Summary
Costco Wholesale Corporation's (COST) Q3 2012 filing for the period ending May 6, 2012, demonstrates continued top-line growth and solid profitability. Net sales increased by 8.2% year-over-year to $21.8 billion, driven by comparable store sales growth of 5% and contributions from new warehouse openings. Membership fees also saw a healthy increase of 8.9%, bolstered by fee adjustments and higher Executive Membership penetration. The company maintained its operational efficiency, with selling, general, and administrative expenses as a percentage of net sales improving slightly, while net income grew by a robust 19% to $386 million, translating to diluted EPS of $0.88. Financially, Costco ended the quarter with a strong liquidity position, including over $5.9 billion in cash and short-term investments. The company made significant progress in debt management, repaying its $900 million 5.3% Senior Notes. Furthermore, Costco continued to return capital to shareholders through share repurchases and a declared quarterly dividend of $0.275 per share. The company reiterated its commitment to expansion, planning approximately $1.4 billion in capital expenditures for fiscal 2012, including the opening of new warehouses.
Financial Highlights
48 data points| Revenue | $22.32B |
| Cost of Revenue | $19.54B |
| Gross Profit | $2.78B |
| SG&A Expenses | $2.15B |
| Operating Income | $623.00M |
| Interest Expense | $19.00M |
| Net Income | $386.00M |
| EPS (Basic) | $0.89 |
| EPS (Diluted) | $0.88 |
| Shares Outstanding (Basic) | 433.79M |
| Shares Outstanding (Diluted) | 439.17M |
Key Highlights
- 1Net sales increased 8.2% to $21.8 billion, driven by a 5% increase in comparable sales and new warehouse openings.
- 2Membership fees grew 8.9% to $475 million, benefiting from membership fee increases and higher Executive Membership penetration.
- 3Net income rose 19% to $386 million, with diluted earnings per share reaching $0.88, up from $0.73 in the prior year's quarter.
- 4Gross margin as a percentage of net sales saw a modest increase of five basis points, aided by a lower LIFO inventory charge compared to the prior year.
- 5The company repaid $900 million in 5.3% Senior Notes, strengthening its balance sheet.
- 6Cash and cash equivalents and short-term investments totaled $5.98 billion, indicating strong liquidity.
- 7Costco repurchased approximately $130 million of its common stock during the quarter and declared a quarterly dividend of $0.275 per share.