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

ISSAQUAH, Wash., Oct. 05, 2017 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: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 Ended			16 Weeks Ended			53 Weeks Ended			52 Weeks Ended
		September 3, 2017			August 28, 2016			September 3, 2017			August 28, 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, 2017			August 28, 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 and outstanding	0			0
Common stock $.01 par value; 900,000,000 shares authorized; 437,204,000 and 437,524,000 shares issued and outstanding	4			2
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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Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2017 Operating Results and September Sales Results

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