COST Costco Wholesale Corporation

Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2024, ended November 26, 2023.

For the first quarter the Company reported net sales of $56.72 billion, an increase of 6.1 percent from $53.44 billion for the first quarter of fiscal year 2023, ended November 20, 2022.

Net sales were benefited by approximately one-half to one percent in the U.S. and worldwide from the shift of the fiscal calendar, as a result of the fifty-third week in fiscal year 2023.

The following comparable sales reflect comparable locations year-over-year and comparable retail weeks.

Comparable sales for the twelve weeks ended November 26, 2023 were as follows:

		12 Weeks			12 Weeks
					Adjusted*
	U.S.	2.0%			2.6%
	Canada	6.4%			8.2%
	Other International	11.2%			7.1%
	Total Company	3.8%			3.9%
	E-commerce	6.3%			6.1%

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

Net income for the quarter was $1,589 million, $3.58 per diluted share, compared to $1,364 million, $3.07 per diluted share, last year. This year’s results included a tax benefit of $44 million, $0.10 per diluted share, related to stock-based compensation. Last year’s results included a charge of $93 million pre-tax, $0.15 per diluted share, primarily related to downsizing our charter shipping activities, and a tax benefit of $53 million, $0.12 per diluted share, related to stock-based compensation.

The Company also announced that the Board of Directors has declared a special cash dividend on Costco common stock of $15 per share, payable January 12, 2024, to shareholders of record as of the close of business on December 28, 2023. The aggregate amount of the payment will be approximately $6.7 billion.

Costco currently operates 871 warehouses, including 600 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 33 in Japan, 29 in the United Kingdom, 18 in Korea, 15 in Australia, 14 in Taiwan, five in China, four in Spain, two in France, and one each in Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, December 14, 2023, and will be available via a webcast on investor.costco.com (click “Events & Presentations”).

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 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, inflation or deflation, 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 and the Ukraine conflict), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, 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. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with GAAP.

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

COST-Earn

COST-Comp

	CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (dollars in millions, except per share data) (unaudited)
		12 Weeks Ended
		November 26, 2023				November 20, 2022
	REVENUE
	Net sales	$	56,717			$	53,437
	Membership fees		1,082				1,000
	Total revenue		57,799				54,437
	OPERATING EXPENSES
	Merchandise costs		50,457				47,769
	Selling, general and administrative		5,358				4,917
	Operating income		1,984				1,751
	OTHER INCOME (EXPENSE)
	Interest expense		(38	)			(34	)
	Interest income and other, net		160				53
	INCOME BEFORE INCOME TAXES		2,106				1,770
	Provision for income taxes		517				406
	NET INCOME	$	1,589			$	1,364
	NET INCOME PER COMMON SHARE:
	Basic	$	3.58			$	3.07
	Diluted	$	3.58			$	3.07
	Shares used in calculation (000s):
	Basic		443,827				443,837
	Diluted		444,403				444,531

	COSTCO WHOLESALE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in millions, except par value and share data) (unaudited)
	Subject to Reclassification
		November 26, 2023				September 3, 2023
	ASSETS
	CURRENT ASSETS
	Cash and cash equivalents	$	17,011			$	13,700
	Short-term investments		853				1,534
	Receivables, net		2,542				2,285
	Merchandise inventories		18,001				16,651
	Other current assets		1,673				1,709
	Total current assets		40,080				35,879
	OTHER ASSETS
	Property and equipment, net		27,168				26,684
	Operating lease right-of-use assets		2,672				2,713
	Other long-term assets		3,803				3,718
	TOTAL ASSETS	$	73,723			$	68,994
	LIABILITIES AND EQUITY
	CURRENT LIABILITIES
	Accounts payable	$	20,357			$	17,483
	Accrued salaries and benefits		4,474				4,278
	Accrued member rewards		2,207				2,150
	Deferred membership fees		2,462				2,337
	Current portion of long-term debt		1,080				1,081
	Other current liabilities		6,188				6,254
	Total current liabilities		36,768				33,583
	OTHER LIABILITIES
	Long-term debt, excluding current portion		5,866				5,377
	Long-term operating lease liabilities		2,401				2,426
	Other long-term liabilities		2,541				2,550
	TOTAL LIABILITIES		47,576				43,936
	COMMITMENTS AND CONTINGENCIES
	EQUITY
	Preferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding		—				—
	Common stock $0.005 par value; 900,000,000 shares authorized; 443,787,000 and 442,793,000 shares issued and outstanding		2				2
	Additional paid-in capital		7,489				7,340
	Accumulated other comprehensive loss		(1,843	)			(1,805	)
	Retained earnings		20,499				19,521
	TOTAL EQUITY		26,147				25,058
	TOTAL LIABILITIES AND EQUITY	$	73,723			$	68,994

	COSTCO WHOLESALE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in millions) (unaudited)
	Subject to Reclassification
		12 Weeks Ended
		November 26, 2023				November 20, 2022
	CASH FLOWS FROM OPERATING ACTIVITIES
	Net income	$	1,589			$	1,364
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		501				447
	Non-cash lease expense		74				111
	Stock-based compensation		444				402
	Impairment of assets and other non-cash operating activities, net		43				121
	Changes in working capital		2,000				165
	Net cash provided by operating activities		4,651				2,610
	CASH FLOWS FROM INVESTING ACTIVITIES
	Purchases of short-term investments		(200	)			(253	)
	Maturities and sales of short-term investments		878				274
	Additions to property and equipment		(1,040	)			(1,057	)
	Other investing activities, net		(4	)			(21	)
	Net cash used in investing activities		(366	)			(1,057	)
	CASH FLOWS FROM FINANCING ACTIVITIES
	Repayments of short-term borrowings		(173	)			(77	)
	Proceeds from short-term borrowings		144				29
	Proceeds from issuance of long-term debt		498				—
	Tax withholdings on stock-based awards		(292	)			(301	)
	Repurchases of common stock		(162	)			(141	)
	Cash dividend payments		(905	)			(400	)
	Financing lease payments		(82	)			(60	)
	Other financing activities, net		(2	)			87
	Net cash used in financing activities		(974	)			(863	)
	EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		—				(37	)
	Net change in cash and cash equivalents		3,311				653
	CASH AND CASH EQUIVALENTS BEGINNING OF YEAR		13,700				10,203
	CASH AND CASH EQUIVALENTS END OF YEAR	$	17,011			$	10,856