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Wednesday May 24, 9:15 am Eastern Time
Company Press Release
Costco Wholesale Corporation Reports Third Quarter and Year-to-date Operating Results for Fiscal 2000 and Comments On Future Earnings Outlook
ISSAQUAH, Wash.--(BUSINESS WIRE)--May 24, 2000--Costco
Wholesale Corporation (Nasdaq:COST - news) announced today
its operating results for the third quarter (12 weeks) and
first thirty-six weeks of fiscal 2000, ended May 7, 2000.
Net sales for the third quarter of fiscal 2000 increased
14% to $6.77 billion from $5.94 billion during the third
quarter of fiscal 1999. On a comparable warehouse basis,
that is warehouses open at least a year, net sales
increased by 10%.
Net income for the third quarter of fiscal 2000 increased
14% to $120.3 million, or $.26 per diluted share, from
$105.9 million, or $.23 per diluted share, during the third
quarter of fiscal 1999.
Net sales for the first thirty-six weeks of fiscal 2000
increased 16% to $21.21 billion from $18.32 billion during
the first thirty-six weeks of fiscal 1999. Comparable
warehouse sales during the first thirty-six weeks of fiscal
2000 increased 12% over the prior year's levels.
Net income for the first thirty-six weeks of fiscal 2000
was $431.3 million, or $.92 per diluted share. Excluding
the impact of a one-time accounting charge taken in last
year's first quarter, net income for the first thirty-six
weeks of fiscal 1999 was $362.1 million, or $.78 per
diluted share, resulting in year-over-year earnings and
earnings per share increases of 19% and 18%, respectively.
In last year's first quarter, the Company recorded a $118
million non-cash, after-tax charge, reflecting the
cumulative effect of the Company's change in accounting for
membership fees from a cash to a deferred method, whereby
membership fee income is recognized ratably over the one-
year life of the membership. Including this one-time
charge, the Company last year reported net income of $244.1
million or $.53 per diluted share for the first thirty-six
weeks of fiscal 1999.
In terms of the earnings outlook for the fourth quarter of
fiscal 2000, which ends September 3rd, the company expects
to be $.01 to $.02 per share below the current average
published consensus estimate of $.45 per share. For fiscal
year 2001, the company expects earnings per share growth to
be in the 11% to 13% range.
Costco currently operates 305 warehouses, including 231 in
the United States, 59 in Canada, eight in the United
Kingdom, three in Korea, three in Taiwan, and a warehouse
in Japan; as well as 18 additional warehouses in Mexico
with a joint venture partner. The Company also operates
Costco Online, an electronic commerce web site, at
www.costco.com. The Company plans to open an additional 10
to 12 new warehouses (including two to three relocations of
existing warehouses to larger and better-located
facilities) prior to the end of its fiscal year 2000 on
September 3, 2000.
Certain statements contained in this release 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, conditions affecting the
acquisition, development, ownership or use of real estate,
actions of vendors, Year 2000 issues, and other risks
identified from time to time in the Company's public
statements and reports filed with the SEC.
COSTCO WHOLESALE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(unaudited)
12 Weeks Ended 36 Weeks Ended
------------------------ ------------------------
May 7, 2000 May 9, 1999 May 7, 2000 May 9, 1999
----------- ----------- ----------- -----------
REVENUE
Net Sales $6,768,608 $5,941,049 $21,206,406 $18,319,732
Membership fees
and other 126,000 112,771 368,701 324,524
---------- ---------- ----------- -----------
Total Revenue 6,894,608 6,053,820 21,575,107 18,644,256
OPERATING EXPENSES
Merchandise costs 6,084,246 5,341,716 18,996,814 16,418,154
Selling, general
and administrative 604,924 528,158 1,838,380 1,590,713
Preopening expenses 6,728 6,120 25,170 20,778
Provision for impaired
assets and warehouse
closing costs 1,500 1,500 4,000 6,500
---------- ---------- ----------- -----------
Operating Income 197,210 176,326 710,743 608,111
OTHER INCOME (EXPENSE)
Interest expense (9,604) (10,524) (30,577) (32,431)
Interest income
and other 12,943 10,659 38,593 27,890
---------- ---------- ----------- -----------
INCOME BEFORE INCOME TAXES
AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 200,549 176,461 718,759 603,570
Provision for
income taxes 80,220 70,584 287,504 241,427
---------- ---------- ----------- -----------
INCOME BEFORE CUMULATIVE
EFFECT OF
ACCOUNTING CHANGE 120,329 105,877 431,255 362,143
Cumulative effect of
accounting change,
net of tax --- --- --- (118,023)
---------- ---------- ----------- -----------
NET INCOME $120,329 $105,877 $431,255 $244,120
========== ========== =========== ===========
NET INCOME PER COMMON SHARE:
Basic earnings per share:
Income before cumulative
effect of accounting
change $0.27 $0.24 $0.97 $0.83
Cumulative effect of
accounting change,
net of tax --- --- --- (0.27)
---------- ---------- ----------- -----------
Net income $0.27 $0.24 $0.97 $0.56
========== ========== =========== ===========
Diluted earnings per share:
Income before cumulative
effect of
accounting change $0.26 $0.23 $0.92 $0.78
Cumulative effect of
accounting change,
net of tax --- --- --- (0.25)
---------- ---------- ----------- -----------
Net Income $0.26 $0.23 $0.92 $0.53
========== ========== =========== ===========
Shares used in calculation (000's):
Basic 448,113 440,438 445,557 437,968
Diluted 478,750 473,570 476,409 470,362
========== ========== =========== ===========
--------------------------------------------------------------------------------
Contact:
Costco Wholesale Corporation
Richard Galanti, 425/313-8203
Bob Nelson, 425/313-8255 |
