Costco Wholesale 8K Reports Fourth Quarter and Fiscal | COST 24 Sep 20

Exhibit 99.1

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COSTCO WHOLESALE CORPORATION REPORTS FOURTH QUARTER AND FISCAL

YEAR 2020 OPERATING RESULTS

ISSAQUAH, Wash., September 24, 2020 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended August 30, 2020.

Net sales for the quarter increased 12.5 percent, to $52.28 billion from $46.45 billion last year. Net sales for the fiscal year increased 9.3 percent, to $163.22 billion from $149.35 billion last year.

Comparable sales for the fourth quarter and the fiscal year were as follows:


	16 Weeks	16 Weeks	52 Weeks	52 Weeks
		Adjusted*		Adjusted*
U.S.	11.0%	13.6%	8.1%	9.2%
Canada	9.1%	12.6%	5.0%	7.4%
Other International	16.1%	18.8%	8.9%	11.2%

Total Company	11.4%	14.1%	7.7%	9.2%


E-commerce	90.6%	91.3%	49.5%	50.1%

*Excluding the impacts from changes in gasoline prices and foreign exchange.

Net income for the fourth quarter was $1.389 billion, or $3.13 per diluted share, compared to $1.097 billion, or $2.47 per diluted share last year. This year’s fourth quarter was negatively impacted by incremental expense related to COVID-19 premium wages and sanitation costs of $281 million pretax ($0.47 per diluted share) and a $36 million pretax charge ($0.06 per diluted share) related to the prepayment of $1.5 billion of debt. These items were partially offset by an $84 million pretax benefit ($0.15 per diluted share) for the partial reversal of a reserve of $123 million pretax ($0.22 cents per diluted share), related to a product tax assessment taken in the fourth quarter of last year.

Net income for the fiscal year was $4.00 billion, or $9.02 per diluted share, compared to $3.66 billion, or $8.26 per diluted share in the prior year.

Costco currently operates 795 warehouses, including 552 in the United States and Puerto Rico, 101 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, September 24, 2020, and is available via a webcast on www.costco.com (click on Investor Relations and “Play Webcast”).

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. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those

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terms. 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, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health-care costs), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, COVID-19 related factors and challenges, including among others, the duration of the pandemic, the unknown long-term economic impacts, reduced customer shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforce due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Company does not undertake to update these statements, except as required by law.


CONTACTS:		Costco Wholesale Corporation
		Richard Galanti, 425/313-8203
		Bob Nelson, 425/313-8255
		David Sherwood, 425/313-8239
		Josh Dahmen, 425/313-8254

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COSTCO WHOLESALE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)


	16 Weeks Ended						52 Weeks Ended
	August 30, 2020			September 1, 2019			August 30, 2020			September 1, 2019
REVENUE
Net sales	$	52,277		$	46,448		$	163,220		$	149,351
Membership fees		1,106			1,050			3,541			3,352

Total revenue		53,383			47,498			166,761			152,703
OPERATING EXPENSES
Merchandise costs		46,401			41,310			144,939			132,886
Selling, general and administrative		5,027			4,684			16,332			14,994
Preopening expenses		26			41			55			86

Operating income		1,929			1,463			5,435			4,737
OTHER INCOME (EXPENSE)
Interest expense		(51	)		(45	)		(160	)		(150	)
Interest income and other, net		(9	)		74			92			178

INCOME BEFORE INCOME TAXES		1,869			1,492			5,367			4,765
Provision for income taxes		465			382			1,308			1,061

Net income including noncontrolling interests		1,404			1,110			4,059			3,704
Net income attributable to noncontrolling interests		(15	)		(13	)		(57	)		(45	)

NET INCOME ATTRIBUTABLE TO COSTCO	$	1,389		$	1,097		$	4,002		$	3,659


NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic	$	3.14		$	2.49		$	9.05		$	8.32

Diluted	$	3.13		$	2.47		$	9.02		$	8.26


Shares used in calculation (000’s):
Basic		442,843			439,727			442,297			439,755
Diluted		444,231			443,400			443,901			442,923

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COSTCO WHOLESALE CORPORATION

CONSOLIDATED BALANCE SHEETS

(amounts in millions, except par value and share data)

(unaudited)

Subject to Reclassification


	August 30, 2020			September 1, 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	12,277		$	8,384
Short-term investments		1,028			1,060
Receivables, net		1,550			1,535
Merchandise inventories		12,242			11,395
Other current assets		1,023			1,111

Total current assets		28,120			23,485
OTHER ASSETS
Property and equipment, net		21,807			20,890
Operating lease right-of-use assets		2,788			—
Other long-term assets		2,841			1,025

TOTAL ASSETS	$	55,556		$	45,400

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	14,172		$	11,679
Accrued salaries and benefits		3,605			3,176
Accrued member rewards		1,393			1,180
Deferred membership fees		1,851			1,711
Current portion of long-term debt		95			1,699
Other current liabilities		3,728			3,792

Total current liabilities		24,844			23,237
OTHER LIABILITIES
Long-term debt, excluding current portion		7,514			5,124
Long-term operating lease liabilities		2,558			—
Other long-term liabilities		1,935			1,455

TOTAL LIABILITIES		36,851			29,816

COMMITMENTS AND CONTINGENCIES EQUITY
Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock $0.01 par value; 900,000,000 shares authorized; 441,255,000 and 439,625,000 shares issued and outstanding		4			4
Additional paid-in capital		6,698			6,417
Accumulated other comprehensive loss		(1,297	)		(1,436	)
Retained earnings		12,879			10,258

Total Costco stockholders’ equity		18,284			15,243
Noncontrolling interests		421			341

Total equity		18,705			15,584

TOTAL LIABILITIES AND EQUITY	$	55,556		$	45,400

Costco Wholesale (COST) 8-KCostco Wholesale Corporation Reports Fourth Quarter and Fiscal