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Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2017 Operating Results and September Sales Results

ISSAQUAH, Wash., Oct. 05, 2017 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq:COST) today announced its operating results for the 17-week fourth quarter and the 53-week fiscal year ended September 3, 2017.

Net sales for the 17-week fourth quarter were $41.36 billion, an increase of 15.8 percent from $35.73 billion in the 16-week fourth quarter of fiscal 2016. Net sales for the 53-week fiscal year were $126.17 billion, an increase of 8.7 percent from $116.07 billion in the 52-week fiscal year of 2016.

The Company today also reported net sales of $12.40 billion for the month of September, the five weeks ended October 1, 2017, an increase of 12.1 percent from $11.06 billion during the similar period last year. (The five-week period this year included the last week of the 53-week fiscal year 2017 ended September 3, 2017).

Comparable sales for the 17-week fourth quarter, the 53-week fiscal year, and the 5-week September retail sales month were as follows:

17 Weeks 53 Weeks Sept. 5 Weeks

U.S.

6.5

%

4.4

%

9.0

%
Canada 4.9% 4.7% 9.4%
Other International 5.6% 2.1% 8.2%
Total Company 6.1% 4.1% 8.9%
E-commerce 21% 13% 30%


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

17 Weeks 53 Weeks Sept. 5 Weeks

U.S.

5.8

%

3.7

%

7.1

%
Canada 4.8% 3.8% 1.4%
Other International 6.0% 4.5% 7.2%
Total Company 5.7% 3.8% 6.2%


Net income for the 17-week fourth quarter was $919 million, or $2.08 per diluted share, compared to $779 million, or $1.77 per diluted share, in the 16-week fourth quarter last year.

Net income for the 53-week fiscal year was $2.68 billion, or $6.08 per diluted share, compared to $2.35 billion, or $5.33 per diluted share, in the 52-week prior year. Net income was positively impacted by an $82 million ($0.19 per diluted share) tax benefit in connection with the third-quarter special cash dividend and other net benefits of approximately $51 million ($0.07 per diluted share after tax) for nonrecurring net legal and other matters.

Costco ended its 2017 fiscal year with 741 warehouses in operation, including 514 in the United States and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 26 in Japan, 13 in Korea, 13 in Taiwan, nine in Australia, two in Spain, one in France and one in Iceland. Costco also operates e-commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2017 fourth quarter and year-end operating results and September sales is scheduled for 2:00 p.m. (PT) today, October 5, 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 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
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)

17 Weeks
Ended
16 Weeks
Ended
53 Weeks
Ended
52 Weeks
Ended
September 3,
2017
August 28,
2016
September 3,
2017
August 28,
2016
REVENUE
Net sales $41,357 $35,728 $126,172 $116,073
Membership fees 943 832 2,853 2,646
Total revenue 42,300 36,560 129,025 118,719
OPERATING EXPENSES
Merchandise costs 36,697 31,649 111,882 102,901
Selling, general and administrative 4,123 3,696 12,950 12,068
Preopening expenses 30 24 82 78
Operating income 1,450 1,191 4,111 3,672
OTHER INCOME (EXPENSE)
Interest expense (53) (39) (134) (133)
Interest income and other, net 22 29 62 80
INCOME BEFORE INCOME TAXES 1,419 1,181 4,039 3,619
Provision for income taxes 487 396 1,325 1,243
Net income including noncontrolling interests 932 785 2,714 2,376
Net income attributable to noncontrolling interests (13) (6) (35) (26)
NET INCOME ATTRIBUTABLE TO COSTCO $919 $779 $2,679 $2,350
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic $2.10 $1.78 $6.11 $5.36
Diluted $2.08 $1.77 $6.08 $5.33
Shares used in calculation: (000’s)
Basic 437,987 437,809 438,437 438,585
Diluted 441,036 440,868 440,937 441,263
Cash dividends declared per common share $0.50 $0.45 $8.90 $1.70


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

Subject to Reclassifications
September 3,
2017
August 28,
2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents$4,546 $3,379
Short-term investments1,233 1,350
Receivables, net1,432 1,252
Merchandise inventories9,834 8,969
Other current assets272 268
Total current assets17,317 15,218
PROPERTY AND EQUIPMENT
Land5,690 5,395
Buildings and improvements15,127 13,994
Equipment and fixtures6,681 6,077
Construction in progress843 701
28,341 26,167
Less accumulated depreciation and amortization(10,180) (9,124)
Net property and equipment18,161 17,043
OTHER ASSETS869 902
TOTAL ASSETS$36,347 $33,163
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable$9,608 $7,612
Current portion of long-term debt86 1,100
Accrued salaries and benefits2,703 2,629
Accrued member rewards961 869
Deferred membership fees1,498 1,362
Other current liabilities2,639 2,003
Total current liabilities17,495 15,575
LONG-TERM DEBT, excluding current portion6,573 4,061
OTHER LIABILITIES1,200 1,195
Total liabilities25,268 20,831
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $.01 par value; 100,000,000 shares authorized; no shares issued
and outstanding
0 0
Common stock $.01 par value; 900,000,000 shares authorized; 437,204,000 and
437,524,000 shares issued and outstanding
4 2
Additional paid-in capital5,800 5,490
Accumulated other comprehensive loss(1,014) (1,099)
Retained earnings5,988 7,686
Total Costco stockholders’ equity10,778 12,079
Noncontrolling interests301 253
Total equity11,079 12,332
TOTAL LIABILITIES AND EQUITY$36,347 $33,163

Source:Costco Wholesale Corporation