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COSTCO WHOLESALE CORP /NEW Annual Report, Year Ended Aug 31, 2003

Filing Date
Filed November 21, 2003
Period End
August 31, 2003
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.

  1. FY2019 annual report10-K · Oct ’19Oct ’19
  2. Leadership change8-K · Feb ’22Feb ’22
  3. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed November 21, 2003. Cited figures are marked; the original filing is the authoritative source.

Costco Wholesale Corporation (COST) filed its 2003 10-K report, highlighting continued growth and operational efficiency.

The company reported robust net sales of $41.7 billiona for the fiscal year ended August 31, 2003, a 10% increase year-over-year, driven by comparable warehouse sales and the opening of 23 net new warehouses. Net income rose 3% to $721 million, translating to $1.53 per diluted share. The company's membership model continues to be a strong contributor, with revenue from membership fees and other sources increasing by 11% and member renewal rates holding steady at 86%.

Costco's strategy of offering a limited selection of high-quality merchandise at low prices, combined with efficient operations and rapid inventory turnover, remains effective in driving sales volume and profitability despite lower gross margins compared to traditional retailers. The company also continues its disciplined expansion, with plans for further warehouse openings in the U.S., Canada, and internationally.

02—Key points

Key Highlights

  1. Net sales reached $41.7 billion in fiscal year 2003, a 10% increase compared to fiscal year 2002.
  2. Net income grew by 3% to $721 million, or $1.53 per diluted share.
  3. Comparable warehouse sales increased by approximately 5% in fiscal 2003.
  4. Membership fees and other revenue increased by 11%, contributing 2.05% of net sales.
  5. The company opened a net of 23 new warehouses in fiscal 2003, expanding its global footprint.
  6. Member renewal rates remained strong at 86%.
  7. Gross margin as a percentage of net sales improved slightly to 10.69%.

03—Questions

Frequently Asked Questions

  1. What was Costco's revenue growth in fiscal year 2003?

    Costco reported net sales of $41,692,699 in fiscal year 2003, an increase of 10% from $37,993,093 in fiscal year 2002. This growth was attributed to both increased comparable warehouse sales (approximately 55% of the increase) and the opening of new warehouses (approximately 45% of the increase).

  2. How did Costco's membership fees perform in 2003?

    Membership fees and other revenue increased by 11% to $852,853 in fiscal 2003 from $769,406 in fiscal 2002. This revenue represented 2.05% of net sales, up from 2.03% in the prior year. The increase was driven by new memberships from newly opened warehouses and increased penetration of the Executive Membership program. Member renewal rates remained consistent at 86%.

  3. What is Costco's strategy for international expansion?

    Costco is strategically expanding its international presence. In fiscal 2004, the company planned to invest approximately $75,000 to $125,000 for international expansion, focusing on existing markets like the United Kingdom and Asia, as well as exploring other potential international ventures. As of August 31, 2003, Costco operated warehouses in Canada, the United Kingdom, Korea, Taiwan, and Japan, and through a joint venture in Mexico.

  4. Does Costco pay dividends?

    Costco has historically not paid regular dividends and currently has no plans to initiate a cash dividend. Its credit agreements do permit dividend payments up to 50% of consolidated net income in any fiscal year.

04—Continue

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