Summary
Costco Wholesale Corporation's (COST) Q3 2013 report for the period ending May 11, 2013, demonstrates robust financial performance with a significant increase in net sales and net income year-over-year. The company reported an 8% increase in net sales, driven by a 5% rise in comparable sales and contributions from new warehouse openings. Membership fees also saw a healthy 12% increase, reflecting successful fee adjustments and strong renewal rates. Financially, Costco strengthened its balance sheet with a substantial increase in cash and cash equivalents and a significant increase in long-term debt, primarily to fund the special cash dividend paid in late 2012 and general corporate purposes. While investing activities show increased capital expenditures for warehouse expansion, the company generated strong operating cash flows, indicating solid operational efficiency. Overall, the report signals a healthy business with continued growth and effective cost management, positioning Costco favorably in the retail landscape.
Financial Highlights
48 data points| Revenue | $24.08B |
| Cost of Revenue | $21.04B |
| Gross Profit | $3.04B |
| SG&A Expenses | $2.31B |
| Operating Income | $722.00M |
| Interest Expense | $25.00M |
| Net Income | $459.00M |
| EPS (Basic) | $1.05 |
| EPS (Diluted) | $1.04 |
| Shares Outstanding (Basic) | 436.49M |
| Shares Outstanding (Diluted) | 440.78M |
Key Highlights
- 1Net sales increased by 8% to $23.55 billion for the third quarter, driven by a 5% increase in comparable sales and 25 new warehouses opened since the prior year.
- 2Membership fees grew by 12% to $531 million, attributed to prior year fee increases and strong member renewal rates (89.9% in US/Canada, 86.4% worldwide).
- 3Net income attributable to Costco rose 19% to $459 million, with diluted EPS increasing to $1.04 from $0.88.
- 4Gross margin as a percentage of net sales improved by 12 basis points due to favorable LIFO adjustments and a non-recurring legal settlement.
- 5SG&A expenses as a percentage of net sales saw a slight improvement of 3 basis points, indicating effective cost management.
- 6Cash and cash equivalents significantly increased to $5.45 billion from $3.53 billion, boosting liquidity.
- 7Long-term debt increased substantially to $4.89 billion from $1.38 billion, largely due to the issuance of Senior Notes to fund a special cash dividend.