10-QPeriod: Q2 FY2023

COSTCO WHOLESALE CORP /NEW Quarterly Report for Q2 Ended Feb 12, 2023

Filed March 9, 2023For Securities:COST

Summary

Costco Wholesale Corporation (COST) reported its results for the 12 and 24 weeks ended February 12, 2023. For the twelve-week period, total revenue increased to $55.3 billion, up 6.6% year-over-year, with net sales growing to $54.2 billion. Diluted earnings per share (EPS) for the quarter reached $3.30, a notable increase from $2.92 in the prior year's comparable period. The company demonstrated continued strength in its membership model, with membership fee revenue rising 6% to $1.03 billion. Looking at the first half of the fiscal year, total revenue grew by 7.3% to $109.7 billion, and net sales reached $107.7 billion. Diluted EPS for the 24-week period was $6.37, up from $5.90 in the previous year. The company maintained healthy operating income growth and a strong balance sheet, with total assets increasing to $66.8 billion. Key drivers for the quarter included comparable sales growth of 5% and the opening of new warehouses, offsetting some of the negative impacts from foreign currency fluctuations.

Financial Highlights

50 data points
Beta

Revenue

$55.27B

12.4% Gross Margin

Net Income

$1.47B

2.7% Net Margin

EPS (Diluted)

$3.30

Total Assets

$66.85B

Cash & Equivalents

$12.97B

Free Cash Flow

$2.30B

Financial Statements
Beta
Revenue$55.27B
Cost of Revenue$48.42B
Gross Profit$6.84B
SG&A Expenses$4.94B
Operating Income$1.90B
Interest Expense$34.00M
Net Income$1.47B
EPS (Basic)$3.30
EPS (Diluted)$3.30
Shares Outstanding (Basic)443.88M
Shares Outstanding (Diluted)444.48M

Key Highlights

  • 1Net sales for the 12 weeks ended February 12, 2023, rose 6% to $54.2 billion, compared to $50.9 billion in the prior year period.
  • 2Diluted earnings per share (EPS) for the quarter was $3.30, an increase from $2.92 in the same period last year.
  • 3Membership fee revenue increased 6% to $1.03 billion for the quarter, reflecting growth in member sign-ups and a higher renewal rate.
  • 4Comparable sales increased by 5% for the 12-week period, indicating continued customer traffic and spending.
  • 5Gross margin percentage improved slightly to 10.72% from 10.64% in the prior year's comparable quarter, aided by a LIFO charge in the previous year.
  • 6The company repurchased $284 million of common stock during the first half of fiscal 2023 and declared a quarterly cash dividend of $0.90 per share.
  • 7Total assets grew to $66.8 billion as of February 12, 2023, from $64.2 billion at the end of fiscal 2022, indicating a solid financial position.

Frequently Asked Questions

Costco reported a 6% increase in net sales for the 12 weeks ended February 12, 2023, reaching $54.2 billion, up from $50.9 billion in the prior year. For the first half of the fiscal year, net sales increased by 7% to $107.7 billion.

Profitability showed improvement, with diluted earnings per share (EPS) for the 12-week quarter at $3.30, up from $2.92 in the same period last year. For the first half of the fiscal year, diluted EPS was $6.37, compared to $5.90 in the prior year.

The membership segment remains a strong contributor. Membership fee revenue increased by 6% to $1.03 billion for the quarter, driven by new member sign-ups, upgrades to Executive Membership, and a high renewal rate of 92.6% in the U.S. and Canada.

Costco continues to return capital to shareholders. The company declared a quarterly cash dividend of $0.90 per share and repurchased $284 million of common stock in the first half of fiscal 2023. A new share repurchase program of $4 billion was authorized in January 2023, expiring in January 2027.