Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2020 Operating Results

ISSAQUAH, Wash., Sept. 24, 2020 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended August 30, 2020.

Net sales for the quarter increased 12.5 percent, to $52.28 billion from $46.45 billion last year. Net sales for the fiscal year increased 9.3 percent, to $163.22 billion from $149.35 billion last year.

Comparable sales for the fourth quarter and the fiscal year were as follows:

			16 Weeks		16 Weeks		52 Weeks		52 Weeks
					Adjusted*				Adjusted*
	U.S.		11.0%		13.6%		8.1%		9.2%
	Canada		9.1%		12.6%		5.0%		7.4%
	Other International		16.1%		18.8%		8.9%		11.2%
	Total Company		11.4%		14.1%		7.7%		9.2%
	E-commerce		90.6%		91.3%		49.5%		50.1%

*Excluding the impacts from changes in gasoline prices and foreign exchange.

Net income for the fourth quarter was $1.389 billion, or $3.13 per diluted share, compared to $1.097 billion, or $2.47 per diluted share last year. This year’s fourth quarter was negatively impacted by incremental expense related to COVID-19 premium wages and sanitation costs of $281 million pretax ($0.47 per diluted share) and a $36 million pretax charge ($0.06 per diluted share) related to the prepayment of $1.5 billion of debt. These items were partially offset by an $84 million pretax benefit ($0.15 per diluted share) for the partial reversal of a reserve of $123 million pretax ($0.22 cents per diluted share), related to a product tax assessment taken in the fourth quarter of last year.

Net income for the fiscal year was $4.00 billion, or $9.02 per diluted share, compared to $3.66 billion, or $8.26 per diluted share in the prior year.

Costco currently operates 795 warehouses, including 552 in the United States and Puerto Rico, 101 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, September 24, 2020, 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,” “likely,” “may,” “might,” “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 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 maintain effective internal control over financial reporting, COVID-19 related factors and challenges, including among others, the duration of the pandemic, the unknown long-term economic impacts, reduced customer shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforce due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, 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
		Josh Dahmen, 425/313-8254

COSTCO WHOLESALE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (dollars in millions, except per share data) (unaudited)
	16 Weeks Ended										52 Weeks Ended
	August 30, 2020					September 1, 2019					August 30, 2020					September 1, 2019
REVENUE
Net sales	$	52,277				$	46,448				$	163,220				$	149,351
Membership fees	1,106					1,050					3,541					3,352
Total revenue	53,383					47,498					166,761					152,703
OPERATING EXPENSES
Merchandise costs	46,401					41,310					144,939					132,886
Selling, general and administrative	5,027					4,684					16,332					14,994
Preopening expenses	26					41					55					86
Operating income	1,929					1,463					5,435					4,737
OTHER INCOME (EXPENSE)
Interest expense	(51		)			(45		)			(160		)			(150		)
Interest income and other, net	(9		)			74					92					178
INCOME BEFORE INCOME TAXES	1,869					1,492					5,367					4,765
Provision for income taxes	465					382					1,308					1,061
Net income including noncontrolling interests	1,404					1,110					4,059					3,704
Net income attributable to noncontrolling interests	(15		)			(13		)			(57		)			(45		)
NET INCOME ATTRIBUTABLE TO COSTCO	$	1,389				$	1,097				$	4,002				$	3,659
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic	$	3.14				$	2.49				$	9.05				$	8.32
Diluted	$	3.13				$	2.47				$	9.02				$	8.26
Shares used in calculation (000’s):
Basic	442,843					439,727					442,297					439,755
Diluted	444,231					443,400					443,901					442,923

 

COSTCO WHOLESALE CORPORATION CONSOLIDATED BALANCE SHEETS (amounts in millions, except par value and share data) (unaudited)
Subject to Reclassification
			August 30, 2020				September 1, 2019
ASSETS
	CURRENT ASSETS
	Cash and cash equivalents		$	12,277			$	8,384
	Short-term investments		1,028				1,060
	Receivables, net		1,550				1,535
	Merchandise inventories		12,242				11,395
	Other current assets		1,023				1,111
	Total current assets		28,120				23,485
	OTHER ASSETS
	Property and equipment, net		21,807				20,890
	Operating lease right-of-use assets		2,788				—
	Other long-term assets		2,841				1,025
	TOTAL ASSETS		$	55,556			$	45,400
LIABILITIES AND EQUITY
	CURRENT LIABILITIES
	Accounts payable		$	14,172			$	11,679
	Accrued salaries and benefits		3,605				3,176
	Accrued member rewards		1,393				1,180
	Deferred membership fees		1,851				1,711
	Current portion of long-term debt		95				1,699
	Other current liabilities		3,728				3,792
	Total current liabilities		24,844				23,237
	OTHER LIABILITIES
	Long-term debt, excluding current portion		7,514				5,124
	Long-term operating lease liabilities		2,558				—
	Other long-term liabilities		1,935				1,455
	TOTAL LIABILITIES		36,851				29,816
	COMMITMENTS AND CONTINGENCIES
	EQUITY
	Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding		—				—
	Common stock $0.01 par value; 900,000,000 shares authorized; 441,255,000 and 439,625,000 shares issued and outstanding		4				4
	Additional paid-in capital		6,698				6,417
	Accumulated other comprehensive loss		(1,297		)		(1,436		)
	Retained earnings		12,879				10,258
	Total Costco stockholders’ equity		18,284				15,243
	Noncontrolling interests		421				341
	Total equity		18,705				15,584
	TOTAL LIABILITIES AND EQUITY		$	55,556			$	45,400