cost-20230525FALSECOSTCO WHOLESALE CORP /NEW000090983200009098322023-05-252023-05-25
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 25, 2023
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 25, 2023, the Company issued a press release containing its operating results for the third quarter (twelve weeks) and the first thirty-six weeks of fiscal 2023, ended May 7, 2023. A copy of the press release is included in Item 9.01.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. The following exhibits are included in this report:
104 Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101).
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.
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| | COSTCO WHOLESALE CORPORATION |
| | | |
| Dated: May 25, 2023 | | By: | /s/ Richard A. Galanti |
| | | Richard A. Galanti |
| | | Executive Vice President, Chief Financial Officer and Director |
Exhibit 99.1
Press Release
COSTCO WHOLESALE CORPORATION REPORTS THIRD QUARTER AND YEAR-TO-DATE
OPERATING RESULTS FOR FISCAL YEAR 2023
ISSAQUAH, Wash., May 25, 2023 - 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 2023, ended May 7, 2023.
Net sales for the quarter increased 1.9 percent, to $52.60 billion, from $51.61 billion last year. Net sales for the first 36 weeks increased 5.5 percent, to $160.28 billion, from $151.97 billion last year.
Comparable sales for the third quarter and first 36 weeks of fiscal 2023 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| 12 Weeks | | 12 Weeks | | 36 Weeks | | 36 Weeks |
| | | Adjusted* | | | | Adjusted* |
| U.S. | -0.1% | | 1.8% | | 4.9% | | 4.7% |
| Canada | -1.0% | | 7.4% | | 1.6% | | 8.4% |
| Other International | 4.1% | | 8.4% | | 1.6% | | 9.0% |
| Total Company | 0.3% | | 3.5% | | 4.0% | | 5.8% |
| E-commerce | -10.0% | | -9.0% | | -7.8% | | -6.6% |
*Excluding the impacts from changes in gasoline prices and foreign exchange.
Net income for the quarter was $1.30 billion, $2.93 per diluted share, which includes 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. Last year's third quarter net income was $1.35 billion, $3.04 per diluted share, which included a non-recurring $77 million pretax charge, $0.13 per diluted share, for incremental employee benefits. Net income for the first 36 weeks was $4.13 billion, $9.30 per diluted share, compared to $3.98 billion, $8.94 per diluted share, last year.
Costco currently operates 853 warehouses, including 587 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 32 in Japan, 29 in the United Kingdom, 18 in Korea, 14 in Taiwan, 14 in Australia, four in Spain, three in China, 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 25, 2023, and is available via a webcast on investor.costco.com (click on "Events & Presentations”).
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), energy and certain commodities, geopolitical conditions (including tariffs and the Ukraine conflict), 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.
CONTACTS: Costco Wholesale Corporation
Richard Galanti, 425/313-8203
David Sherwood, 425/313-8239
Josh Dahmen, 425/313-8254
COST-Earn
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data) (unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| 12 Weeks Ended | | 36 Weeks Ended |
| May 7,
2023 | | May 8,
2022 | | May 7,
2023 | | May 8,
2022 |
| REVENUE | | | | | | | |
| Net sales | $ | 52,604 | | | $ | 51,612 | | | $ | 160,280 | | | $ | 151,966 | |
| Membership fees | 1,044 | | | 984 | | | 3,071 | | | 2,897 | |
| Total revenue | 53,648 | | | 52,596 | | | 163,351 | | | 154,863 | |
| OPERATING EXPENSES | | | | | | | |
| Merchandise costs | 47,175 | | | 46,355 | | | 143,367 | | | 135,824 | |
| Selling, general and administrative | 4,794 | | | 4,450 | | | 14,651 | | | 13,743 | |
| Operating income | 1,679 | | | 1,791 | | | 5,333 | | | 5,296 | |
| OTHER INCOME (EXPENSE) | | | | | | | |
| Interest expense | (36) | | | (35) | | | (104) | | | (110) | |
| Interest income and other, net | 128 | | | 71 | | | 295 | | | 138 | |
| INCOME BEFORE INCOME TAXES | 1,771 | | | 1,827 | | | 5,524 | | | 5,324 | |
| Provision for income taxes | 469 | | | 455 | | | 1,392 | | | 1,287 | |
| Net income including noncontrolling interests | 1,302 | | | 1,372 | | | 4,132 | | | 4,037 | |
| Net income attributable to noncontrolling interests | — | | | (19) | | | — | | | (61) | |
| NET INCOME ATTRIBUTABLE TO COSTCO | $ | 1,302 | | | $ | 1,353 | | | $ | 4,132 | | | $ | 3,976 | |
| NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | | | | | | | |
| Basic | $ | 2.94 | | | $ | 3.05 | | | $ | 9.31 | | | $ | 8.96 | |
| Diluted | $ | 2.93 | | | $ | 3.04 | | | $ | 9.30 | | | $ | 8.94 | |
| Shares used in calculation (000s): | | | | | | | |
| Basic | 443,814 | | | 443,700 | | | 443,843 | | | 443,567 | |
| Diluted | 444,360 | | | 444,886 | | | 444,455 | | | 444,802 | |
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data) (unaudited)
Subject to Reclassification
| | | | | | | | | | | |
| May 7,
2023 | | August 28,
2022 |
| ASSETS | | | |
| CURRENT ASSETS | | | |
| Cash and cash equivalents | $ | 12,493 | | | $ | 10,203 | |
| Short-term investments | 1,215 | | | 846 | |
| Receivables, net | 2,502 | | | 2,241 | |
| Merchandise inventories | 16,324 | | | 17,907 | |
| Other current assets | 1,755 | | | 1,499 | |
| Total current assets | 34,289 | | | 32,696 | |
| OTHER ASSETS | | | |
| Property and equipment, net | 25,931 | | | 24,646 | |
| Operating lease right-of-use assets | 2,806 | | | 2,774 | |
| Other long-term assets | 3,726 | | | 4,050 | |
| TOTAL ASSETS | $ | 66,752 | | | $ | 64,166 | |
| LIABILITIES AND EQUITY | | | |
| CURRENT LIABILITIES | | | |
| Accounts payable | $ | 16,853 | | | $ | 17,848 | |
| Accrued salaries and benefits | 4,117 | | | 4,381 | |
| Accrued member rewards | 2,076 | | | 1,911 | |
| Deferred membership fees | 2,436 | | | 2,174 | |
| Current portion of long-term debt | — | | | 73 | |
| Other current liabilities | 6,226 | | | 5,611 | |
| Total current liabilities | 31,708 | | | 31,998 | |
| OTHER LIABILITIES | | | |
| Long-term debt, excluding current portion | 6,497 | | | 6,484 | |
| Long-term operating lease liabilities | 2,507 | | | 2,482 | |
| Other long-term liabilities | 2,467 | | | 2,555 | |
| TOTAL LIABILITIES | 43,179 | | | 43,519 | |
| 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; 443,222,000 and 442,664,000 shares issued and outstanding | 2 | | | 2 | |
| Additional paid-in capital | 7,211 | | | 6,884 | |
| Accumulated other comprehensive loss | (1,680) | | | (1,829) | |
| Retained earnings | 18,035 | | | 15,585 | |
| Total Costco stockholders’ equity | 23,568 | | | 20,642 | |
| Noncontrolling interests | 5 | | | 5 | |
| TOTAL EQUITY | 23,573 | | | 20,647 | |
| TOTAL LIABILITIES AND EQUITY | $ | 66,752 | | | $ | 64,166 | |