Summary
Costco Wholesale Corporation reported solid financial results for the third quarter and the first 36 weeks of fiscal year 2014. Net sales grew by 7% in the third quarter and 6% year-to-date, driven by a combination of comparable sales growth and new warehouse openings. Membership fees also saw a healthy increase of 6%, indicating strong member loyalty and uptake of higher-tier memberships. The company's net income rose by 3% to $473 million for the quarter, translating to a diluted EPS of $1.07. Despite slight pressures on gross margin due to LIFO adjustments and increased promotional activity, Costco demonstrated effective cost management, with SG&A expenses as a percentage of net sales remaining largely stable. The balance sheet shows a strong liquidity position with cash and cash equivalents and short-term investments totaling over $7.2 billion. The company continued its investment in growth, opening new warehouses and planning further expansion, with a capital expenditure budget of approximately $2.2 billion for fiscal year 2014. Costco also returned capital to shareholders through an increased quarterly dividend of $0.355 per share and ongoing share repurchases.
Financial Highlights
46 data points| Revenue | $25.79B |
| Cost of Revenue | $22.55B |
| Gross Profit | $3.24B |
| SG&A Expenses | $2.49B |
| Operating Income | $737.00M |
| Interest Expense | $25.00M |
| Net Income | $473.00M |
| EPS (Basic) | $1.08 |
| EPS (Diluted) | $1.07 |
| Shares Outstanding (Basic) | 439.45M |
| Shares Outstanding (Diluted) | 442.72M |
Key Highlights
- 1Net sales increased by 7% year-over-year for the third quarter to $25.2 billion, and by 6% for the first 36 weeks to $75.5 billion.
- 2Comparable warehouse sales grew by 4% in the third quarter and 3% year-to-date, with comparable sales excluding gasoline price and foreign currency changes increasing by 6% and 5% respectively.
- 3Membership fees increased by 6% to $561 million for the quarter, reflecting continued member growth and increased penetration of the Executive Membership program.
- 4Net income attributable to Costco for the third quarter was $473 million, a 3% increase from the prior year, resulting in diluted EPS of $1.07.
- 5The company maintained a strong liquidity position with $7.28 billion in cash, cash equivalents, and short-term investments as of May 11, 2014.
- 6Costco plans to spend approximately $2.2 billion on capital expenditures in fiscal year 2014 for new and remodeled warehouses, IT modernization, and other operational improvements.
- 7The quarterly cash dividend was increased by 14.5% to $0.355 per share, reflecting confidence in future performance and commitment to shareholder returns.