12 Weeks 24 Weeks
---------- ----------
US 5% 5%
International 17% 17%
Total Company 7% 7%
========== ==========
The U.S. comparable sales figure includes, among other things, the effect
of recent gasoline price inflation, with the average sales price per gallon
of gasoline up 29% year-over-year for the quarter. Excluding this, U.S.
comparable sales in the second quarter would have been 3%. In addition,
significantly stronger foreign exchange rates, primarily in Canada,
positively impacted the second quarter's international comparable sales
results. On a local currency basis, international comparable sales
increased 6% in the second quarter.
Net income for the second quarter of fiscal 2008 was $327.9 million, or
$.74 per diluted share, compared to $249.5 million, or $.54 per diluted
share, during the second quarter of fiscal 2007. As previously reported,
included in last year's second quarter results were three non-recurring
items. Excluding these items, which combined to an $84.4 million pre-tax
charge ($53.4 million after-tax), second quarter fiscal 2007 net income
would have been $302.9 million, or $.66 per diluted share.
Net income for the first half of fiscal 2008 was $589.8 million, or $1.33
per diluted share, compared to net income for the first half of fiscal 2007
of $486.4 million, or $1.05 per diluted share. Excluding the three
non-recurring items, outlined above, net income for the first half of
fiscal 2007 would have been $539.5 million or $1.16 per diluted share.
The Company today also reported net sales of $5.11 billion for the four
weeks ended March 2, 2008, an increase of 11% from $4.59 billion in the
same four-week period of the prior fiscal year. For the six-month retail
reporting period of September through February, the twenty-six weeks ended
March 2, 2008, which includes the first two weeks of the Company's fiscal
third quarter, the Company reported net sales of $34.77 billion, an
increase of 12% from $31.03 billion during the comparable period of the
prior fiscal year.
Comparable sales for the 4-week retail-reporting month of February and the
26-week retail-reporting period of September through February are as
follows:
4 Weeks 26 Weeks
---------- ----------
US 5% 5%
International 18% 17%
Total Company 7% 8%
========== ==========
The U.S. comparable sales figure includes, among other things, the effect
of gasoline price inflation, with the average sales price per gallon of
gasoline up 25% for the four-week month of February, as compared to the
year-earlier February. Excluding gasoline price inflation, U.S. comparable
sales would have been up 3%. In addition, foreign exchange rates,
primarily in Canada, positively impacted international comparable sales
results. On a local currency basis, international comparable sales
increased 6% in February.
Costco currently operates 534 warehouses, including 391 in the United
States and Puerto Rico, 75 in Canada, 19 in the United Kingdom, six in
Korea, five in Taiwan, seven in Japan and 31 in Mexico. The Company also
operates Costco Online, an electronic commerce web site, at www.costco.com
and at www.costco.ca in Canada. The Company plans to open an additional 16
to 18 new warehouses (including the relocation of four to five warehouses
to larger and better-located facilities) prior to the end of its 2008
fiscal year on August 31, 2008.
A conference call to discuss these second quarter results is scheduled for
8:00 a.m. (PT) today, March 5, 2008, and is available via a webcast on
www.costco.com (click on Investor Relations and "Webcasts").
Certain statements contained in this document constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. For these purposes, forward-looking statements are statements
that address activities, events, conditions or developments that the
Company expects or anticipates may occur in the future. Such
forward-looking statements involve risks and uncertainties that may cause
actual events, results or performance to differ materially from those
indicated by such statements. These risks and uncertainties include, but
are not limited to, domestic and international economic conditions
including exchange rates, the effects of competition and regulation,
consumer and small business spending patterns and debt levels, conditions
affecting the acquisition, development, ownership or use of real estate,
actions of vendors, rising costs associated with employees (including
health care and workers' compensation costs), rising costs associated with
the acquisition of merchandise (including the direct and indirect effects
of the rising cost of petroleum-based products and fuel and energy costs),
geopolitical conditions and other risks identified from time to time in the
Company's public statements and reports filed with the Securities and
Exchange Commission.
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(unaudited)
12 Weeks Ended 24 Weeks Ended
-------------------------- --------------------------
February 17, February 18, February 17, February 18,
2008 2007 2008 2007
------------ ------------ ------------ ------------
REVENUE
Net sales $ 16,616,962 $ 14,804,696 $ 32,088,462 $ 28,657,017
Membership fees 342,924 307,320 680,954 606,623
------------ ------------ ------------ ------------
Total revenue 16,959,886 15,112,016 32,769,416 29,263,640
OPERATING EXPENSES
Merchandise costs 14,833,189 13,251,752 28,656,700 25,640,710
Selling, general
and
administrative 1,615,531 1,487,991 3,185,125 2,870,458
Preopening
expenses 9,699 7,486 31,191 30,213
Provision for
impaired assets
and closing
costs, net (2,865) 3,459 (2,786) 7,791
------------ ------------ ------------ ------------
Operating
income 504,332 361,328 899,186 714,468
OTHER INCOME
(EXPENSE)
Interest expense (23,471) (3,620) (46,439) (5,760)
Interest income
and other 40,604 36,526 73,881 63,637
------------ ------------ ------------ ------------
INCOME BEFORE
INCOME TAXES 521,465 394,234 926,628 772,345
Provision for
income taxes 193,615 144,756 336,797 285,981
------------ ------------ ------------ ------------
NET INCOME $ 327,850 $ 249,478 $ 589,831 $ 486,364
============ ============ ============ ============
NET INCOME PER
COMMON SHARE:
Basic $ 0.75 $ 0.55 $ 1.36 $ 1.07
============ ============ ============ ============
Diluted $ 0.74 $ 0.54 $ 1.33 $ 1.05
============ ============ ============ ============
Shares used in
calculation
(000's)
Basic 434,779 450,901 434,934 454,884
Diluted 444,925 461,575 445,148 465,149
Dividends per share $ 0.145 $ 0.13 $ 0.29 $ 0.26
Contact Information: CONTACTS: Costco Wholesale Corporation Richard Galanti, 425/313-8203 Bob Nelson, 425/313-8255 Jeff Elliott, 425/313-8264