8-K
COSTCO WHOLESALE CORP /NEW (COST)
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): September 26, 2024
COSTCO WHOLESALE CORPORATION
(Exact name of registrant as specified in its charter)
| Washington | 0-20355 | 91-1223280 |
|---|---|---|
| (State or other jurisdiction <br>of incorporation) | (Commission <br>File No.) | (I.R.S. Employer <br>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 September 26, 2024, the Company issued a press release containing its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended September 1, 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 fourth quarter of fiscal 2024 is attached as Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
99.1. Press release dated September 26, 2024.
99.2. Fourth 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: September 26, 2024 | By: | /s/ Gary Millerchip |
| Gary Millerchip | ||
| Executive Vice President and Chief Financial Officer |
Document
Exhibit 99.1
Press Release
COSTCO WHOLESALE CORPORATION REPORTS FOURTH QUARTER AND FISCAL
YEAR 2024 OPERATING RESULTS
ISSAQUAH, Wash., September 26, 2024 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the 16-week fourth quarter and the 52-week fiscal year ended September 1, 2024.
For the 16-week fourth quarter, the Company reported net sales of $78.2 billion, an increase of 1.0 percent compared to net sales of $77.4 billion in the 17-week fourth quarter of fiscal year 2023. For the 52-week fiscal year, the Company reported net sales of $249.6 billion, an increase of 5.0 percent from $237.7 billion reported in the 53-week fiscal year 2023.
The following comparable sales data reflect comparable locations year-over-year and comparable retail weeks.
Comparable sales were as follows:
| 16 Weeks | 16 Weeks | 52 Weeks | 52 Weeks | |
|---|---|---|---|---|
| Adjusted* | Adjusted* | |||
| U.S. | 5.3% | 6.3% | 4.5% | 5.0% |
| Canada | 5.5% | 7.9% | 7.0% | 8.1% |
| Other International | 5.7% | 9.3% | 8.1% | 8.4% |
| Total Company | 5.4% | 6.9% | 5.3% | 5.9% |
| E-commerce | 18.9% | 19.5% | 16.1% | 16.2% |
*Excluding the impacts from changes in gasoline prices and foreign exchange.
Net income for the 16-week fourth quarter was $2.354 billion, $5.29 per diluted share, compared to $2.160 billion, $4.86 per diluted share, in the 17-week fourth quarter last year. This year's results included a net non-recurring tax benefit of $63 million, $0.14 per diluted share, related to a transfer pricing settlement, and true-ups of tax reserves.
Net income for the 52-week fiscal year was $7.367 billion, $16.56 per diluted share, compared to $6.292 billion, $14.16 per diluted share, in the 53-week prior year.
Costco currently operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five 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, September 26, 2024, and will be available via a webcast on investor.costco.com (click "Events & Presentations”).
Certain statements contained in this document and the pre-recorded message 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
Press Release
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
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data) (unaudited)
| 16 Weeks Ended | 17 Weeks Ended | 52 Weeks Ended | 53 Weeks Ended | |||||
|---|---|---|---|---|---|---|---|---|
| September 1,<br>2024 | September 3,<br>2023 | September 1,<br>2024 | September 3,<br>2023 | |||||
| REVENUE | ||||||||
| Net sales | $ | 78,185 | $ | 77,430 | $ | 249,625 | $ | 237,710 |
| Membership fees | 1,512 | 1,509 | 4,828 | 4,580 | ||||
| Total revenue | 79,697 | 78,939 | 254,453 | 242,290 | ||||
| OPERATING EXPENSES | ||||||||
| Merchandise costs | 69,588 | 69,219 | 222,358 | 212,586 | ||||
| Selling, general and administrative | 7,067 | 6,939 | 22,810 | 21,590 | ||||
| Operating income | 3,042 | 2,781 | 9,285 | 8,114 | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest expense | (49) | (56) | (169) | (160) | ||||
| Interest income and other, net | 120 | 238 | 624 | 533 | ||||
| INCOME BEFORE INCOME TAXES | 3,113 | 2,963 | 9,740 | 8,487 | ||||
| Provision for income taxes | 759 | 803 | 2,373 | 2,195 | ||||
| NET INCOME | $ | 2,354 | $ | 2,160 | $ | 7,367 | $ | 6,292 |
| NET INCOME PER COMMON SHARE: | ||||||||
| Basic | $ | 5.30 | $ | 4.87 | $ | 16.59 | $ | 14.18 |
| Diluted | $ | 5.29 | $ | 4.86 | $ | 16.56 | $ | 14.16 |
| Shares used in calculation (000's): | ||||||||
| Basic | 444,013 | 443,876 | 443,914 | 443,854 | ||||
| Diluted | 444,977 | 444,445 | 444,759 | 444,452 |
Press Release
COSTCO WHOLESALE CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data) (unaudited)
Subject to Reclassification
| September 1,<br>2024 | September 3,<br>2023 | |||
|---|---|---|---|---|
| ASSETS | ||||
| CURRENT ASSETS | ||||
| Cash and cash equivalents | $ | 9,906 | $ | 13,700 |
| Short-term investments | 1,238 | 1,534 | ||
| Receivables, net | 2,721 | 2,285 | ||
| Merchandise inventories | 18,647 | 16,651 | ||
| Other current assets | 1,734 | 1,709 | ||
| Total current assets | 34,246 | 35,879 | ||
| OTHER ASSETS | ||||
| Property and equipment, net | 29,032 | 26,684 | ||
| Operating lease right-of-use assets | 2,617 | 2,713 | ||
| Other long-term assets | 3,936 | 3,718 | ||
| TOTAL ASSETS | $ | 69,831 | $ | 68,994 |
| LIABILITIES AND EQUITY | ||||
| CURRENT LIABILITIES | ||||
| Accounts payable | $ | 19,421 | $ | 17,483 |
| Accrued salaries and benefits | 4,794 | 4,278 | ||
| Accrued member rewards | 2,435 | 2,150 | ||
| Deferred membership fees | 2,501 | 2,337 | ||
| Current portion of long-term debt | 103 | 1,081 | ||
| Other current liabilities | 6,210 | 6,254 | ||
| Total current liabilities | 35,464 | 33,583 | ||
| OTHER LIABILITIES | ||||
| Long-term debt, excluding current portion | 5,794 | 5,377 | ||
| Long-term operating lease liabilities | 2,375 | 2,426 | ||
| Other long-term liabilities | 2,576 | 2,550 | ||
| TOTAL LIABILITIES | 46,209 | 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; 443,126,000 and 442,793,000 shares issued and outstanding | 2 | 2 | ||
| Additional paid-in capital | 7,829 | 7,340 | ||
| Accumulated other comprehensive loss | (1,828) | (1,805) | ||
| Retained earnings | 17,619 | 19,521 | ||
| TOTAL EQUITY | 23,622 | 25,058 | ||
| TOTAL LIABILITIES AND EQUITY | $ | 69,831 | $ | 68,994 |
Press Release
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in millions) (unaudited)
Subject to Reclassification
| 52 Weeks Ended | 53 Weeks Ended | |||
|---|---|---|---|---|
| September 1,<br>2024 | September 3,<br>2023 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net income | $ | 7,367 | $ | 6,292 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 2,237 | 2,077 | ||
| Non-cash lease expense | 315 | 412 | ||
| Stock-based compensation | 818 | 774 | ||
| Impairment of assets and other non-cash operating activities, net | (9) | 495 | ||
| Changes in working capital | 611 | 1,018 | ||
| Net cash provided by operating activities | 11,339 | 11,068 | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Purchases of short-term investments | (1,470) | (1,622) | ||
| Maturities and sales of short-term investments | 1,790 | 937 | ||
| Additions to property and equipment | (4,710) | (4,323) | ||
| Other investing activities, net | (19) | 36 | ||
| Net cash used in investing activities | (4,409) | (4,972) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Repayments of short-term borrowings | (920) | (935) | ||
| Proceeds from short-term borrowings | 928 | 917 | ||
| Repayments of long-term debt | (1,077) | (75) | ||
| Proceeds from issuance of long-term debt | 498 | — | ||
| Tax withholdings on stock-based awards | (315) | (303) | ||
| Repurchases of common stock | (700) | (676) | ||
| Cash dividend payments | (9,041) | (1,251) | ||
| Financing lease payments | (136) | (291) | ||
| Other financing activities, net | (1) | — | ||
| Net cash used in financing activities | (10,764) | (2,614) | ||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 40 | 15 | ||
| Net change in cash and cash equivalents | (3,794) | 3,497 | ||
| CASH AND CASH EQUIVALENTS BEGINNING OF YEAR | 13,700 | 10,203 | ||
| CASH AND CASH EQUIVALENTS END OF YEAR | $ | 9,906 | $ | 13,700 |
costex9928-k92624
4th Quarter FY 2024 Supplemental Information 1 Exhibit 99.2
$78.2B Net Sales +1.0% Growth1 +5.4% Comparable Sales +6.9% Adjusted Comparable Sales2 +6.4% Comparable Traffic -0.9% Comparable Ticket +18.9% E-Comm Comparable Sales +19.5% Adjusted E-Comm Comparable Sales3 Q4 Highlights - Sales 1 - Last year’s results included 17 reporting weeks for the quarter. Normalizing for the additional week net sales growth was +7.3% 2 - Comparable Sales excluding impacts from gas inflation/deflation and FX 3 - E-commerce comparable Sales excluding impacts from FX Comp Sales US Canada Other International Total Company Sales +5.3% +5.5% +5.7% +5.4% Ticket -0.3% -2.1% -2.2% -0.9% Traffic +5.6% +7.7% +8.1% +6.4% 2
Q4 Highlights - Financial Performance Reported Ex Gas Reported Ex Gas Core -5bps -11bps Ops -4bps 0bps Other Bus +44bps +42bps Central -3bps -2bps 2% Reward -4bps -3bps Equity Comp 0bps 0bps LIFO +5bps +5bps Preopening -1bp 0bps Total +40bps +33bps Total -8bps -2bps Core on Core Sales: +9bps + = Favorable/lower, - = Unfavorable/higher Gross Margin 11.00% +40 bps vs. Q4 FY’23 +33 bps ex. gas impact SG&A 9.04% -8 bps vs. Q4 FY’23 -2 bps ex. gas impact Diluted EPS $5.29 +8.8% Growth* Net Income $2.35B +9.0% Growth* *- “Other” Items for the Quarter: - Last year's results included 17 weeks while this year’s quarter had 16 weeks. - This year’s results included a non-recurring tax benefit of $63M, or $0.14/diluted share. - Normalizing for both of the above items, net income and diluted EPS growth was 12.7% and 12.6%, respectively. 3
+6.5%* Membership Income Growth (Normalized) +7.4%* Membership Income Growth ex-FX (Norm.) 90.5% Worldwide Membership Renewal Rate 92.9% US/CN Renewal Rate 76.2MM Paid Memberships +7.3% Growth 136.8MM Total Cardholders +7.0% Growth 35.4MM Executive Memberships 73.5% Penetration of Sales to Executive Members Q4 Highlights - Membership 4 * - This year’s results included 16 weeks, compared to 17 weeks last year. These numbers are normalized to adjust for the extra week last year.
+18.9% E-Comm Comparable Sales 1 - E-commerce comparable Sales excluding impacts from FX +19.5% Adjusted E-Comm Comparable Sales1 Top Sales Categories: - Appliances - Gold / Silver Bullion - Home Furnishings - Gift Cards Digital Metrics (Normalized for 16-weeks): - New Mobile Application Downloads: +29% - Site Traffic: +8% - Average Order Value: +5% - Costco Logistics Deliveries: +17% Digital Enhancements: - Improved native search on US mobile app - US warehouse inventory lookup within the app Q4 Highlights - Digital 5
Q4 FY’23 End FY’24 Q1 - Q3 FY’24 Q4 FY’24 End FY’25 (E) US 591 13 10 614 630 Canada 107 1 - 108 111 Other International 163 1 4 168 175 Total 861 15 14 890 916 Q4 Highlights - Warehouse Expansion Cheongna, Korea: 8/22/24Nanjing, China: 5/28/24 6
Q4 Highlights - New Member Values KS Organic Golden Maple Syrup KS Take and Bake Pizza 7 Lowering Every Day Low Prices New Items KS Baguette 2pk 17% Reduction KS Cashews 4% Reduction KS All Butter Pound Cake KS Tempura Shrimp Taco Kit
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