12 Weeks 36 Weeks
-------- --------
U.S. -5% -1%
International -12% -10%
Total -7% -3%
======== ========
Comparable sales for the 12-week and 36-week periods, excluding the
negative impacts from gasoline deflation and foreign exchange (primarily in
Canada, the United Kingdom and Korea), were as follows:
12 Weeks 36 Weeks
-------- --------
U.S. (w/o gas deflation) 0% +2%
International (w/o Fx) +8% +8%
Total +2% +4%
======== ========
Net income for the third quarter of fiscal 2009 was $209.6 million, or $.48
per diluted share, compared to $295.1 million, or $.67 per diluted share,
during the third quarter of fiscal 2008. Net income for the first
thirty-six weeks of fiscal 2009 was $711.8 million, or $1.62 per diluted
share, compared to net income for the first thirty-six weeks of fiscal 2008
of $884.9 million, or $1.99 per diluted share.
Richard Galanti, Chief Financial Officer of Costco, stated that "third
quarter 2009 earnings results were negatively impacted by several factors,
including: a pretax charge of $34 million (mostly non-cash) related to a
litigation settlement concerning our membership renewal policy; higher
employee benefits costs, mainly consisting of higher health care usage;
lower international profits, a result of the significant strengthening of
the U.S. dollar when compared to the currencies of Canada, the United
Kingdom, Korea and Mexico; and lastly, ongoing weakness in sales,
particularly sales of higher-ticket, discretionary items."
Costco currently operates 555 warehouses, including 407 in the United
States and Puerto Rico, 77 in Canada, 21 in the United Kingdom, six in
Korea, five in Taiwan, eight in Japan and 31 in Mexico. The Company also
operates Costco Online, an electronic commerce web site, at www.costco.com
and at www.costco.ca in Canada. The Company plans to open an additional
six new warehouses prior to the end of its 2009 fiscal year on August 30,
2009.
A conference call to discuss these third quarter operating results is
scheduled for 8:00 a.m. (PT) today, May 28, 2009, and is available via a
webcast on www.costco.com (click on Investor Relations and "Webcasts").
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, conditions affecting the acquisition,
development, ownership or use of real estate, actions of vendors, rising
costs associated with employees (including health care and workers'
compensation costs), rising costs associated with the acquisition of
merchandise (including the direct and indirect effects of the rising cost
of petroleum-based products and fuel and energy costs), 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 thousands, except per share data)
(unaudited)
12 Weeks Ended 36 Weeks Ended
------------------------ ------------------------
May 10, 2009 May 11, 2008 May 10, 2009 May 11, 2008
----------- ----------- ----------- -----------
REVENUE
Net sales $15,477,445 $16,262,793 $48,001,528 $48,351,255
Membership fees 328,448 350,924 1,042,796 1,031,878
----------- ----------- ----------- -----------
Total revenue 15,805,893 16,613,717 49,044,324 49,383,133
OPERATING EXPENSES
Merchandise costs 13,775,988 14,548,022 42,822,761 43,204,722
Selling, general and
administrative 1,654,943 1,582,488 4,998,447 4,767,613
Preopening expenses 9,280 8,427 29,392 39,618
Provision for impaired
assets and closing
costs, net 6,562 9,205 14,514 6,419
----------- ----------- ----------- -----------
Operating income 359,120 465,575 1,179,210 1,364,761
OTHER INCOME (EXPENSE)
Interest expense (25,168) (24,140) (74,954) (70,579)
Interest income and
other 4,156 23,888 30,174 97,769
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 338,108 465,323 1,134,430 1,391,951
Provision for income
taxes 128,516 170,257 422,598 507,054
----------- ----------- ----------- -----------
NET INCOME $ 209,592 $ 295,066 $ 711,832 $ 884,897
=========== =========== =========== ===========
NET INCOME PER COMMON
SHARE:
Basic $ 0.48 $ 0.68 $ 1.64 $ 2.04
=========== =========== =========== ===========
Diluted $ 0.48 $ 0.67 $ 1.62 $ 1.99
=========== =========== =========== ===========
Shares used in
calculation (000's)
Basic 434,354 433,678 433,426 434,515
Diluted 439,997 443,281 439,995 444,379
Dividends per share $ 0.18 $ 0.16 $ 0.50 $ 0.45
Contact Information: CONTACTS: Costco Wholesale Corporation Richard Galanti, 425/313-8203 Bob Nelson, 425/313-8255 Jeff Elliott, 425/313-8264