10-QPeriod: Q1 FY2010

COSTCO WHOLESALE CORP /NEW Quarterly Report for Q1 Ended Nov 22, 2009

Filed December 18, 2009For Securities:COST

Summary

Costco Wholesale Corporation (COST) reported its fiscal first quarter 2010 results for the period ending November 22, 2009. The company demonstrated resilience with net sales increasing by 5.5% to $16.92 billion, driven by a 3% rise in comparable warehouse sales and contributions from new store openings. Membership fees saw a 5.2% increase, indicating strong member loyalty and growth in the premium Executive Membership program. Despite a slight decrease in gross margin percentage and an increase in SG&A expenses as a percentage of sales, net income grew marginally by 1% to $266 million. Diluted earnings per share remained stable at $0.60. The company's financial position remains robust, with total assets increasing and a healthy cash and cash equivalents balance. Costco also continued its commitment to shareholder returns by declaring a quarterly cash dividend of $0.18 per share.

Financial Highlights

46 data points
Beta

Revenue

$17.30B

12.8% Gross Margin

Net Income

$266.00M

1.5% Net Margin

EPS (Diluted)

$0.60

Total Assets

$23.48B

Cash & Equivalents

$3.62B

Free Cash Flow

$438.00M

Financial Statements
Beta
Revenue$17.30B
Cost of Revenue$15.08B
Gross Profit$2.22B
SG&A Expenses$1.78B
Operating Income$428.00M
Interest Expense$24.00M
Net Income$266.00M
EPS (Basic)$0.61
EPS (Diluted)$0.60
Shares Outstanding (Basic)437.17M
Shares Outstanding (Diluted)444.85M

Key Highlights

  • 1Net sales increased by 5.5% to $16.92 billion, with comparable warehouse sales up 3%.
  • 2Membership fees grew by 5.2% to $377 million, reflecting continued member engagement and a higher Executive Membership penetration.
  • 3Net income rose slightly by 1% to $266 million ($0.60 per diluted share), showing stability amidst economic challenges.
  • 4Total assets grew to $23.48 billion from $21.98 billion in the prior fiscal year-end.
  • 5Cash and cash equivalents and short-term investments totaled $4.19 billion, providing strong liquidity.
  • 6The company declared a quarterly cash dividend of $0.18 per share, an increase of $0.02 per share year-over-year.
  • 7Expansion continues with 21 net new warehouses opened since the prior fiscal year-end and plans for approximately 12 more in fiscal 2010.

Frequently Asked Questions

Costco reported a 5.5% increase in net sales for the first quarter of fiscal 2010, reaching $16.92 billion. This growth was supported by a 3% increase in comparable warehouse sales and the addition of new warehouse locations.

Membership fees increased by 5.2% to $377 million. This growth is attributed to new membership sign-ups and a higher penetration rate of the premium Executive Membership program, suggesting sustained member loyalty and value perception.

While gross margin as a percentage of net sales slightly decreased by nine basis points, and selling, general, and administrative expenses as a percentage of net sales increased by four basis points, Costco managed to achieve a 1% increase in net income to $266 million. This indicates effective cost management in a challenging economic environment.

Costco continues to invest in growth, with plans to spend approximately $1.3 billion in fiscal 2010 on real estate, construction, remodeling, and equipment for warehouses. They opened six new warehouses in the first quarter and plan to open approximately 12 more for the remainder of the fiscal year.