Summary
Costco Wholesale Corporation reported its first quarter results for fiscal year 2017, ending November 20, 2016. The company demonstrated solid top-line growth with a 3% increase in net sales to $27.5 billion, driven by both new warehouse openings and a 1% rise in comparable sales. Membership fee revenue also saw a healthy 6% increase, indicating continued member loyalty and engagement, particularly with the Executive Membership program. Net income grew by 14% to $545 million, translating to diluted earnings per share of $1.24, up from $1.09 in the prior year's comparable quarter. The company's operational efficiency was highlighted by a 29 basis point increase in gross margin percentage, partly due to a non-recurring legal settlement, and despite a slight increase in SG&A as a percentage of net sales attributed to system modernization and payroll. Operationally, Costco continued its global expansion, opening eight net new warehouses during the quarter. While facing some price deflation in key categories like food and hardlines, the company managed these pressures through strategic pricing and merchandise mix adjustments. Management expressed confidence in the company's liquidity and capital resources, supported by robust operating cash flows and existing cash reserves, to fund future growth and operations. The company also continued its commitment to shareholder returns by declaring a quarterly cash dividend of $0.45 per share.
Financial Highlights
48 data points| Revenue | $28.10B |
| Cost of Revenue | $24.29B |
| Gross Profit | $3.81B |
| SG&A Expenses | $2.94B |
| Operating Income | $849.00M |
| Interest Expense | $29.00M |
| Net Income | $545.00M |
| EPS (Basic) | $1.24 |
| EPS (Diluted) | $1.24 |
| Shares Outstanding (Basic) | 438.01M |
| Shares Outstanding (Diluted) | 440.52M |
Key Highlights
- 1Net sales increased by 3% to $27.5 billion for the first quarter of fiscal year 2017.
- 2Comparable sales saw a 1% increase, driven by increased shopping frequency.
- 3Membership fee revenue grew by 6%, reflecting strong member loyalty and program uptake.
- 4Net income rose by 14% to $545 million, with diluted EPS of $1.24.
- 5Gross margin percentage improved by 29 basis points, aided by a non-recurring legal settlement.
- 6The company opened eight net new warehouses during the quarter, continuing its global expansion.
- 7Costco declared a quarterly cash dividend of $0.45 per share.