Costco Wholesale Corporation Reports Third Quarter and Year-To-Date Operating Results for Fiscal 2020

ISSAQUAH, Wash., May 28, 2020 (GLOBE NEWSWIRE) -- 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-commerce64.5% 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 (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 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

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

 12 Weeks Ended 36 Weeks Ended
 May 10, 2020 May 12, 2019 May 10, 2020 May 12, 2019
Net sales$36,451  $33,964  $110,943  $102,903 
Membership fees815  776  2,435  2,302 
Total revenue37,266  34,740  113,378  105,205 
Merchandise costs32,249  30,233  98,538  91,576 
Selling, general and administrative3,830  3,371  11,305  10,310 
Preopening expenses8  14  29  45 
Operating income1,179  1,122  3,506  3,274 
Interest expense(37) (35) (109) (105)
Interest income and other, net21  36  101  104 
INCOME BEFORE INCOME TAXES1,163  1,123  3,498  3,273 
Provision for income taxes311  207  843  679 
Net income including noncontrolling interests852  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 
Basic$1.90  $2.06  $5.91  $5.83 
Diluted$1.89  $2.05  $5.89  $5.79 
Shares used in calculation (000’s):       
Basic442,322  439,859  442,054  439,767 
Diluted443,855  442,642  443,754  442,565 

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

Subject to Reclassification
May 10, 2020 September 1, 2019
 Cash and cash equivalents$10,826  $8,384 
 Short-term investments948  1,060 
 Receivables, net1,507  1,535 
 Merchandise inventories11,010  11,395 
 Other current assets963  1,111 
 Total current assets25,254  23,485 
 Land6,684  6,417 
 Buildings and improvements17,800  17,136 
 Equipment and fixtures8,549  7,801 
 Construction in progress1,073  1,272 
 Accumulated depreciation and amortization(12,579) (11,736)
 Net property and equipment21,527  20,890 
 Operating lease right-of-use assets2,749   
 Other long-term assets2,202  1,025 
 TOTAL ASSETS$51,732  $45,400 
 Accounts payable$10,813  $11,679 
 Accrued salaries and benefits3,246  3,176 
 Accrued member rewards1,331  1,180 
 Deferred membership fees1,832  1,711 
 Current portion of long-term debt1,497  1,699 
 Other current liabilities4,060  3,792 
 Total current liabilities22,779  23,237 
 Long-term debt, excluding current portion7,598  5,124 
 Long-term operating lease liabilities2,535   
 Other long-term liabilities1,617  1,455 
 TOTAL LIABILITIES34,529  29,816 
 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 outstanding4  4 
 Additional paid-in capital6,593  6,417 
 Accumulated other comprehensive loss(1,678) (1,436)
 Retained earnings11,883  10,258 
 Total Costco stockholders’ equity16,802  15,243 
 Noncontrolling interests401  341 
 TOTAL EQUITY17,203  15,584 
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