Summary
Costco Wholesale Corporation (COST) reported solid financial results for the third quarter and the first 36 weeks of fiscal year 2018, demonstrating continued growth and operational efficiency. Net sales saw a significant increase of 12% year-over-year for both periods, driven by strong comparable sales growth of 10% and contributions from new warehouse openings. Membership fee revenue also grew robustly by 14% in the quarter, supported by fee increases and member sign-ups. Despite a decrease in gross margin percentage, primarily due to the impact of gasoline price inflation and a shift towards lower-margin ancillary businesses, the company effectively managed operating expenses. Selling, general, and administrative (SG&A) expenses as a percentage of net sales decreased, showcasing efficient cost control. Net income attributable to Costco increased by 7% for the quarter, reflecting these positive operational trends. The company also continues to invest in growth, with significant capital expenditures for new warehouses, and maintains a strong liquidity position with substantial cash and cash equivalents.
Financial Highlights
49 data points| Revenue | $32.36B |
| Cost of Revenue | $28.13B |
| Gross Profit | $4.23B |
| SG&A Expenses | $3.15B |
| Operating Income | $1.07B |
| Interest Expense | $37.00M |
| Net Income | $750.00M |
| EPS (Basic) | $1.71 |
| EPS (Diluted) | $1.70 |
| Shares Outstanding (Basic) | 438.74M |
| Shares Outstanding (Diluted) | 441.71M |
Key Highlights
- 1Net sales increased by 12% to $31.624 billion for the 12 weeks ended May 13, 2018, and by 12% to $95.020 billion for the 36 weeks ended May 13, 2018, driven by comparable sales growth and new warehouse openings.
- 2Comparable sales grew by 10% for both the 12-week and 36-week periods, indicating strong performance in existing warehouses.
- 3Membership fee revenue increased by 14% for the 12 weeks ended May 13, 2018, to $737 million, benefiting from a recent fee increase and membership growth.
- 4Net income attributable to Costco rose by 7% to $750 million for the 12 weeks ended May 13, 2018, translating to diluted EPS of $1.70.
- 5Gross margin percentage decreased by 46 basis points in the quarter, largely attributed to the impact of gasoline price inflation and a shift in sales mix towards lower-margin ancillary businesses.
- 6Selling, General & Administrative (SG&A) expenses as a percentage of net sales decreased by 32 basis points in the quarter, demonstrating effective cost management.
- 7The company declared a quarterly cash dividend of $0.57 per share, an increase from $0.50 per share in the prior year's quarter.