Summary
Costco Wholesale Corporation's 2009 10-K filing reveals a challenging year marked by a 1.5% decrease in net sales to $69.9 billion, largely due to a 4% drop in comparable warehouse sales. This decline was exacerbated by significant gasoline price deflation and unfavorable foreign currency movements, which collectively impacted sales by approximately $4.6 billion. Despite the sales dip, the company maintained a strong membership base with a renewal rate of 87% and saw an increase in Executive Membership penetration. Key financial metrics indicate a 15% decrease in net income to $1.09 billion, or $2.47 per diluted share. This was influenced by a mix of factors including increased SG&A expenses as a percentage of sales due to lower sales volume and higher healthcare costs, partially offset by an improvement in gross margin as a percentage of net sales. The company continued its commitment to shareholder returns by increasing its quarterly cash dividend and actively repurchasing shares. Costco's robust balance sheet, ample liquidity, and strategic approach to managing operational costs and capital expenditures position it to navigate the prevailing economic conditions.
Financial Highlights
48 data points| Revenue | $71.42B |
| Cost of Revenue | $62.34B |
| Gross Profit | $9.09B |
| SG&A Expenses | $7.25B |
| Operating Income | $1.78B |
| Interest Expense | $108.00M |
| Net Income | $1.09B |
| EPS (Basic) | $2.50 |
| EPS (Diluted) | $2.47 |
| Shares Outstanding (Basic) | 433.99M |
| Shares Outstanding (Diluted) | 440.45M |
Key Highlights
- 1Net sales for fiscal year 2009 decreased by 1.5% to $69.9 billion, primarily due to a 4% decline in comparable warehouse sales, impacted by economic conditions, gasoline price deflation, and foreign currency exchange rates.
- 2Net income decreased by 15% to $1.09 billion, or $2.47 per diluted share, compared to the prior year.
- 3Membership fees increased by 1.8% to $1.53 billion, supported by new warehouse openings and increased Executive Membership penetration, though negatively impacted by a litigation settlement charge and currency fluctuations.
- 4Gross margin as a percentage of net sales improved by 28 basis points, benefiting from lower gasoline sales penetration and a favorable LIFO reserve adjustment.
- 5Selling, general, and administrative (SG&A) expenses increased as a percentage of net sales by 58 basis points, driven by lower sales volumes and higher employee healthcare costs.
- 6The company opened 15 new warehouses (net of relocations and closures), expanding its footprint to 527 locations globally.
- 7Costco repurchased approximately $57 million worth of its common stock during the fiscal year and increased its quarterly cash dividend from $0.16 to $0.18 per share.