SYS-CON MEDIA Authors: Xenia von Wedel, Peter Silva, Glenn Rossman, Ava Smith, Elizabeth White

News Feed Item

Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal 2014 and February Sales Results

ISSAQUAH, WA -- (Marketwired) -- 03/06/14 -- 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 2014, ended February 16, 2014. Net sales for the quarter increased six percent, to $25.76 billion, from $24.34 billion last year. Net sales for the first half increased six percent, to $50.22 billion, from $47.55 billion last year.

Comparable sales for the twelve-week and twenty-four-week periods were as follows:


                                     12 Weeks 24 Weeks
                                     -------- --------
                      U.S.              4%       4%
                      International     0%       1%

                      Total             3%       3%
                                     ======== ========

Comparable sales for these periods, excluding negative impacts from gasoline price deflation and foreign exchange, were as follows:


                                     12 Weeks 24 Weeks
                                     -------- --------
                      U.S.              5%       5%
                      International     7%       7%

                      Total             5%       5%
                                     ======== ========

Net income for the quarter was $463 million, or $1.05 per diluted share, compared to $547 million, or $1.24 per diluted share, last year. Net income for the first half was $888 million, or $2.01 per diluted share, compared to $963 million, or $2.19 per diluted share, last year.

According to Richard Galanti, Chief Financial Officer of Costco, "Last year's 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. Even with that distinction, however, the year-over-year comparison was unfavorable. Despite satisfactory sales results during the second fiscal quarter, several other factors led to lower earnings. These factors included: weaker sales and gross margin results in certain non-foods merchandise categories, particularly during the four-week holiday selling season; weaker gross margins in our fresh foods business; and lower reported international profits, resulting from the significant weakening of foreign exchange rates. The first four-week period of the quarter represented the majority of earnings underperformance in the quarter."

For the four-week reporting month of February ended March 2, 2014, the Company reported net sales of $7.90 billion, an increase of four percent from $7.58 billion during the similar four-week period last year. For the twenty-six week year-to-date period ended March 2, 2014, net sales were $54.22 billion, an increase of six percent from $51.35 billion during the similar twenty-six week period last year.

Comparable sales for the four-week and twenty-six-week periods ended March 2, 2014 were as follows:


                                      4 Weeks 26 Weeks
                                     -------- --------
                      U.S.              3%       4%
                      International     -1%      1%

                      Total             2%       3%
                                     ======== ========

Comparable sales for these periods, excluding the negative impacts from gasoline price deflation and foreign exchange, were as follows:


                                      4 Weeks 26 Weeks
                                     -------- --------
                      U.S.              4%       5%
                      International     5%       7%

                      Total             4%       5%
                                     ======== ========

Costco currently operates 649 warehouses, including 462 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 18 in Japan, 10 in Taiwan, nine in Korea and five in Australia. The Company plans to open up to an additional fourteen new warehouses prior to the end of its fiscal year on August 31, 2014. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

A conference call to discuss these second quarter operating results and February sales results is scheduled for 8:00 a.m. (PT) today, March 6, 2014, 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, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, amounts expected to be spent on expansion plans, 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 16, February 17, February 16, February 17,
                            2014         2013         2014         2013
                        ------------ ------------ ------------ ------------
REVENUE
  Net sales             $     25,756 $     24,343 $     50,224 $     47,547
  Membership fees                550          528        1,099        1,039
                        ------------ ------------ ------------ ------------
    Total revenue             26,306       24,871       51,323       48,586
OPERATING EXPENSES
  Merchandise costs           23,043       21,766       44,867       42,492
  Selling, general and
   administrative              2,531        2,361        5,032        4,693
  Preopening expenses              8            6           32           24
                        ------------ ------------ ------------ ------------
    Operating income             724          738        1,392        1,377
OTHER INCOME (EXPENSE)
  Interest expense               (26)         (25)         (53)         (38)
  Interest income and
   other, net                     30           26           48           46
                        ------------ ------------ ------------ ------------
INCOME BEFORE INCOME
 TAXES                           728          739        1,387        1,385
  Provision for income
   taxes                         255          185          483          410
                        ------------ ------------ ------------ ------------
Net income including
 noncontrolling
 interests                       473          554          904          975
Net income attributable
 to noncontrolling
 interests                       (10)          (7)         (16)         (12)
                        ------------ ------------ ------------ ------------
NET INCOME ATTRIBUTABLE
 TO COSTCO              $        463 $        547 $        888 $        963
                        ============ ============ ============ ============

NET INCOME PER COMMON
 SHARE ATTRIBUTABLE TO
 COSTCO:
  Basic                 $       1.05 $       1.26 $       2.02 $       2.22
                        ============ ============ ============ ============
  Diluted               $       1.05 $       1.24 $       2.01 $       2.19
                        ============ ============ ============ ============

Shares used in
 calculation (000's)
  Basic                      439,776      435,975      438,868      434,698
  Diluted                    442,829      439,812      442,627      439,222



Cash dividends declared
 per common share       $       0.31 $      7.275 $       0.62 $      7.550


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

                                                 February 16,   September 1,
                                                      2014          2013
                                                 ------------- -------------
                     ASSETS
Cash and cash equivalents                        $       5,130 $       4,644
Short-term investments                                   1,352         1,480
Receivables, net                                         1,244         1,201
Merchandise inventories                                  8,267         7,894
Deferred income taxes and other current assets             641           621
                                                 ------------- -------------
  Total current assets                                  16,634        15,840
Property and equipment, net                             14,348        13,881
Other assets                                               584           562
                                                 ------------- -------------
TOTAL ASSETS                                     $      31,566 $      30,283
                                                 ============= =============

             LIABILITIES AND EQUITY

Accounts payable                                 $       7,707 $       7,872
Accrued salaries and benefits                            2,260         2,037
Other current liabilities                                2,647         2,181
Deferred membership fees                                 1,270         1,167
                                                 ------------- -------------
  Total current liabilities                             13,884        13,257
Long-term debt, excluding current portion                4,985         4,998
Deferred income taxes and other liabilities                988         1,016
                                                 ------------- -------------
  Total liabilities                                     19,857        19,271
                                                 ------------- -------------

Total Costco stockholders' equity                       11,515        10,833
Noncontrolling interests                                   194           179
                                                 ------------- -------------
  Total equity                                          11,709        11,012
                                                 ------------- -------------
TOTAL LIABILITIES AND EQUITY                     $      31,566 $      30,283
                                                 ============= =============

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

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
High-performing enterprise Software Quality Assurance (SQA) teams validate systems that are ready for use - getting most actively involved as components integrate and form complete systems. These teams catch and report on defects, making sure the customer gets the best software possible. SQA teams have leveraged automation and virtualization to execute more thorough testing in less time - bringing Dev and Ops together, ensuring production readiness. Does the emergence of DevOps mean the end of E...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...
"Verizon offers public cloud, virtual private cloud as well as private cloud on-premises - many different alternatives. Verizon's deep knowledge in applications and the fact that we are responsible for applications that make call outs to other systems. Those systems and those resources may not be in Verizon Cloud, we understand at the end of the day it's going to be federated," explained Anne Plese, Senior Consultant, Cloud Product Marketing at Verizon Enterprise, in this SYS-CON.tv interview at...
"For the past 4 years we have been working mainly to export. For the last 3 or 4 years the main market was Russia. In the past year we have been working to expand our footprint in Europe and the United States," explained Andris Gailitis, CEO of DEAC, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. Acco...
"Cloud consumption is something we envision at Solgenia. That is trying to let the cloud spread to the user as a consumption, as utility computing. We want to allow the people to just pay for what they use, not a subscription model," explained Ermanno Bonifazi, CEO & Founder of Solgenia, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps,...
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"We help companies that are using a lot of Software as a Service. We help companies manage and gain visibility into what people are using inside the company and decide to secure them or use standards to lock down or to embrace the adoption of SaaS inside the company," explained Scott Kriz, Co-founder and CEO of Bitium, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...