Summary
Costco Wholesale Corporation (COST) reported strong financial results for the 12-week period ended February 14, 2021, and the 24-week period ended February 14, 2021. Net sales saw a significant increase of 15% in the second quarter and 16% in the first half of fiscal year 2021 compared to the prior year, driven by a robust 13% comparable sales increase in the quarter and 14% in the half, supplemented by sales from new warehouse openings. Membership fees also grew, reflecting increased member sign-ups and upgrades to Executive Memberships. The company demonstrated resilience and adaptability amidst the ongoing COVID-19 pandemic, with strong performance in core merchandise and e-commerce segments, while certain ancillary businesses like gasoline and travel experienced declines. Despite incremental wage costs and increased Executive Member reward spending impacting gross margin, Costco managed to increase net income and diluted earnings per share, indicating effective cost management and operational efficiency. The company also continued its capital allocation strategies, including share repurchases and dividend payments, underscoring a commitment to shareholder returns.
Financial Highlights
50 data points| Revenue | $44.77B |
| Cost of Revenue | $39.08B |
| Gross Profit | $5.69B |
| SG&A Expenses | $4.35B |
| Operating Income | $1.34B |
| Interest Expense | $40.00M |
| Net Income | $951.00M |
| EPS (Basic) | $2.15 |
| EPS (Diluted) | $2.14 |
| Shares Outstanding (Basic) | 443.13M |
| Shares Outstanding (Diluted) | 444.49M |
Key Highlights
- 1Net sales increased by 15% to $43.9 billion for the 12-week period ended February 14, 2021, driven by a 13% comparable sales increase.
- 2Membership fee revenue grew by 8% to $881 million in the second quarter, attributed to new sign-ups and Executive Membership upgrades.
- 3Net income for the quarter was $951 million, resulting in diluted earnings per share of $2.14, an increase from $2.10 in the prior year.
- 4The company experienced strong growth in e-commerce comparable sales, up 76% in the second quarter.
- 5Costco continued to return capital to shareholders, with a quarterly dividend of $0.70 per share and a special cash dividend of $10.00 per share paid during the reporting period.
- 6Incremental COVID-19 related wage costs of $246 million impacted the second quarter's profitability, with total incremental costs for the first half reaching $458 million.
- 7Inventory levels increased by $1.6 billion (13.8%) to $13.9 billion, suggesting preparation for continued demand or potential supply chain considerations.