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COSTCO WHOLESALE CORP /NEW Annual Report, Year Ended Sep 1, 2002

Filing Date
Filed November 22, 2002
Period End
September 1, 2002
Security
COST
In the record · 2016–202610-K1210-Q328-K130

COST filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 130 current reports (8-K) between 2016 and 2026.

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  2. Leadership change8-K · Feb ’22Feb ’22
  3. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed November 22, 2002. Cited figures are marked; the original filing is the authoritative source.

Costco Wholesale Corporation (COST) filed its annual report for the fiscal year ended September 1, 2002, showcasing robust growth and a strong operational model.

The company demonstrated an 11% increase in net sales, reaching $37.99 billiona, and a 16% rise in net income to $700 million. This performance was driven by consistent sales growth at existing locations and the successful integration of 29 new warehouses opened during the fiscal year. Key to Costco's success remains its membership model, with strong renewal rates and a growing penetration of the Executive Membership program contributing to a 17% increase in membership fee revenue.

The company also highlighted improvements in gross margin percentage due to better merchandise sourcing and operational efficiencies, though this was partially offset by the costs associated with the Executive Membership reward program. Costco continues its strategic expansion, with plans to open additional warehouses in the U.S., Canada, and internationally, funded through a combination of operating cash flow and existing credit facilities.

02—Key points

Key Highlights

  1. Net sales increased by 11% to $37.99 billion, and net income grew by 16% to $700 million.
  2. Comparable sales (warehouses open at least a year) increased by 6% in fiscal 2002, up from 4% in fiscal 2001.
  3. Membership fees and other revenue saw a significant increase of 17%, indicating strong member loyalty and program adoption.
  4. Gross margin improved to 10.55% of net sales, driven by core merchandising improvements and operational efficiencies.
  5. The company opened 29 new warehouses in fiscal 2002, continuing its strategic expansion across domestic and international markets.
  6. Costco maintained strong member renewal rates at 86% and noted increased penetration of its Executive Membership program.
  7. The company ended the fiscal year with a positive working capital of $180.8 million, a significant improvement from a deficit in the prior year.

03—Questions

Frequently Asked Questions

  1. What was Costco's overall financial performance in fiscal year 2002?

    Costco reported strong financial performance in fiscal year 2002. Net sales grew by 11% to $37.99 billion, and net income increased by 16% to $700 million, or $1.48 per diluted share. This growth was fueled by comparable sales increases and new warehouse openings.

  2. How did Costco's membership program perform?

    The membership program remained a strong contributor, with membership fees and other revenue increasing by 17%. Member renewal rates were stable at 86%, and the Executive Membership program saw increased penetration, offering additional benefits and a 2% reward on qualified purchases.

  3. What are Costco's plans for expansion?

    Costco plans to continue its expansion strategy by opening approximately 28 to 30 new warehouses in the United States and Canada in fiscal 2003, along with international expansion in the UK and Japan. These expansion efforts are primarily financed through operating cash flow and existing credit facilities.

  4. What is Costco's dividend policy?

    Costco has never paid regular dividends and currently has no plans to do so. However, its credit agreements generally permit dividend payments up to 50% of consolidated net income for the fiscal year.

04—Continue

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