Summary
Costco Wholesale Corporation's (COST) Q3 2017 filing for the period ending May 6, 2017, demonstrates robust financial performance with notable increases in net sales and net income. Total revenue grew to $28.86 billion for the quarter, an 8% increase year-over-year, driven by a 5% rise in comparable sales and contributions from new warehouse openings. Net income saw a significant jump of 28% to $700 million, or $1.59 per diluted share, up from $545 million, or $1.24 per diluted share in the prior year's quarter. This strong profitability was partly aided by a $82 million tax benefit related to a special dividend distribution to employee 401(k) plan participants. The company also highlighted strategic financial maneuvers, including the payoff of $1.1 billion in 5.5% Senior Notes in March 2017 and a significant $3.8 billion issuance of Senior Notes in May 2017, which was used to fund a substantial special cash dividend of $7.00 per share, alongside the regular quarterly dividend of $0.50 per share. These actions reflect a dynamic approach to capital management while maintaining strong operational performance.
Financial Highlights
49 data points| Revenue | $28.86B |
| Cost of Revenue | $24.97B |
| Gross Profit | $3.89B |
| SG&A Expenses | $2.91B |
| Operating Income | $968.00M |
| Interest Expense | $21.00M |
| Net Income | $700.00M |
| EPS (Basic) | $1.59 |
| EPS (Diluted) | $1.59 |
| Shares Outstanding (Basic) | 438.82M |
| Shares Outstanding (Diluted) | 441.06M |
Key Highlights
- 1Net sales for the third quarter of fiscal 2017 increased by 8% to $28.2 billion, driven by a 5% comparable sales increase and new warehouse openings.
- 2Net income surged by 28% to $700 million ($1.59 per diluted share) from $545 million ($1.24 per diluted share) in the same quarter last year, boosted by a tax benefit.
- 3Membership fee revenue grew by 4% to $644 million, reflecting membership growth and increased Executive Membership penetration.
- 4Gross margin percentage improved by 8 basis points year-over-year, with core merchandise categories showing a 12 basis point increase.
- 5Selling, General, and Administrative (SG&A) expenses as a percentage of net sales decreased by 14 basis points, partly due to higher gasoline prices.
- 6The company paid off $1.1 billion in 5.5% Senior Notes and subsequently issued $3.8 billion in new Senior Notes.
- 7A significant special cash dividend of $7.00 per share was declared and paid, alongside a regular quarterly dividend of $0.50 per share.