Costco Wholesale Corporation Reports Third Quarter and Year-To-Date Operating Results for Fiscal 2020

ISSAQUAH, Wash., May 28, 2020 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (COST) today announced its operating results for the third quarter (12 weeks) and the first 36 weeks of fiscal 2020, ended May 10, 2020.

Net sales for the quarter increased 7.3 percent, to $36.45 billion from $33.96 billion last year. Net sales for the first 36 weeks increased 7.8 percent, to $110.94 billion from $102.90 billion last year.

Comparable sales for the third quarter fiscal 2020 were as follows:

		12 Weeks		12 Weeks		36 Weeks		36 Weeks
				Adjusted*				Adjusted*
	U.S.	5.9%		8.0%		6.6%		7.1%
	Canada	-2.5%		3.0%		3.1%		5.0%
	Other International	6.2%		12.2%		5.7%		7.9%
	Total Company	4.8%		7.8%		6.0%		6.9%
	E-commerce	64.5%		66.1%		31.8%		32.3%

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

Reported net income for the third quarter was $838 million, or $1.89 per share, which was negatively impacted by $283 million pretax, or 47 cents per diluted share, from incremental wage and sanitation costs related to COVID-19. Last year's reported third quarter net income was $906 million, or $2.05 per diluted share, which included the benefit of a non-recurring tax item of $73 million, or 16 cents per share.

Net income for the first 36 weeks was $2.61 billion, or $5.89 per diluted share, compared to $2.56 billion, or $5.79 per diluted share, last year.

Costco currently operates 787 warehouses, including 547 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, two 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, May 28, 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data) (unaudited)

	12 Weeks Ended								36 Weeks Ended
	May 10, 2020				May 12, 2019				May 10, 2020				May 12, 2019
REVENUE
Net sales	$	36,451			$	33,964			$	110,943			$	102,903
Membership fees	815				776				2,435				2,302
Total revenue	37,266				34,740				113,378				105,205
OPERATING EXPENSES
Merchandise costs	32,249				30,233				98,538				91,576
Selling, general and administrative	3,830				3,371				11,305				10,310
Preopening expenses	8				14				29				45
Operating income	1,179				1,122				3,506				3,274
OTHER INCOME (EXPENSE)
Interest expense	(37		)		(35		)		(109		)		(105		)
Interest income and other, net	21				36				101				104
INCOME BEFORE INCOME TAXES	1,163				1,123				3,498				3,273
Provision for income taxes	311				207				843				679
Net income including noncontrolling interests	852				916				2,655				2,594
Net income attributable to noncontrolling interests	(14		)		(10		)		(42		)		(32		)
NET INCOME ATTRIBUTABLE TO COSTCO	$	838			$	906			$	2,613			$	2,562
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic	$	1.90			$	2.06			$	5.91			$	5.83
Diluted	$	1.89			$	2.05			$	5.89			$	5.79
Shares used in calculation (000’s):
Basic	442,322				439,859				442,054				439,767
Diluted	443,855				442,642				443,754				442,565

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data) (unaudited)

Subject to Reclassification					May 10, 2020				September 1, 2019
	ASSETS
	CURRENT ASSETS
	Cash and cash equivalents				$	10,826			$	8,384
	Short-term investments				948				1,060
	Receivables, net				1,507				1,535
	Merchandise inventories				11,010				11,395
	Other current assets				963				1,111
	Total current assets				25,254				23,485
	PROPERTY AND EQUIPMENT
	Land				6,684				6,417
	Buildings and improvements				17,800				17,136
	Equipment and fixtures				8,549				7,801
	Construction in progress				1,073				1,272
	Accumulated depreciation and amortization				(12,579		)		(11,736		)
	Net property and equipment				21,527				20,890
	OTHER ASSETS
	Operating lease right-of-use assets				2,749				—
	Other long-term assets				2,202				1,025
	TOTAL ASSETS				$	51,732			$	45,400
	LIABILITIES AND EQUITY
	CURRENT LIABILITIES
	Accounts payable				$	10,813			$	11,679
	Accrued salaries and benefits				3,246				3,176
	Accrued member rewards				1,331				1,180
	Deferred membership fees				1,832				1,711
	Current portion of long-term debt				1,497				1,699
	Other current liabilities				4,060				3,792
	Total current liabilities				22,779				23,237
	OTHER LIABILITIES
	Long-term debt, excluding current portion				7,598				5,124
	Long-term operating lease liabilities				2,535				—
	Other long-term liabilities				1,617				1,455
	TOTAL LIABILITIES				34,529				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; 441,523,000 and 439,625,000 shares issued and outstanding				4				4
	Additional paid-in capital				6,593				6,417
	Accumulated other comprehensive loss				(1,678		)		(1,436		)
	Retained earnings				11,883				10,258
	Total Costco stockholders’ equity				16,802				15,243
	Noncontrolling interests				401				341
	TOTAL EQUITY				17,203				15,584
	TOTAL LIABILITIES AND EQUITY				$	51,732			$	45,400