Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal Year 2016 and February Sales Results
Marketwired
ISSAQUAH, WA--(Marketwired - Mar 2, 2016) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) today announced its operating results for the second quarter (twelve weeks) and first half (24 weeks) of fiscal 2016, ended February 14, 2016.
Net sales for the quarter increased three percent, to $27.57 billion from $26.87 billion last year. Net sales for the first half increased two percent, to $54.19 billion from $53.16 billion last year.
Comparable sales for the twelve-week and twenty-four-week periods were as follows:
12 Weeks
24 Weeks
U.S.
3%
3%
Canada
-7%
-8%
Other International
-3%
-4%
Total Company
1%
0%
Comparable sales for these periods, excluding the negative impacts from gasoline price deflation and foreign exchange were as follows:
12 Weeks
24 Weeks
U.S.
4%
5%
Canada
10%
10%
Other International
6%
6%
Total Company
5%
6%
Net income for the quarter was $546 million, or $1.24 per diluted share, compared to $598 million, or $1.35 per diluted share, last year. Net income for the first half was $1,026 million, or $2.32 per diluted share, compared to $1,094 million, or $2.47 per diluted share, last year.
Net income for the quarter last year was positively impacted by a $57 million ($0.13 per diluted share) tax benefit in connection with a special cash dividend received by the Company 401(k) plan participants, and was negatively impacted by a $14 million ($0.03 per diluted share) tax charge relating to an ongoing income tax matter.
For the four-week reporting month of February, ended February 28, 2016, the Company reported net sales of $8.28 billion, an increase of one percent from $8.18 billion during the similar four-week period last year. For the twenty-six week period ended February 28, 2016, net sales were $58.25 billion, an increase of two percent from $57.19 billion during the similar period last year.
Comparable sales for the four-week and twenty-six-week periods ended February 28, 2016 were as follows:
4 Weeks
26 Weeks
U.S.
2%
2%
Canada
-2%
-8%
Other International
-8%
-5%
Total Company
0%
0%
Comparable sales for these periods, excluding the negative impacts from gasoline price deflation and foreign exchange, were as follows:
4 Weeks
26 Weeks
U.S.
4%
5%
Canada
10%
10%
Other International
0%
6%
Total Company
4%
5%
Costco currently operates 698 warehouses, including 488 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 24 in Japan, 12 in Korea, 11 in Taiwan, eight in Australia and two in Spain. 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 2016 second quarter operating results and February sales results is scheduled for 8:00 a.m. (PT) on March 3, 2016, 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
24 Weeks Ended
February 14, 2016
February 15, 2015
February 14, 2016
February 15, 2015
REVENUE
Net sales
$
27,567
$
26,872
$
54,194
$
53,156
Membership fees
603
582
1,196
1,164
Total revenue
28,170
27,454
55,390
54,320
OPERATING EXPENSES
Merchandise costs
24,469
23,897
48,090
47,282
Selling, general and administrative
2,835
2,671
5,641
5,367
Preopening expenses
10
9
36
24
Operating income
856
877
1,623
1,647
OTHER INCOME (EXPENSE)
Interest expense
(31
)
(27
)
(64
)
(53
)
Interest income and other, net
16
20
44
55
INCOME BEFORE INCOME TAXES
841
870
1,603
1,649
Provision for income taxes
286
263
561
537
Net income including noncontrolling interests
555
607
1,042
1,112
Net income attributable to noncontrolling interests
(9
)
(9
)
(16
)
(18
)
NET INCOME ATTRIBUTABLE TO COSTCO
$
546
$
598
$
1,026
$
1,094
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic
$
1.24
$
1.36
$
2.34
$
2.49
Diluted
$
1.24
$
1.35
$
2.32
$
2.47
Shares used in calculation: (000's)
Basic
439,648
440,384
438,990
439,567
Diluted
441,559
442,896
441,457
442,522
Cash dividends declared per common share
$
0.40
$
5.355
$
0.80
$
5.710
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
February 14, 2016
August 30, 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
3,633
$
4,801
Short-term investments
1,222
1,618
Receivables, net
1,453
1,224
Merchandise inventories
8,908
8,908
Other current assets
313
228
Total current assets
15,529
16,779
PROPERTY AND EQUIPMENT
Land
5,140
4,961
Buildings and improvements
13,212
12,618
Equipment and fixtures
5,623
5,274
Construction in progress
727
811
24,702
23,664
Less accumulated depreciation and amortization
(8,637
)
(8,263
)
Net property and equipment
16,065
15,401
OTHER ASSETS
794
837
TOTAL ASSETS
$
32,388
$
33,017
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$
8,222
$
9,011
Current portion of long-term debt
89
1,283
Accrued salaries and benefits
2,619
2,468
Accrued member rewards
846
813
Deferred membership fees
1,377
1,269
Other current liabilities
2,280
1,695
Total current liabilities
15,433
16,539
LONG-TERM DEBT, excluding current portion
4,886
4,852
OTHER LIABILITIES
835
783
Total liabilities
21,154
22,174
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding
0
0
Common stock $.005 par value; 900,000,000 shares authorized; 439,256,000 and 437,952,000 shares issued and outstanding
