COST
$150.44
Costco Wholesale
($.55)
(.36%)
Earnings Details
3rd Quarter May 2017
Thursday, May 25, 2017 4:15:23 PM
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Summary

Costco Wholesale Beats

Costco Wholesale (COST) reported 3rd Quarter May 2017 earnings of $1.40 per share on revenue of $28.9 billion. The consensus earnings estimate was $1.31 per share on revenue of $28.6 billion. The Earnings Whisper number was $1.33 per share. Revenue grew 7.8% 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
$1.40
Earnings Whisper
$1.33
Consensus Estimate
$1.31
Reported Revenue
$28.86 Bil
Revenue Estimate
$28.62 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2017

Costco Wholesale Corporation ("Costco" or the "Company") (COST) today announced its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2017, ended May 7, 2017.

Net sales for the quarter increased eight percent, to $28.22 billion from $26.15 billion last year. Net sales for the first thirty-six weeks increased six percent, to $84.82 billion from $80.34 billion last year.

Comparable sales for the twelve-week and thirty-six-week periods were as follows:

12 Weeks
36 Weeks
U.S.
6
%
3
%
Canada
2
%
5
%
Other International
4
%
0
%
Total Company
5
%
3
%

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

12 Weeks
36 Weeks
U.S.
5
%
3
%
Canada
3
%
3
%
Other International
6
%
4
%
Total Company
5
%
3
%

Net income for the quarter was $700 million, or $1.59 per diluted share, compared to $545 million, or $1.24 per diluted share, last year. Net income was positively impacted by an $82 million ($0.19 per diluted share) tax benefit in connection with the $7.00 per share special cash dividend announced on April 25, 2017, to the extent to be received by the Company’s 401(k) plan participants. Net income for the thirty six weeks was $1.76 billion, or $3.99 per diluted share, compared to $1.57 billion, or $3.56 per diluted share, last year.

Costco currently operates 732 warehouses, including 510 in the United States and Puerto Rico, 95 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain and one in Iceland. 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 fiscal 2017 third quarter operating results is scheduled for 2:00 p.m. (PT) on May 25, 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 we do not undertake to update these statements, except as required by law.

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended
36 Weeks Ended
May 7,
May 8,
May 7,
May 8,
2017
2016
2017
2016
REVENUE
Net sales
$
28,216
$
26,151
$
84,815
$
80,345
Membership fees
644
618
1,910
1,814
Total revenue
28,860
26,769
86,725
82,159
OPERATING EXPENSES
Merchandise costs
24,970
23,162
75,185
71,252
Selling, general and administrative
2,907
2,731
8,827
8,372
Preopening expenses
15
18
52
54
Operating income
968
858
2,661
2,481
OTHER INCOME (EXPENSE)
Interest expense
(21
)
(30
)
(81
)
(94
)
Interest income and other, net
18
7
40
51
INCOME BEFORE INCOME TAXES
965
835
2,620
2,438
Provision for income taxes
259
286
838
847
Net income including noncontrolling interests
706
549
1,782
1,591
Net income attributable to noncontrolling interests
(6
)
(4
)
(22
)
(20
)
NET INCOME ATTRIBUTABLE TO COSTCO
$
700
$
545
$
1,760
$
1,571
NET INCOME PER COMMON SHARE
ATTRIBUTABLE TO COSTCO:
Basic
$
1.59
$
1.24
$
4.01
$
3.58
Diluted
$
1.59
$
1.24
$
3.99
$
3.56
Shares used in calculation (000’s):
Basic
438,817
438,815
438,650
438,930
Diluted
441,056
441,066
440,745
441,321
Cash dividends declared per common share
$
7.50
$
0.45
$
8.40
$
1.25
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
May 7,
August 28,
2017
2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
4,538
$
3,379
Short-term investments
1,187
1,350
Receivables, net
1,462
1,252
Merchandise inventories
9,736
8,969
Other current assets
333
268
Total current assets
17,256
15,218
PROPERTY AND EQUIPMENT
Land
5,505
5,395
Buildings and improvements
14,509
13,994
Equipment and fixtures
6,507
6,077
Construction in progress
803
701
27,324
26,167
Less accumulated depreciation and amortization
(9,789
)
(9,124
)
Net property and equipment
17,535
17,043
OTHER ASSETS
840
902
TOTAL ASSETS
$
35,631
$
33,163
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$
9,425
$
7,612
Current portion of long-term debt
1,158
1,100
Accrued salaries and benefits
2,514
2,629
Accrued member rewards
923
869
Deferred membership fees
1,479
1,362
Other current liabilities
5,895
2,003
Total current liabilities
21,394
15,575
LONG-TERM DEBT, excluding current portion
2,821
4,061
OTHER LIABILITIES
1,231
1,195
Total liabilities
25,446
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; 438,679,000 and 437,524,000 shares issued and outstanding 2
2
Additional paid-in capital
5,709
5,490
Accumulated other comprehensive loss
(1,321
)
(1,099
)
Retained earnings
5,508
7,686
Total Costco stockholders’ equity
9,898
12,079
Noncontrolling interests
287
253
Total equity
10,185
12,332
TOTAL LIABILITIES AND EQUITY
$
35,631
$
33,163
CONTACTS: Costco Wholesale Corporation
Richard Galanti, 425/313-8203, Bob Nelson, 425/313-8255, David Sherwood, 425/313-8239

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