Summary
Costco Wholesale Corporation (COST) reported its second quarter and first half fiscal year 2011 results, showcasing robust sales growth and improved profitability. Net sales increased by 11.4% for the quarter and 11.3% for the half-year, driven by a solid 7% comparable sales increase and contributions from new warehouse openings. This performance indicates continued strength in Costco's business model, even amidst a challenging economic environment. The company also demonstrated effective cost management, with selling, general, and administrative expenses decreasing as a percentage of net sales. The company's financial health appears strong, with substantial operating cash flow generation supporting ongoing investments in new warehouses and capital expenditures. Membership fees also saw a healthy increase, highlighting strong member loyalty and growth in the higher-tier Executive Membership program. While facing ongoing legal proceedings and market risks, Costco's management expressed confidence in its ability to navigate these challenges and maintain its competitive position.
Financial Highlights
48 data points| Revenue | $20.88B |
| Cost of Revenue | $18.23B |
| Gross Profit | $2.64B |
| SG&A Expenses | $2.04B |
| Operating Income | $596.00M |
| Interest Expense | $27.00M |
| Net Income | $348.00M |
| EPS (Basic) | $0.80 |
| EPS (Diluted) | $0.79 |
| Shares Outstanding (Basic) | 436.68M |
| Shares Outstanding (Diluted) | 443.19M |
Key Highlights
- 1Net sales for the second quarter of fiscal 2011 increased by 11.4% to $20.45 billion, driven by a 7% comparable sales increase.
- 2Total revenue for the first half of fiscal 2011 rose by 11.3% to $40.11 billion, with comparable sales also up 7%.
- 3Net income attributable to Costco for the second quarter increased by 16.4% to $348 million, resulting in diluted EPS of $0.79, up from $0.67 in the prior year.
- 4Membership fees grew by 10.4% in the second quarter, reflecting increased penetration of the Executive Membership program.
- 5Gross margin as a percentage of net sales improved by 15 basis points in the second quarter, driven by core merchandise sales improvements.
- 6The company opened 15 net new warehouses in the first half of fiscal 2011 and plans to open up to 15 more in the remainder of the fiscal year, indicating continued expansion.
- 7Costco repurchased approximately $95 million of its common stock in the second quarter of fiscal 2011.