Costco Wholesale Corporation Reports First Quarter Fiscal Year 2012 Operating Results

Marketwired

ISSAQUAH, WA--(Marketwire -12/08/11)- Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST - News) announced today its operating results for the first quarter (twelve weeks) of fiscal 2012, ended November 20, 2011.

Net sales for the quarter increased thirteen percent to $21.18 billion from $18.82 billion during the first quarter of fiscal 2011. Comparable sales for the first quarter of fiscal 2012 were as follows:

 
                                           12 Weeks
                                         -----------

                        U.S.                 10%
                        International        11%

                        Total Company        10%
                                         ===========

Inflation in gasoline prices and strengthening foreign currencies had a positive impact on comparable sales. Excluding these effects, comparable sales for the twelve-week period were as follows:

 
                                           12 Weeks
                                         -----------

                        U.S.                  6%
                        International        10%

                        Total Company         7%
                                         ===========

Net income for the quarter was $320 million, or $.73 per diluted share, compared to $312 million, or $.71 per diluted share, for the first quarter of fiscal 2011. First quarter results were negatively impacted by a $24 million charge relating to the settlement of an income tax audit of the Company's 50% owned Mexico joint venture. The impact on net income attributable to Costco was $12 million, or $.03 per diluted share. Also negatively impacting this year's results was a $17 million charge, or $.04 per diluted share, for contributions to the Yes on 1183 Coalition in support of an initiative reforming alcoholic beverage laws in Washington State. (The initiative was approved by a 59% to 41% margin.) These contributions were not tax deductible under U.S. tax laws.

Costco currently operates 596 warehouses, including 433 in the United States and Puerto Rico, 82 in Canada, 32 in Mexico, 22 in the United Kingdom, nine in Japan, eight in Taiwan, seven in Korea and three in Australia. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada. The Company plans to open two additional warehouses in Japan prior to the end of calendar year 2011.

A conference call to discuss these fiscal 2012 first quarter results is scheduled for 8:00 a.m. (PT) today, December 8, 2011, 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, conditions affecting the acquisition, development, ownership or use of real estate, 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.

 


                        COSTCO WHOLESALE CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (dollars in millions, except per share data)
                                 (unaudited)

                                                       12 Weeks Ended
                                                 --------------------------
                                                 November 20,  November 21,
                                                     2011          2010
                                                 ------------  ------------
REVENUE
  Net sales                                         $  21,181     $  18,823
  Membership fees                                         447           416
                                                 ------------  ------------
    Total revenue                                      21,628        19,239
OPERATING EXPENSES
  Merchandise costs                                    18,931        16,757
  Selling, general and administrative                   2,145         1,941
  Preopening expenses                                      10            12
  Provision for impaired assets and closing
   costs, net                                              (1)            4
                                                 ------------  ------------
    Operating income                                      543           525
OTHER INCOME (EXPENSE)
  Interest expense                                        (27)          (26)
  Interest income and other, net                           37             5
                                                 ------------  ------------
INCOME BEFORE INCOME TAXES                                553           504
  Provision for income taxes                              225           172
                                                 ------------  ------------
Net income including noncontrolling interests             328           332
Net income attributable to noncontrolling
 interests                                                 (8)          (20)
                                                 ------------  ------------
NET INCOME ATTRIBUTABLE TO COSTCO                   $     320     $     312
                                                 ============  ============

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO
 COSTCO:
  Basic                                             $    0.74     $    0.72
                                                 ============  ============
  Diluted                                           $    0.73     $    0.71
                                                 ============  ============

Shares used in calculation (000's)
  Basic                                               434,222       434,099
  Diluted                                             440,615       441,360

Dividends per share                                 $   0.240     $   0.205



                  COSTCO WHOLESALE CORPORATION
             CONDENSED CONSOLIDATED BALANCE SHEETS
                     (dollars in millions)
                          (unaudited)
Subject to Reclassifications

                                                  November 20,   August 28,
                                                      2011          2011
                                                  ------------  ------------
                      ASSETS
Cash and cash equivalents                            $   4,319     $   4,009
Short-term investments                                   1,596         1,604
Receivables, net                                           982           965
Merchandise inventories                                  7,618         6,638
Deferred income taxes and other current assets             478           490
                                                  ------------  ------------
  Total current assets                                  14,993        13,706
Property and equipment, net                             12,381        12,432
Other assets                                               630           623
                                                  ------------  ------------
TOTAL ASSETS                                         $  28,004     $  26,761
                                                  ============  ============

               LIABILITIES AND EQUITY

Short-term borrowings and current portion of long-
 term debt                                           $     934     $     900
Accounts payable                                         7,576         6,544
Other current liabilities                                4,801         4,606
                                                  ------------  ------------
  Total current liabilities                             13,311        12,050
Long-term debt, excluding current portion                1,330         1,253
Deferred income taxes and other liabilities                916           885
                                                  ------------  ------------
  Total liabilities                                     15,557        14,188
                                                  ------------  ------------

Total Costco stockholders' equity                       11,909        12,002
Noncontrolling interests                                   538           571
                                                  ------------  ------------
  Total equity                                          12,447        12,573
                                                  ------------  ------------
TOTAL LIABILITIES AND EQUITY                         $  28,004     $  26,761
                                                  ============  ============


Contact:
CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203
Bob Nelson
425/313-8255
Jeff Elliott
425/313-8264

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