Exhibit 99.1
COSTCO WHOLESALE CORPORATION REPORTS FIRST QUARTER
FISCAL YEAR 2017 OPERATING RESULTS
ISSAQUAH, Wash., December 7, 2016 – Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2017, ended November 20, 2016.
Net sales for the first quarter were $27.47 billion, an increase of three percent, from $26.63 billion during the first quarter last year.
Comparable sales for the first quarter of fiscal 2017 were as follows:
| U.S. |
1 | % | ||
| Canada |
4 | % | ||
| Other International |
0 | % | ||
| Total Company |
1 | % | ||
|
|
|
Comparable sales for the quarter excluding the impacts from changes in gasoline prices and foreign exchange were as follows:
| U.S. |
1 | % | ||
| Canada |
5 | % | ||
| Other International |
3 | % | ||
| Total Company |
2 | % | ||
|
|
|
Net income for the quarter was $545 million, or $1.24 per diluted share, compared to $480 million, or $1.09 per diluted share, last year. This year’s first quarter benefited from a non-recurring $51 million ($.07 per diluted share after tax) legal settlement.
Costco currently operates 723 warehouses, including 506 in the United States and Puerto Rico, 94 in Canada, 36 in Mexico, 28 in the United Kingdom, 25 in Japan, 12 in Korea, 12 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 results is scheduled for 2:00 p.m. (PT) today, December 7, 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
1
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.
| CONTACTS: |
Costco Wholesale Corporation | |
| Bob Nelson, 425/313-8255 | ||
| Jeff Elliott, 425/313-8264 | ||
| David Sherwood, 425/313-8239 |
2
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
| November 20, 2016 |
November 22, 2015 |
|||||||
| REVENUE |
||||||||
| Net sales |
$ | 27,469 | $ | 26,627 | ||||
| Membership fees |
630 | 593 | ||||||
|
|
|
|
|
|||||
| Total revenue |
28,099 | 27,220 | ||||||
| OPERATING EXPENSES |
||||||||
| Merchandise costs |
24,288 | 23,621 | ||||||
| Selling, general and administrative |
2,940 | 2,806 | ||||||
| Preopening expenses |
22 | 26 | ||||||
|
|
|
|
|
|||||
| Operating income |
849 | 767 | ||||||
| OTHER INCOME (EXPENSE) |
||||||||
| Interest expense |
(29 | ) | (33 | ) | ||||
| Interest income and other, net |
26 | 28 | ||||||
|
|
|
|
|
|||||
| INCOME BEFORE INCOME TAXES |
846 | 762 | ||||||
| Provision for income taxes |
291 | 275 | ||||||
|
|
|
|
|
|||||
| Net income including noncontrolling interests |
555 | 487 | ||||||
| Net income attributable to noncontrolling interests |
(10 | ) | (7 | ) | ||||
|
|
|
|
|
|||||
| NET INCOME ATTRIBUTABLE TO COSTCO |
$ | 545 | $ | 480 | ||||
|
|
|
|
|
|||||
| NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: |
||||||||
| Basic |
$ | 1.24 | $ | 1.10 | ||||
|
|
|
|
|
|||||
| Diluted |
$ | 1.24 | $ | 1.09 | ||||
|
|
|
|
|
|||||
| Shares used in calculation: (000’s) |
||||||||
| Basic |
438,007 | 438,342 | ||||||
| Diluted |
440,525 | 441,386 | ||||||
| Cash dividends declared per common share |
$ | 0.45 | $ | 0.40 | ||||
3
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
| November 20, 2016 |
August 28, 2016 |
|||||||
| ASSETS |
||||||||
| CURRENT ASSETS |
||||||||
| Cash and cash equivalents |
$ | 4,805 | $ | 3,379 | ||||
| Short-term investments |
1,311 | 1,350 | ||||||
| Receivables, net |
1,498 | 1,252 | ||||||
| Merchandise inventories |
10,721 | 8,969 | ||||||
| Other current assets |
235 | 268 | ||||||
|
|
|
|
|
|||||
| Total current assets |
18,570 | 15,218 | ||||||
|
|
|
|
|
|||||
| PROPERTY AND EQUIPMENT |
||||||||
| Land |
5,389 | 5,395 | ||||||
| Buildings and improvements |
14,060 | 13,994 | ||||||
| Equipment and fixtures |
6,173 | 6,077 | ||||||
| Construction in progress |
816 | 701 | ||||||
|
|
|
|
|
|||||
| 26,438 | 26,167 | |||||||
| Less accumulated depreciation and amortization |
(9,282 | ) | (9,124 | ) | ||||
|
|
|
|
|
|||||
| Net property and equipment |
17,156 | 17,043 | ||||||
|
|
|
|
|
|||||
| OTHER ASSETS |
806 | 902 | ||||||
|
|
|
|
|
|||||
| TOTAL ASSETS |
$ | 36,532 | $ | 33,163 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND EQUITY |
||||||||
| CURRENT LIABILITIES |
||||||||
| Accounts payable |
$ | 11,003 | $ | 7,612 | ||||
| Current portion long-term debt |
1,159 | 1,100 | ||||||
| Accrued salaries and benefits |
2,534 | 2,629 | ||||||
| Accrued member rewards |
862 | 869 | ||||||
| Deferred membership fees |
1,414 | 1,362 | ||||||
| Other current liabilities |
2,189 | 2,003 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
19,161 | 15,575 | ||||||
| LONG-TERM DEBT, excluding current portion |
3,933 | 4,061 | ||||||
| OTHER LIABILITIES |
1,207 | 1,195 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
24,301 | 20,831 | ||||||
|
|
|
|
|
|||||
| 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; 439,343,000 and 437,524,000 shares issued and outstanding |
2 | 2 | ||||||
| Additional paid-in capital |
5,528 | 5,490 | ||||||
| Accumulated other comprehensive loss |
(1,439 | ) | (1,099 | ) | ||||
| Retained earnings |
7,882 | 7,686 | ||||||
|
|
|
|
|
|||||
| Total Costco stockholders’ equity |
11,973 | 12,079 | ||||||
| Noncontrolling interests |
258 | 253 | ||||||
|
|
|
|
|
|||||
| Total equity |
12,231 | 12,332 | ||||||
|
|
|
|
|
|||||
| TOTAL LIABILITIES AND EQUITY |
$ | 36,532 | $ | 33,163 | ||||
|
|
|
|
|
|||||
4