What was Costco's revenue performance in the first quarter of fiscal year 2002?

Costco reported strong net sales growth of 11% in the first quarter of fiscal year 2002, reaching $8.3 billion. This increase was driven by the addition of new warehouses and a 5% rise in comparable warehouse sales.

How did membership fees contribute to Costco's performance?

Membership fees and other revenue increased by a significant 23% in the first quarter of fiscal year 2002. This growth was attributed to a prior year increase in annual membership fees, new member acquisitions, higher penetration of the Executive Membership program, and a strong member renewal rate of 86%.

What is Costco's outlook for expansion in fiscal year 2002?

Costco plans aggressive expansion in fiscal year 2002, with an estimated capital expenditure of $1.0 billion to $1.15 billion for new warehouses and related operations in the United States and Canada. Additionally, they plan to invest $100 million to $150 million for international expansion, including the United Kingdom, Asia, and Mexico.

How did the Executive Membership program affect gross margins?

The Executive Membership's 2% reward program contributed to a slight decrease in gross margin as a percentage of net sales. This was also influenced by a shift in the sales mix of core merchandising activities, though these impacts were partially offset by improvements in ancillary and international operations.

COST 10-Q Quarterly Report Q1 FY2002 — Revenue, Net Income, EPS

Summary

Costco Wholesale Corporation's (COST) first quarter fiscal year 2002 report, ending November 24, 2001, indicates stable net income compared to the prior year, with net income at $129.7 million, or $0.28 per diluted share, matching last year's results. However, the company demonstrated robust net sales growth of 11%, reaching $8.3 billion. This growth was primarily driven by the addition of 34 net new warehouses since the prior year's comparable period and a 5% increase in comparable warehouse sales, with pricing not being a significant factor. Membership fees saw a significant 23% increase, contributing 2.04% of net sales, due to prior year fee increases, new member acquisition, executive membership growth, and strong renewal rates (86%). While gross margin as a percentage of sales slightly decreased to 10.40% from 10.47%, this was attributed to the cost of the Executive Membership's 2% reward program and a shift in sales mix, partially offset by improvements in ancillary and international operations. The company is actively expanding, with plans for approximately 37-40 new US and Canadian warehouses and 3-5 international units in fiscal 2002, supported by a healthy cash flow from operations and available credit facilities.

Key Highlights

1Net income remained stable at $129.7 million ($0.28 per diluted share) for Q1 FY2002 compared to Q1 FY2001.
2Net sales increased by 11% to $8.3 billion in Q1 FY2002, driven by new warehouse openings and comparable warehouse sales growth.
3Comparable warehouse sales grew by 5% in Q1 FY2002, indicating healthy performance in existing stores.
4Membership fees and other revenue surged by 23%, reflecting increased fees, new memberships, executive program growth, and high renewal rates (86%).
5Gross margin as a percentage of net sales slightly declined to 10.40% from 10.47%, impacted by the Executive Membership reward program and sales mix shifts.
6Significant capital expenditure planned for FY2002, with $1.0-$1.15 billion for US/Canada expansion and $100-$150 million for international growth.
7Net cash provided by operating activities more than doubled to $224.7 million in Q1 FY2002 compared to $118.1 million in Q1 FY2001.

COSTCO WHOLESALE CORP /NEW Quarterly Report for Q1 Ended Nov 25, 2001

Summary

Key Highlights

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