COST
$172.18
Costco Wholesale
($1.24)
(.72%)
Earnings Details
4th Quarter August 2017
Thursday, October 5, 2017 4:15:09 PM
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Summary

Costco Wholesale Beats

Costco Wholesale (COST) reported 4th Quarter August 2017 earnings of $2.08 per share on revenue of $42.3 billion. The consensus earnings estimate was $2.02 per share on revenue of $41.7 billion. The Earnings Whisper number was $2.01 per share. Revenue grew 15.7% on a year-over-year basis.

Costco Wholesale Corp and its subsidiaries operate membership warehouses. It offers its members low prices on a limited selection of nationally branded and select private-label products in merchandise categories.

Results
Reported Earnings
$2.08
Earnings Whisper
$2.01
Consensus Estimate
$2.02
Reported Revenue
$42.30 Bil
Revenue Estimate
$41.68 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2017 Operating Results and September Sales Results

Costco Wholesale Corporation ("Costco" or the "Company") (COST) today announced its operating results for the 17-week fourth quarter and the 53-week fiscal year ended September 3, 2017.

Net sales for the 17-week fourth quarter were $41.36 billion, an increase of 15.8 percent from $35.73 billion in the 16-week fourth quarter of fiscal 2016. Net sales for the 53-week fiscal year were $126.17 billion, an increase of 8.7 percent from $116.07 billion in the 52-week fiscal year of 2016.

The Company today also reported net sales of $12.40 billion for the month of September, the five weeks ended October 1, 2017, an increase of 12.1 percent from $11.06 billion during the similar period last year. (The five-week period this year included the last week of the 53-week fiscal year 2017 ended September 3, 2017).

Comparable sales for the 17-week fourth quarter, the 53-week fiscal year, and the 5-week September retail sales month were as follows:

17 Weeks
53 Weeks
Sept. 5 Weeks
U.S.
6.5
%
4.4
%
9.0
%
Canada
4.9
%
4.7
%
9.4
%
Other International
5.6
%
2.1
%
8.2
%
Total Company
6.1
%
4.1
%
8.9
%
E-commerce
21
%
13
%
30
%

Comparable sales for these periods excluding the impacts from changes in gasoline prices and foreign exchange were as follows:

17 Weeks
53 Weeks
Sept. 5 Weeks
U.S.
5.8
%
3.7
%
7.1
%
Canada
4.8
%
3.8
%
1.4
%
Other International
6.0
%
4.5
%
7.2
%
Total Company
5.7
%
3.8
%
6.2
%

Net income for the 17-week fourth quarter was $919 million, or $2.08 per diluted share, compared to $779 million, or $1.77 per diluted share, in the 16-week fourth quarter last year.

Net income for the 53-week fiscal year was $2.68 billion, or $6.08 per diluted share, compared to $2.35 billion, or $5.33 per diluted share, in the 52-week prior year. Net income was positively impacted by an $82 million ($0.19 per diluted share) tax benefit in connection with the third-quarter special cash dividend and other net benefits of approximately $51 million ($0.07 per diluted share after tax) for nonrecurring net legal and other matters.

Costco ended its 2017 fiscal year with 741 warehouses in operation, including 514 in the United States and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 26 in Japan, 13 in Korea, 13 in Taiwan, nine in Australia, two in Spain, one in France and one in Iceland. Costco also operates e-commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2017 fourth quarter and year-end operating results and September sales is scheduled for 2:00 p.m. (PT) today, October 5, 2017, 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, 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 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

COSTCO WHOLESALE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
17 Weeks
16 Weeks
53 Weeks
52 Weeks
Ended
Ended
Ended
Ended
September 3,
August 28,
September 3,
August 28,
2017
2016
2017
2016
REVENUE
Net sales
$
41,357
$
35,728
$
126,172
$
116,073
Membership fees
943
832
2,853
2,646
Total revenue
42,300
36,560
129,025
118,719
OPERATING EXPENSES
Merchandise costs
36,697
31,649
111,882
102,901
Selling, general and administrative
4,123
3,696
12,950
12,068
Preopening expenses
30
24
82
78
Operating income
1,450
1,191
4,111
3,672
OTHER INCOME (EXPENSE)
Interest expense
(53
)
(39
)
(134
)
(133
)
Interest income and other, net
22
29
62
80
INCOME BEFORE INCOME TAXES
1,419
1,181
4,039
3,619
Provision for income taxes
487
396
1,325
1,243
Net income including noncontrolling interests
932
785
2,714
2,376
Net income attributable to noncontrolling interests
(13
)
(6
)
(35
)
(26
)
NET INCOME ATTRIBUTABLE TO COSTCO
$
919
$
779
$
2,679
$
2,350
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic
$
2.10
$
1.78
$
6.11
$
5.36
Diluted
$
2.08
$
1.77
$
6.08
$
5.33
Shares used in calculation: (000’s)
Basic
437,987
437,809
438,437
438,585
Diluted
441,036
440,868
440,937
441,263
Cash dividends declared per common share
$
0.50
$
0.45
$
8.90
$
1.70
COSTCO WHOLESALE CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
September 3,
August 28,
2017
2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
4,546
$
3,379
Short-term investments
1,233
1,350
Receivables, net
1,432
1,252
Merchandise inventories
9,834
8,969
Other current assets
272
268
Total current assets
17,317
15,218
PROPERTY AND EQUIPMENT
Land
5,690
5,395
Buildings and improvements
15,127
13,994
Equipment and fixtures
6,681
6,077
Construction in progress
843
701
28,341
26,167
Less accumulated depreciation and amortization
(10,180
)
(9,124
)
Net property and equipment
18,161
17,043
OTHER ASSETS
869
902
TOTAL ASSETS
$
36,347
$
33,163
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$
9,608
$
7,612
Current portion of long-term debt
86
1,100
Accrued salaries and benefits
2,703
2,629
Accrued member rewards
961
869
Deferred membership fees
1,498
1,362
Other current liabilities
2,639
2,003
Total current liabilities
17,495
15,575
LONG-TERM DEBT, excluding current portion
6,573
4,061
OTHER LIABILITIES
1,200
1,195
Total liabilities
25,268
20,831
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $.01 par value; 100,000,000 shares authorized; no shares issued 0
0
and outstanding
Common stock $.01 par value; 900,000,000 shares authorized; 437,204,000 and
4
2
437,524,000 shares issued and outstanding
Additional paid-in capital
5,800
5,490
Accumulated other comprehensive loss
(1,014
)
(1,099
)
Retained earnings
5,988
7,686
Total Costco stockholders’ equity
10,778
12,079
Noncontrolling interests
301
253
Total equity
11,079
12,332
TOTAL LIABILITIES AND EQUITY
$
36,347
$
33,163

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