UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 30, 2019
COSTCO WHOLESALE CORPORATION
(Exact name of registrant as specified in its charter)
Washington | 0-20355 | 91-1223280 | ||
(State or other jurisdiction of incorporation) |
(Commission File No.) |
(I.R.S. Employer Identification No.) |
999 Lake Drive
Issaquah, WA 98027
(Address of principal executive offices and zip code)
Registrants telephone number, including area code: 425-313-8100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Stock, par value $.01 per share Preferred Stock, par value $.01 per share |
COST COST |
NASDAQ NASDAQ |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. | Results of Operations and Financial Condition |
On May 30, 2019, the Company issued a press release containing its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2019, ended May 12, 2019. A copy of the press release is included in Item 9.01.
Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits. The following exhibit is included in this report:
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, on May 30, 2019.
COSTCO WHOLESALE CORPORATION | ||
By: | /s/ Richard A. Galanti | |
Richard A. Galanti | ||
Executive Vice President and Chief Financial Officer |
Exhibit 99.1
Press Release |
COSTCO WHOLESALE CORPORATION REPORTS THIRD QUARTER AND YEAR-TO-DATE
OPERATING RESULTS FOR FISCAL 2019
ISSAQUAH, Wash., May 30, 2019 - Costco Wholesale Corporation (Costco or the Company) (Nasdaq: COST) today announced its operating results for the third quarter (twelve weeks) and the first thirty-six weeks of fiscal 2019, ended May 12, 2019.
Net sales for the quarter increased 7.4 percent, to $33.96 billion, from $31.62 billion last year. Net sales for the first thirty-six weeks increased 8.3 percent, to $102.90 billion, from $95.02 billion last year.
Comparable sales for the third quarter and year-to-date periods ended May 12, 2019, were as follows:
12 Weeks | 12 Weeks | 36 Weeks | 36 Weeks | |||||||||||||
Adjusted* | Adjusted* | |||||||||||||||
U.S. |
7.0 | % | 5.5 | % | 8.5 | % | 6.9 | % | ||||||||
Canada |
1.3 | % | 5.1 | % | 1.1 | % | 5.5 | % | ||||||||
Other International |
1.7 | % | 6.9 | % | 2.1 | % | 5.8 | % | ||||||||
Total Company |
5.5 | % | 5.6 | % | 6.6 | % | 6.5 | % | ||||||||
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E-commerce |
22.0 | % | 19.5 | % | 24.7 | % | 23.9 | % | ||||||||
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* | Excluding the impacts from changes in gasoline prices, foreign exchange, and a previously disclosed accounting change concerning revenue recognition (ASC 606). |
Net income for the quarter was $906 million, or $2.05 per diluted share, compared to $750 million, or $1.70 per diluted share, last year. Net income for the thirty-six weeks was $2.56 billion, or $5.79 per diluted share, compared to $2.09 billion, or $4.74 per diluted share, last year. This years third quarter benefitted from a non-recurring tax item of $73 million, or 16 cents per diluted share.
Costco currently operates 773 warehouses, including 536 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, and one each in Iceland and France. Costco also operates e-commerce 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, May 30, 2019, 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. In some cases forward-looking statements can be identified because they contain words such as anticipate, believe, continue, could, estimate, expect, intend, may, might, likely, 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
Press Release |
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 remediate material weaknesses in internal control, and other risks identified from time to time in the Companys public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date that they are made, and the Company does not undertake to update them, 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
Press Release |
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||
May 12, 2019 | May 13, 2018 | May 12, 2019 | May 13, 2018 | |||||||||||||
REVENUE |
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Net Sales |
$ | 33,964 | $ | 31,624 | $ | 102,903 | $ | 95,020 | ||||||||
Membership fees |
776 | 737 | 2,302 | 2,145 | ||||||||||||
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Total revenue |
34,740 | 32,361 | 105,205 | 97,165 | ||||||||||||
OPERATING EXPENSES |
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Merchandise costs |
30,233 | 28,131 | 91,576 | 84,481 | ||||||||||||
Selling, general and administrative |
3,371 | 3,155 | 10,310 | 9,613 | ||||||||||||
Preopening expenses |
14 | 8 | 45 | 37 | ||||||||||||
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Operating income |
1,122 | 1,067 | 3,274 | 3,034 | ||||||||||||
OTHER INCOME (EXPENSE) |
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Interest expense |
(35 | ) | (37 | ) | (105 | ) | (111 | ) | ||||||||
Interest income and other, net |
36 | 41 | 104 | 70 | ||||||||||||
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INCOME BEFORE INCOME TAXES |
1,123 | 1,071 | 3,273 | 2,993 | ||||||||||||
Provision for income taxes |
207 | 309 | 679 | 867 | ||||||||||||
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Net income including noncontrolling interests |
916 | 762 | 2,594 | 2,126 | ||||||||||||
Net income attributable to noncontrolling interests |
(10 | ) | (12 | ) | (32 | ) | (35 | ) | ||||||||
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NET INCOME ATTRIBUTABLE TO COSTCO |
$ | 906 | $ | 750 | $ | 2,562 | $ | 2,091 | ||||||||
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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: |
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Basic |
$ | 2.06 | $ | 1.71 | $ | 5.83 | $ | 4.77 | ||||||||
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Diluted |
$ | 2.05 | $ | 1.70 | $ | 5.79 | $ | 4.74 | ||||||||
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Shares used in calculation (000s): |
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Basic |
439,859 | 438,740 | 439,767 | 438,576 | ||||||||||||
Diluted |
442,642 | 441,715 | 442,565 | 441,383 |
Press Release |
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
May 12, 2019 | September 2, 2018 | |||||||
ASSETS | ||||||||
CURRENT ASSETS |
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Cash and cash equivalents |
$ | 7,013 | $ | 6,055 | ||||
Short-term investments |
1,154 | 1,204 | ||||||
Receivables, net |
1,704 | 1,669 | ||||||
Merchandise inventories |
11,304 | 11,040 | ||||||
Other current assets |
1,110 | 321 | ||||||
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Total current assets |
22,285 | 20,289 | ||||||
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PROPERTY AND EQUIPMENT |
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Land |
6,310 | 6,193 | ||||||
Buildings and improvements |
16,644 | 16,107 | ||||||
Equipment and fixtures |
7,858 | 7,274 | ||||||
Construction in progress |
1,412 | 1,140 | ||||||
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32,224 | 30,714 | |||||||
Less accumulated depreciation and amortization |
(11,749 | ) | (11,033 | ) | ||||
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Net property and equipment |
20,475 | 19,681 | ||||||
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OTHER ASSETS |
992 | 860 | ||||||
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TOTAL ASSETS |
$ | 43,752 | $ | 40,830 | ||||
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LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES |
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Accounts payable |
$ | 11,331 | $ | 11,237 | ||||
Accrued salaries and benefits |
2,888 | 2,994 | ||||||
Accrued member rewards |
1,160 | 1,057 | ||||||
Deferred membership fees |
1,761 | 1,624 | ||||||
Current portion of long-term debt |
1,699 | 90 | ||||||
Other current liabilities |
3,993 | 2,924 | ||||||
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Total current liabilities |
22,832 | 19,926 | ||||||
LONG-TERM DEBT, excluding current portion |
4,799 | 6,487 | ||||||
OTHER LIABILITIES |
1,301 | 1,314 | ||||||
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Total liabilities |
28,932 | 27,727 | ||||||
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COMMITMENTS AND CONTINGENCIES |
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EQUITY |
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Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding |
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Common stock $0.01 par value; 900,000,000 shares authorized; 439,811,000 and 438,189,000 shares issued and outstanding |
4 | 4 | ||||||
Additional paid-in capital |
6,307 | 6,107 | ||||||
Accumulated other comprehensive loss |
(1,321 | ) | (1,199 | ) | ||||
Retained earnings |
9,496 | 7,887 | ||||||
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Total Costco stockholders equity |
14,486 | 12,799 | ||||||
Noncontrolling interests |
334 | 304 | ||||||
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Total equity |
14,820 | 13,103 | ||||||
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TOTAL LIABILITIES AND EQUITY |
$ | 43,752 | $ | 40,830 | ||||
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