cost-20240530

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 30, 2024

COSTCO WHOLESALE CORPORATION

(Exact name of registrant as specified in its charter)

Washington

0-20355

91-1223280

(State or other jurisdiction
of incorporation)

(Commission
File No.)

(I.R.S. Employer
Identification No.)

999 Lake Drive

Issaquah, WA 98027

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: 425-313-8100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.005 per share

COST

NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On May 30, 2024, the Company issued a press release containing its operating results for the third quarter (twelve weeks) and the first thirty-six weeks of fiscal 2024, ended May 12, 2024. A copy of the press release is attached as Exhibit 99.1. In addition, a copy of the Company's earnings release supplement for the third quarter of fiscal 2024 is attached as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

99.1. Press release dated May 30, 2024.

99.2. Third quarter fiscal 2024 supplemental information .

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	COSTCO WHOLESALE CORPORATION

Dated: May 30, 2024	By:	/s/ Gary Millerchip
		Gary Millerchip
		Executive Vice President and Chief Financial Officer

Exhibit 99.1

Press Release

COSTCO WHOLESALE CORPORATION REPORTS THIRD QUARTER AND YEAR-TO-DATE OPERATING RESULTS FOR FISCAL 2024

ISSAQUAH, Wash., May 30, 2024 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (twelve weeks) and the first 36 weeks of fiscal 2024, ended May 12, 2024.

Net sales for the quarter increased 9.1 percent, to $57.39 billion, from $52.60 billion last year. Net sales for the first 36 weeks increased 7.0 percent, to $171.44 billion, from $160.28 billion last year. Net sales were positively impacted by approximately 0.5 to 1.0 percent for the quarter from the shift of the fiscal calendar, as a result of the fifty-third week last year.

The following comparable sales data reflect comparable locations year-over-year and comparable retail weeks.

Comparable sales for the third quarter and first 36 weeks of fiscal 2024 were as follows:


	12 Weeks	12 Weeks	36 Weeks	36 Weeks
		Adjusted*		Adjusted*
U.S.	6.2%	6.0%	4.1%	4.5%
Canada	7.7%	7.4%	7.7%	8.2%
Other International	7.7%	8.5%	9.1%	7.9%
Total Company	6.6%	6.5%	5.3%	5.4%
E-commerce	20.7%	20.7%	14.9%	14.7%

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

Net income for the quarter was $1.68 billion, $3.78 per diluted share. Last year's third quarter net income was $1.30 billion, $2.93 per diluted share, which included a non-recurring charge to merchandise costs of $298 million pretax,
$0.50 per diluted share, primarily for the discontinuation of our charter shipping activities. Net income for the first 36 weeks was $5.01 billion, $11.27 per diluted share, compared to $4.13 billion, $9.30 per diluted share, last year.

Costco currently operates 878 warehouses, including 605 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 33 in Japan, 29 in the United Kingdom, 18 in Korea, 15 in Australia, 14 in Taiwan, seven in China, four in Spain, two in France, and one each in Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, May 30, 2024, and is available via a webcast on investor.costco.com (click on "Events & Presentations”).

Press Release

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, inflation or deflation, 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 and wages), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, 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. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP.

CONTACTS: Costco Wholesale Corporation

David Sherwood, 425/313-8239

Josh Dahmen, 425/313-8254

Andrew Yoon, 425/313-6305

COST-Earn

Press Release

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)


	12 Weeks Ended				36 Weeks Ended
	May 12, 2024		May 7, 2023		May 12, 2024		May 7, 2023
REVENUE
Net sales	$	57,392	$	52,604	$	171,440	$	160,280
Membership fees	1,123		1,044		3,316		3,071
Total revenue	58,515		53,648		174,756		163,351
OPERATING EXPENSES
Merchandise costs	51,173		47,175		152,770		143,367
Selling, general and administrative	5,145		4,794		15,743		14,651
Operating income	2,197		1,679		6,243		5,333
OTHER INCOME (EXPENSE)
Interest expense	(41)		(36)		(120)		(104)
Interest income and other, net	128		128		504		295
INCOME BEFORE INCOME TAXES	2,284		1,771		6,627		5,524
Provision for income taxes	603		469		1,614		1,392


NET INCOME	$	1,681	$	1,302	$	5,013	$	4,132
NET INCOME PER COMMON SHARE:
Basic	$	3.79	$	2.94	$	11.29	$	9.31
Diluted	$	3.78	$	2.93	$	11.27	$	9.30
Shares used in calculation (000's):
Basic	443,892		443,814		443,870		443,843
Diluted	444,828		444,360		444,662		444,455

Press Release

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in millions, except par value and share data)

(unaudited)

Subject to Reclassification


	May 12, 2024		September 3, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	10,404	$	13,700
Short-term investments	1,095		1,534
Receivables, net	2,583		2,285
Merchandise inventories	17,430		16,651
Other current assets	1,776		1,709
Total current assets	33,288		35,879
OTHER ASSETS
Property and equipment, net	28,062		26,684
Operating lease right-of-use assets	2,643		2,713
Other long-term assets	3,918		3,718
TOTAL ASSETS	$	67,911	$	68,994
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	18,844	$	17,483
Accrued salaries and benefits	4,365		4,278
Accrued member rewards	2,339		2,150
Deferred membership fees	2,553		2,337
Current portion of long-term debt	1,077		1,081
Other current liabilities	6,183		6,254
Total current liabilities	35,361		33,583
OTHER LIABILITIES
Long-term debt, excluding current portion	5,834		5,377
Long-term operating lease liabilities	2,386		2,426
Other long-term liabilities	2,559		2,550
TOTAL LIABILITIES	46,140		43,936
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock $0.005 par value; 900,000,000 shares authorized; 443,374,000 and 442,793,000 shares issued and outstanding	2		2
Additional paid-in capital	7,702		7,340
Accumulated other comprehensive loss	(1,922)		(1,805)
Retained earnings	15,989		19,521


TOTAL EQUITY	21,771		25,058
TOTAL LIABILITIES AND EQUITY	$	67,911	$	68,994

Press Release

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in millions)

(unaudited)

Subject to Reclassification


	36 Weeks Ended
	May 12, 2024		May 7, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	5,013	$	4,132
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,531		1,389
Non-cash lease expense	220		300
Stock-based compensation	686		643
Impairment of assets and other non-cash operating activities, net	(35)		441
Changes in working capital	966		438



Net cash provided by operating activities	8,381		7,343
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of short-term investments	(1,007)		(947)
Maturities and sales of short-term investments	1,441		594
Additions to property and equipment	(3,133)		(2,767)
Other investing activities, net	(7)		(27)
Net cash used in investing activities	(2,706)		(3,147)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings	(637)		(698)
Proceeds from short-term borrowings	628		667
Repayments of long-term debt	—		(75)
Proceeds from issuance of long-term debt	498		—
Tax withholdings on stock-based awards	(313)		(302)
Repurchases of common stock	(484)		(446)
Cash dividend payments	(8,527)		(799)
Financing lease payments	(112)		(204)
Other financing activities, net	(1)		(93)
Net cash used in financing activities	(8,948)		(1,950)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(23)		44
Net change in cash and cash equivalents	(3,296)		2,290
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR	13,700		10,203
CASH AND CASH EQUIVALENTS END OF YEAR	$	10,404	$	12,493

3rd Quarter FY 2024 Supplemental Information 1 Exhibit 99.2

$57.4B Net Sales +9.1% Growth +6.6% Comparable Sales +6.5% Adjusted Comparable Sales1 +6.1% Comparable Traffic +0.5% Comparable Ticket +20.7% E-Comm Comparable Sales +20.7% Adjusted E-Comm Comparable Sales2 Q3 Highlights - Sales 1 - Comparable Sales excluding impacts from gas inflation/deflation and FX 2 - E-commerce comparable Sales excluding impacts from FX Comp Sales US Canada Other International Total Company Sales +6.2% +7.7% +7.7% +6.6% Ticket +0.7% +0.6% +0.3% +0.5% Traffic +5.5% +7.1% +7.4% +6.1% 2

Q3 Highlights - Financial Performance Reported Ex Gas Reported Ex Gas Core 0bps +2bps Ops +14bps +12bps Other Bus -6bps -5bps Central +1bps 0bps 2% Reward -1bps -1bps Equity Comp 0bps 0bps LIFO +2bps +2bps Preopening 0bps 0bps *Other +57bps +56bps Other 0bps 0bps Total +52bps +54bps Total +15bps +12bps Core on Core Sales: +10bps + = Favorable/lower, - = Unfavorable/higher Gross Margin 10.84% +52 bps vs. Q3 FY’23 +54 bps ex. gas impact SG&A 8.96% +15 bps vs. Q3 FY’23 +12 bps ex. gas impact Diluted EPS $3.78 +29.0% Growth* Net Income $1.68B +29.1% Growth* *- “Other” Items for the Quarter: - Last year's results included a non-recurring charge to merchandise costs of $298M pretax, $0.50 per diluted share, primarily for the discontinuation of our charter shipping activities. - Excluding this item net income and diluted EPS growth was 10.3% and 10.2%, respectively. 3

+7.6% Membership Income Growth +8.0% Membership Income Growth ex-FX 90.5% Worldwide Membership Renewal Rate 93.0% US/CN Renewal Rate 74.5MM Paid Memberships +7.8% Growth 133.9MM Total Cardholders +7.4% Growth 34.5MM Executive Memberships 73.1% Penetration of Sales to Executive Members Q3 Highlights - Membership 4

+20.7% E-Comm Comparable Sales 1 - E-commerce comparable Sales excluding impacts from FX +20.7% Adjusted E-Comm Comparable Sales1 Top Sales Categories: - Appliances - Gold / Silver Bullions - Gift Cards / e-Tickets Digital Metrics: - New Mobile Application Downloads: +32% - Site Traffic: +16% - Average Order Value: +8% - Costco Logistics Deliveries up 28% Digital Enhancements: - Uber Grocery expansion in US and Canada - Warehouse Inventory Online / Buy Online Pickup in Warehouse pilot items Q3 Highlights - Digital 5

Q4 FY’23 End Q1 Q2 Q3 Rest of FY (Estimated) FY’24 End (Estimated) US 591 8 3 2 10 614 Canada 107 1 - - - 108 Other International 163 - 1 - 4 168 Total 861 9 4 2 14 890 Q3 Highlights - Warehouse Expansion Daytona, FL 2/22/24 Natomas, CA: 3/14/24 6

Q3 Highlights - New Member Values KS Lemon Blueberry Loaf KS Daily Makeup Remover Towelettes 7 Lowering Prices New Items KS Farmed Shrimp $1 price reduction as of 5/21 KS Organic Pine Nuts from $29.99 to $24.99 KS Morning Buns KS Walking Shoes

Safe Harbor 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, inflation or deflation, 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 and wages), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, 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. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP. 8