ISSAQUAH, Wash., March 05, 2020 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2020, ended February 16, 2020.



Net sales for the quarter increased 10.5 percent, to $38.26 billion from $34.63 billion last year. Net sales for the first 24 weeks increased 8.1 percent, to $74.49 billion from $68.94 billion last year.

Comparable sales for the second quarter fiscal 2020 were as follows:

12 Weeks 12 Weeks 24 Weeks 24 Weeks Adjusted* Adjusted* U.S. 9.1% 8.1% 7.0% 6.6% Canada 8.9% 6.8% 5.8% 5.9% Other International 7.9% 7.1% 5.5% 5.8% Total Company 8.9% 7.9% 6.6% 6.5% E-commerce 28.4% 28.0% 17.4% 17.3% *Excluding the impacts from changes in gasoline prices and foreign exchange.

Due to Thanksgiving occurring a week later this year, for the quarter: total and comparable sales were positively impacted by approximately one-half percent; and e-commerce sales were positively impacted by an estimated 11 percentage points.



Reported net income for the quarter was $931 million, or $2.10 per diluted share, compared to $889 million, or $2.01 per diluted share, last year. Net income for the first 24 weeks was $1.77 billion, or $4.00 per diluted share, compared to $1.66 billion, or $3.74 per diluted share, last year.

For the four-week reporting month of February, ended March 1, 2020, the Company reported net sales of $12.20 billion, an increase of 13.8 percent from $10.72 billion last year. For the twenty-six week period ended March 1, 2020, net sales were $80.76 billion, an increase of 8.5 percent from $74.42 billion last year.

Comparable sales for the February and year-to-date periods ended March 1, 2020, were as follows:

4 Weeks 4 Weeks 26 Weeks 26 Weeks Adjusted* Adjusted* U.S. 12.4% 11.6% 7.5% 7.1% Canada 10.2% 10.4% 6.2% 6.3% Other International 12.5% 13.5% 6.1% 6.5% Total Company 12.1% 11.7% 7.2% 7.0% E-commerce 22.6% 22.7% 17.9% 17.9% *Excluding the impacts from changes in gasoline prices and foreign exchange.

February sales benefited from an uptick in consumer demand in the fourth week of the reporting period. We attribute this to concerns over the Coronavirus and estimate the positive impact on total and comparable sales to be approximately three percent.



Costco currently operates 785 warehouses, including 546 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, 11 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, March 5, 2020, and is available via a webcast on www.costco.com (click on Investor Relations and “Play Webcast”).

Certain statements contained in this document and the pre-recorded telephone message 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, global disease threats, 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





COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

12 Weeks Ended 24 Weeks Ended February 16, 2020 February 17, 2019 February 16, 2020 February 17, 2019 REVENUE Net sales $ 38,256 $ 34,628 $ 74,492 $ 68,939 Membership fees 816 768 1,620 1,526 Total revenue $ 39,072 35,396 76,112 70,465 OPERATING EXPENSES Merchandise costs 34,056 30,720 66,289 61,343 Selling, general and administrative 3,743 3,464 7,475 6,939 Preopening expenses 7 9 21 31 Operating income 1,266 1,203 2,327 2,152 OTHER INCOME (EXPENSE) Interest expense (34 ) (34 ) (72 ) (70 ) Interest income and other, net 45 46 80 68 INCOME BEFORE INCOME TAXES 1,277 1,215 2,335 2,150 Provision for income taxes 330 314 532 472 Net income including noncontrolling interests 947 901 1,803 1,678 Net income attributable to noncontrolling interests (16 ) (12 ) (28 ) (22 ) NET INCOME ATTRIBUTABLE TO COSTCO $ 931 $ 889 $ 1,775 $ 1,656 NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: Basic $ 2.10 $ 2.02 $ 4.02 $ 3.77 Diluted $ 2.10 $ 2.01 $ 4.00 $ 3.74 Shares used in calculation (000’s): Basic 442,021 440,284 441,920 439,721 Diluted 443,727 442,337 443,704 442,535





COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

Subject to Reclassifications February 16, 2020 September 1, 2019 ASSETS CURRENT ASSETS Cash and cash equivalents $ 7,786 $ 8,384 Short-term investments 929 1,060 Receivables, net 1,988 1,535 Merchandise inventories 11,850 11,395 Other current assets 1,150 1,111 Total current assets 23,703 23,485 PROPERTY AND EQUIPMENT Land 6,696 6,417 Buildings and improvements 17,853 17,136 Equipment and fixtures 8,406 7,801 Construction in progress 906 1,272 Accumulated depreciation and amortization (12,380 ) (11,736 ) Net property and equipment 21,481 20,890 OTHER ASSETS Operating lease right-of-use assets 2,596 — Other long-term assets 1,002 1,025 TOTAL ASSETS $ 48,782 $ 45,400 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable $ 11,072 $ 11,679 Accrued salaries and benefits 3,415 3,176 Accrued member rewards 1,243 1,180 Deferred membership fees 1,865 1,711 Current portion of long-term debt 500 1,699 Other current liabilities 4,600 3,792 Total current liabilities 22,695 23,237 OTHER LIABILITIES Long-term debt, excluding current portion 5,099 5,124 Long-term operating lease liabilities 2,446 — Other long-term liabilities 1,543 1,455 TOTAL LIABILITIES 31,783 29,816 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; 441,622,000 and 439,625,000 shares issued and outstanding 4 4 Additional paid-in capital 6,506 6,417 Accumulated other comprehensive loss (1,280 ) (1,436 ) Retained earnings 11,384 10,258 Total Costco stockholders’ equity 16,614 15,243 Noncontrolling interests 385 341 TOTAL EQUITY 16,999 15,584 TOTAL LIABILITIES AND EQUITY $ 48,782 $ 45,400





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