Summary
Costco Wholesale Corporation's (COST) 10-Q filing for the period ending February 15, 2015, reveals a solid performance characterized by revenue growth and increased net income, driven by comparable sales and membership fee increases. While facing headwinds from gasoline price deflation and unfavorable foreign currency movements, the company demonstrated resilience through improved gross margins, particularly from its ancillary businesses like gasoline, and effective management of selling, general, and administrative (SG&A) expenses. The company's strong operational execution is evident in its net cash provided by operating activities, which saw a significant increase. Investments in new warehouses continue, with plans for further expansion, signaling confidence in future growth. Furthermore, Costco's commitment to shareholder returns is highlighted by a substantial special cash dividend declared and paid during the period, alongside ongoing stock repurchase programs.
Financial Highlights
47 data points| Revenue | $27.45B |
| Cost of Revenue | $23.90B |
| Gross Profit | $3.56B |
| SG&A Expenses | $2.67B |
| Operating Income | $877.00M |
| Interest Expense | $27.00M |
| Net Income | $598.00M |
| EPS (Basic) | $1.36 |
| EPS (Diluted) | $1.35 |
| Shares Outstanding (Basic) | 440.38M |
| Shares Outstanding (Diluted) | 442.90M |
Key Highlights
- 1Net sales increased by 4% to $26,872 million for the second quarter ended February 15, 2015, compared to the prior year quarter, driven by comparable warehouse sales growth and new warehouse openings.
- 2Membership fees saw a 6% increase to $582 million, attributed to new memberships and higher penetration of the Executive Membership program.
- 3Gross margin percentage improved by 54 basis points to 11.07%, largely due to the gasoline business, despite a decrease in gasoline prices.
- 4Net income attributable to Costco increased significantly by 29% to $598 million, or $1.35 per diluted share, compared to $463 million, or $1.05 per diluted share, in the prior year period.
- 5The company generated strong operating cash flow, with net cash provided by operating activities at $2,028 million for the first half of the fiscal year, an increase from $1,652 million in the prior year.
- 6Costco declared and paid a substantial special cash dividend of $5.00 per share in addition to its regular quarterly dividend, demonstrating a commitment to returning capital to shareholders.
- 7The company plans to open approximately 22 additional warehouses for the remainder of fiscal 2015, indicating continued investment in growth.