International 6% 4%
Total Company 5% 3%

Net income for the quarter was $700 million, or $1.59 per diluted share, compared to $545 million, or $1.24 per diluted share, last year. Net income was positively impacted by an $82 million ($0.19 per diluted share) tax benefit in connection with the $7.00 per share special cash dividend announced on April 25, 2017, to the extent to be received by the Company’s 401(k) plan participants. Net income for the thirty six weeks was $1.76 billion, or $3.99 per diluted share, compared to $1.57 billion, or $3.56 per diluted share, last year.

Costco currently operates 732 warehouses, including 510 in the United States and Puerto Rico, 95 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain and one in Iceland. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2017 third quarter operating results is scheduled for 2:00 p.m. (PT) on May 25, 2017, 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. 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 (including health care costs), energy and certain commodities, geopolitical conditions, 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 we do not undertake to update these statements, except as required by law.

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended 36 Weeks Ended
May 7,
2017
May 8,
2016
May 7,
2017
May 8,
2016
REVENUE
Net sales $28,216 $26,151 $84,815 $80,345
Membership fees 644 618 1,910 1,814
Total revenue 28,860 26,769 86,725 82,159
OPERATING EXPENSES
Merchandise costs 24,970 23,162 75,185 71,252
Selling, general and administrative 2,907 2,731 8,827 8,372
Preopening expenses 15 18 52 54
Operating income 968 858 2,661 2,481
OTHER INCOME (EXPENSE)
Interest expense (21) (30) (81) (94)
Interest income and other, net 18 7 40 51
INCOME BEFORE INCOME TAXES 965 835 2,620 2,438
Provision for income taxes 259 286 838 847
Net income including noncontrolling interests 706 549 1,782 1,591
Net income attributable to noncontrolling interests (6) (4) (22) (20)
NET INCOME ATTRIBUTABLE TO COSTCO $700 $545 $1,760 $1,571
NET INCOME PER COMMON SHARE
ATTRIBUTABLE TO COSTCO:
Basic $1.59 $1.24 $4.01 $3.58
Diluted $1.59 $1.24 $3.99 $3.56
Shares used in calculation (000’s):
Basic 438,817 438,815 438,650 438,930
Diluted 441,056 441,066 440,745 441,321
Cash dividends declared per common share $7.50 $0.45 $8.40 $1.25


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
May 7,
2017
August 28,
2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents$4,538 $3,379
Short-term investments1,187 1,350
Receivables, net1,462 1,252
Merchandise inventories9,736 8,969
Other current assets333 268
Total current assets17,256 15,218
PROPERTY AND EQUIPMENT
Land5,505 5,395
Buildings and improvements14,509 13,994
Equipment and fixtures6,507 6,077
Construction in progress803 701
27,324 26,167
Less accumulated depreciation and amortization(9,789) (9,124)
Net property and equipment17,535 17,043
OTHER ASSETS840 902
TOTAL ASSETS$35,631 $33,163
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable$9,425 $7,612
Current portion of long-term debt1,158 1,100
Accrued salaries and benefits2,514 2,629
Accrued member rewards923 869
Deferred membership fees1,479 1,362
Other current liabilities5,895 2,003
Total current liabilities21,394 15,575
LONG-TERM DEBT, excluding current portion2,821 4,061
OTHER LIABILITIES1,231 1,195
Total liabilities25,446 20,831
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding0 0
Common stock $.005 par value; 900,000,000 shares authorized; 438,679,000 and 437,524,000 shares issued and outstanding 2 2
Additional paid-in capital5,709 5,490
Accumulated other comprehensive loss(1,321) (1,099)
Retained earnings5,508 7,686
Total Costco stockholders’ equity9,898 12,079
Noncontrolling interests287 253
Total equity10,185 12,332
TOTAL LIABILITIES AND EQUITY$35,631 $33,163

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

Source:Costco Wholesale Corporation