Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal Year 2013

Marketwired

ISSAQUAH, WA--(Marketwire - Mar 12, 2013) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the second quarter (twelve weeks) and first half (24 weeks) of fiscal 2013, ended February 17, 2013. Net sales for the quarter increased eight percent, to $24.34 billion, from $22.51 billion last year. Net sales for the first half increased nine percent, to $47.55 billion, from $43.69 billion last year.

Comparable sales were as follows:

         
    12 Weeks   24 Weeks
U.S.   5%   6%
International   6%   7%
         
Total   5%   6%
         

Inflation in gasoline prices and stronger foreign currencies had positive impacts on comparable sales for both reporting periods. Excluding these effects, comparable sales were as follows:

         
    12 Weeks   24 Weeks
U.S.   5%   6%
International   4%   5%
         
Total   5%   5%
         

Net income for the quarter was $547 million, or $1.24 per diluted share, compared to $394 million, or $.90 per diluted share, last year. Net income was positively impacted by a $62 million ($0.14 per diluted share) tax benefit in connection with the portion of the special cash dividend paid by the Company in December 2012 to the Company 401(k) plan participants. Net income for the first half was $963 million, or $2.19 per diluted share, compared to $714 million, or $1.62 per diluted share, last year.

Costco currently operates 622 warehouses, including 448 in the United States and Puerto Rico, 85 in Canada, 32 in Mexico, 23 in the United Kingdom, 13 in Japan, nine in Taiwan, nine in Korea and three in Australia. The Company plans to open up to an additional fourteen new warehouses prior to the end of its fiscal year on September 1, 2013. Costco also operates electronic commerce web sites, at www.costco.com (U.S.), www.costco.ca (Canada), and www.costco.co.uk (United Kingdom).

A conference call to discuss these second quarter operating results is scheduled for 8:00 a.m. (PT) today, March 12, 2013, 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     24 Weeks Ended  
    February 17, 2013     February 12, 2012     February 17, 2013     February 12, 2012  
REVENUE                                
  Net sales   $ 24,343     $ 22,508     $ 47,547     $ 43,689  
  Membership fees     528       459       1,039       906  
    Total revenue     24,871       22,967       48,586       44,595  
OPERATING EXPENSES                                
  Merchandise costs     21,766       20,139       42,492       39,070  
  Selling, general and administrative     2,361       2,178       4,693       4,322  
  Preopening expenses     6       6       24       16  
    Operating income     738       644       1,377       1,187  
OTHER INCOME (EXPENSE)                                
  Interest expense     (25 )     (27 )     (38 )     (54 )
  Interest income and other, net     26       10       46       47  
INCOME BEFORE INCOME TAXES     739       627       1,385       1,180  
  Provision for income taxes     185       215       410       440  
Net income including noncontrolling interests     554       412       975       740  
Net income attributable to noncontrolling interests     (7 )     (18 )     (12 )     (26 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 547     $ 394     $ 963     $ 714  
                                 
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:                                
  Basic   $ 1.26     $ 0.91     $ 2.22     $ 1.64  
  Diluted   $ 1.24     $ 0.90     $ 2.19     $ 1.62  
                                 
Shares used in calculation (000's)                                
  Basic     435,975       434,535       434,698       434,374  
  Diluted     439,812       439,468       439,222       440,036  
                                 
                                 
                                 
Cash dividends declared per common share   $ 7.275     $ 0.240     $ 7.550     $ 0.480  
                                 
                                 
 
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
 
Subject to Reclassifications
 
         
    February 17,
2013
  September 2,
2012
ASSETS            
             
Cash and cash equivalents   $ 4,413   $ 3,528
Short-term investments     1,238     1,326
Receivables, net     1,300     1,026
Merchandise inventories     7,582     7,096
Deferred income taxes and other current assets     577     550
  Total current assets     15,110     13,526
Property and equipment, net     13,386     12,961
Other assets     593     653
TOTAL ASSETS   $ 29,089   $ 27,140
             
LIABILITIES AND EQUITY            
             
Short-term borrowings   $ 64   $ 0
Accounts payable     7,441     7,303
Accrued salaries and benefits     2,077     1,832
Other current liabilities     2,264     2,024
Deferred membership fees     1,199     1,101
  Total current liabilities     13,045     12,260
Long-term debt, excluding current portion     4,806     1,381
Deferred income taxes and other liabilities     955     981
  Total liabilities     18,806     14,622
             
Total Costco stockholders' equity     10,112     12,361
Noncontrolling interests     171     157
  Total equity     10,283     12,518
TOTAL LIABILITIES AND EQUITY   $ 29,089   $ 27,140
             
Contact:
CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203

Bob Nelson
425/313-8255

Jeff Elliott
425/313-8264
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