Exhibit 99.1
COSTCO WHOLESALE CORPORATION REPORTS THIRD QUARTER AND YEAR-TO-DATE
OPERATING RESULTS FOR FISCAL 2014
ISSAQUAH, Wash., May 29, 2014 – Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) announced today its operating results for the third quarter (twelve weeks) and the first thirty-six-weeks of fiscal 2014, ended May 11, 2014. Net sales for the quarter increased seven percent, to $25.23 billion, from $23.55 billion last year. Net sales for the first thirty-six weeks increased six percent, to $75.46 billion, from $71.10 billion last year.
Comparable sales were as follows:
| 12 Weeks | 36 Weeks | |||||||
| U.S. |
5 | % | 4 | % | ||||
| International |
3 | % | 1 | % | ||||
| Total |
4 | % | 3 | % | ||||
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Comparable sales for these periods, excluding negative impacts from gasoline price deflation and foreign exchange, were as follows:
| 12 Weeks | 36 Weeks | |||||||
| U.S. |
6 | % | 5 | % | ||||
| International |
8 | % | 7 | % | ||||
| Total |
6 | % | 5 | % | ||||
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Net income for the quarter was $473 million, or $1.07 per diluted share, compared to $459 million, or $1.04 per diluted share, last year. Net income for the first thirty-six weeks was $1.36 billion, or $3.07 per diluted share, compared to $1.42 billion, or $3.23 per diluted share, last year. Net income for the thirty-six week period last year was positively impacted by a second quarter $62 million ($.14 per diluted share) tax benefit in connection with the portion of the special cash dividend paid in December 2012 to the Company 401(k) plan participants.
Costco currently operates 655 warehouses, including 464 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 19 in Japan, 10 in Taiwan, 10 in Korea, six in Australia, and one in Spain. The Company plans to open up to an additional eight new warehouses prior to the end of its fiscal year on August 31, 2014. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.
A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 29, 2014, 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, amounts expected to be spent on expansion plans, 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.
CONTACTS: Costco Wholesale Corporation
Richard Galanti, 425/313-8203, Bob Nelson, 425/313-8255, Jeff Elliott, 425/313-8264
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
| 12 Weeks Ended | 36 Weeks Ended | |||||||||||||||
| May 11, 2014 |
May 12, 2013 |
May 11, 2014 |
May 12, 2013 |
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| REVENUE |
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| Net sales |
$ | 25,233 | $ | 23,552 | $ | 75,457 | $ | 71,099 | ||||||||
| Membership fees |
561 | 531 | 1,660 | 1,570 | ||||||||||||
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| Total revenue |
25,794 | 24,083 | 77,117 | 72,669 | ||||||||||||
| OPERATING EXPENSES |
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| Merchandise costs |
22,554 | 21,038 | 67,421 | 63,530 | ||||||||||||
| Selling, general and administrative |
2,487 | 2,313 | 7,519 | 7,006 | ||||||||||||
| Preopening expenses |
16 | 10 | 48 | 34 | ||||||||||||
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| Operating income |
737 | 722 | 2,129 | 2,099 | ||||||||||||
| OTHER INCOME (EXPENSE) |
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| Interest expense |
(25 | ) | (25 | ) | (78 | ) | (63 | ) | ||||||||
| Interest income and other, net |
12 | 15 | 60 | 61 | ||||||||||||
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| INCOME BEFORE INCOME TAXES |
724 | 712 | 2,111 | 2,097 | ||||||||||||
| Provision for income taxes |
245 | 248 | 728 | 658 | ||||||||||||
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| Net income including noncontrolling interests |
479 | 464 | 1,383 | 1,439 | ||||||||||||
| Net income attributable to noncontrolling interests |
(6 | ) | (5 | ) | (22 | ) | (17 | ) | ||||||||
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| NET INCOME ATTRIBUTABLE TO COSTCO |
$ | 473 | $ | 459 | $ | 1,361 | $ | 1,422 | ||||||||
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| NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: |
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| Basic |
$ | 1.08 | $ | 1.05 | $ | 3.10 | $ | 3.27 | ||||||||
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| Diluted |
$ | 1.07 | $ | 1.04 | $ | 3.07 | $ | 3.23 | ||||||||
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| Shares used in calculation (000’s) |
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| Basic |
439,446 | 436,488 | 439,058 | 435,293 | ||||||||||||
| Diluted |
442,720 | 440,780 | 442,651 | 439,738 | ||||||||||||
| Cash dividends declared per common share |
$ | 0.355 | $ | 0.31 | $ | 0.975 | $ | 7.86 | ||||||||
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
| May 11, 2014 |
September 1, 2013 |
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| ASSETS |
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| Cash and cash equivalents |
$ | 5,736 | $ | 4,644 | ||||
| Short-term investments |
1,539 | 1,480 | ||||||
| Receivables, net |
1,115 | 1,201 | ||||||
| Merchandise inventories |
8,483 | 7,894 | ||||||
| Deferred income taxes and other current assets |
660 | 621 | ||||||
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| Total current assets |
17,533 | 15,840 | ||||||
| Property and equipment, net |
14,583 | 13,881 | ||||||
| Other assets |
585 | 562 | ||||||
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| TOTAL ASSETS |
$ | 32,701 | $ | 30,283 | ||||
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| LIABILITIES AND EQUITY |
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| Accounts payable |
$ | 8,361 | $ | 7,872 | ||||
| Accrued salaries and benefits |
2,056 | 2,037 | ||||||
| Other current liabilities |
2,973 | 2,181 | ||||||
| Deferred membership fees |
1,297 | 1,167 | ||||||
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| Total current liabilities |
14,687 | 13,257 | ||||||
| Long-term debt, excluding current portion |
4,985 | 4,998 | ||||||
| Deferred income taxes and other liabilities |
1,008 | 1,016 | ||||||
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| Total liabilities |
20,680 | 19,271 | ||||||
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| Total Costco stockholders’ equity |
11,819 | 10,833 | ||||||
| Noncontrolling interests |
202 | 179 | ||||||
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| Total equity |
12,021 | 11,012 | ||||||
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| TOTAL LIABILITIES AND EQUITY |
$ | 32,701 | $ | 30,283 | ||||
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