Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2024 Operating Results

Rhea-AI Summary

Costco Wholesale (Nasdaq: COST) reported its operating results for the 16-week fourth quarter and the 52-week fiscal year ended September 1, 2024. Fourth-quarter net sales were $78.2 billion, a 1.0% increase from $77.4 billion in the 17-week fourth quarter of 2023. Fiscal year net sales reached $249.6 billion, up 5.0% from $237.7 billion in the 53-week fiscal year 2023. Comparable sales for the 16 weeks were up 5.4% (U.S. 5.3%, Canada 5.5%, International 5.7%, E-commerce 18.9%). Net income for the fourth quarter was $2.354 billion, $5.29 per diluted share, compared to $2.160 billion, $4.86 per diluted share, in the 17-week fourth quarter last year. Fiscal year net income was $7.367 billion, $16.56 per diluted share, compared to $6.292 billion, $14.16 per diluted share, in the prior year. The results included a $63 million net non-recurring tax benefit. Costco operates 891 warehouses globally and e-commerce sites in multiple countries.

Positive

• Net sales increased by 5.0% year-over-year to $249.6 billion.
• Comparable sales increased by 5.4% for the fourth quarter and 5.3% for the fiscal year.
• E-commerce sales surged 18.9% in the fourth quarter.
• Net income for the fiscal year rose to $7.367 billion, up from $6.292 billion.

Negative

• Fourth-quarter sales growth was modest at 1.0%.

Insights

Financial Analyst

Costco's Q4 and FY2024 results demonstrate resilient performance in a challenging retail environment. Key highlights include:

• Q4 net sales of $78.2 billion, up 1.0% year-over-year
• FY2024 net sales of $249.6 billion, a 5.0% increase
• Q4 net income of $2.354 billion ($5.29 per diluted share), up from $2.160 billion ($4.86 per share) last year
• FY2024 net income of $7.367 billion ($16.56 per diluted share), compared to $6.292 billion ($14.16 per share) in FY2023

The company's strong comparable sales growth, particularly in e-commerce (18.9% in Q4), indicates successful adaptation to changing consumer behaviors. The international segment's robust performance suggests potential for further global expansion. The $63 million non-recurring tax benefit boosted EPS, but even excluding this, underlying profitability shows improvement. Costco's continued warehouse expansion, now at 891 locations, underscores its growth strategy and market penetration efforts.

Retail Industry Expert

Costco's performance reflects its strong position in the retail landscape. The company's ability to grow sales and earnings in a period marked by inflationary pressures and shifting consumer spending patterns is noteworthy. Several factors contribute to this success:

• Membership model: Provides stable revenue and customer loyalty
• Value proposition: Attractive to budget-conscious consumers during economic uncertainty
• E-commerce growth: Demonstrates successful omnichannel strategy
• International expansion: Diversifies revenue streams and taps into new markets

The 5.4% total company comparable sales growth (adjusted 6.9%) for Q4 outpaces many competitors, indicating market share gains. Costco's continued focus on opening new warehouses (now 891) shows confidence in its brick-and-mortar model while also investing in e-commerce. This balanced approach positions the company well for future growth and resilience against economic fluctuations.

ISSAQUAH, Wash., Sept. 26, 2024 (GLOBE NEWSWIRE) -- 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 September 1, 2024.

For the 16-week fourth quarter, the Company reported net sales of $78.2 billion, an increase of 1.0 percent compared to net sales of $77.4 billion in the 17-week fourth quarter of fiscal year 2023. For the 52-week fiscal year, the Company reported net sales of $249.6 billion, an increase of 5.0 percent from $237.7 billion reported in the 53-week fiscal year 2023.

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

Comparable sales were as follows:

	16 Weeks		16 Weeks		52 Weeks		52 Weeks
			Adjusted*				Adjusted*
U.S.	5.3%		6.3%		4.5%		5.0%
Canada	5.5%		7.9%		7.0%		8.1%
Other International	5.7%		9.3%		8.1%		8.4%
Total Company	5.4%		6.9%		5.3%		5.9%
E-commerce	18.9%		19.5%		16.1%		16.2%

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

Net income for the 16-week fourth quarter was $2.354 billion, $5.29 per diluted share, compared to $2.160 billion, $4.86 per diluted share, in the 17-week fourth quarter last year. This year’s results included a net non-recurring tax benefit of $63 million, $0.14 per diluted share, related to a transfer pricing settlement, and true-ups of tax reserves.

Net income for the 52-week fiscal year was $7.367 billion, $16.56 per diluted share, compared to $6.292 billion, $14.16 per diluted share, in the 53-week prior year.

Costco currently operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five 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, September 26, 2024, and will be available via a webcast on investor.costco.com (click “Events & Presentations”).

Certain statements contained in this document and the pre-recorded message 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 and wages), energy and certain commodities, geopolitical conditions (including tariffs), 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 U.S. GAAP.

CONTACTS:	Costco Wholesale Corporation
	David Sherwood, 425/313-8239
	Josh Dahmen, 425/313-8254
	Andrew Yoon, 425/313-6305

COST-Earn

COSTCO WHOLESALE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
 (dollars in millions, except per share data) (unaudited)

	16 Weeks Ended				17 Weeks Ended				52 Weeks Ended				53 Weeks Ended
	September 1, 2024				September 3, 2023				September 1, 2024				September 3, 2023
REVENUE
Net sales	$	78,185			$	77,430			$	249,625			$	237,710
Membership fees		1,512				1,509				4,828				4,580
Total revenue		79,697				78,939				254,453				242,290
OPERATING EXPENSES
Merchandise costs		69,588				69,219				222,358				212,586
Selling, general and administrative		7,067				6,939				22,810				21,590
Operating income		3,042				2,781				9,285				8,114
OTHER INCOME (EXPENSE)
Interest expense		(49	)			(56	)			(169	)			(160	)
Interest income and other, net		120				238				624				533
INCOME BEFORE INCOME TAXES		3,113				2,963				9,740				8,487
Provision for income taxes		759				803				2,373				2,195
NET INCOME	$	2,354			$	2,160			$	7,367			$	6,292
NET INCOME PER COMMON SHARE:
Basic	$	5.30			$	4.87			$	16.59			$	14.18
Diluted	$	5.29			$	4.86			$	16.56			$	14.16
Shares used in calculation (000’s):
Basic		444,013				443,876				443,914				443,854
Diluted		444,977				444,445				444,759				444,452

COSTCO WHOLESALE CORPORATION
CONSOLIDATED BALANCE SHEETS
 (amounts in millions, except par value and share data) (unaudited)

Subject to Reclassification

			September 1, 2024				September 3, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	9,906			$	13,700
Short-term investments				1,238				1,534
Receivables, net				2,721				2,285
Merchandise inventories				18,647				16,651
Other current assets				1,734				1,709
Total current assets				34,246				35,879
OTHER ASSETS
Property and equipment, net				29,032				26,684
Operating lease right-of-use assets				2,617				2,713
Other long-term assets				3,936				3,718
TOTAL ASSETS			$	69,831			$	68,994
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable			$	19,421			$	17,483
Accrued salaries and benefits				4,794				4,278
Accrued member rewards				2,435				2,150
Deferred membership fees				2,501				2,337
Current portion of long-term debt				103				1,081
Other current liabilities				6,210				6,254
Total current liabilities				35,464				33,583
OTHER LIABILITIES
Long-term debt, excluding current portion				5,794				5,377
Long-term operating lease liabilities				2,375				2,426
Other long-term liabilities				2,576				2,550
TOTAL LIABILITIES				46,209				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; 443,126,000 and 442,793,000 shares issued and outstanding				2				2
Additional paid-in capital				7,829				7,340
Accumulated other comprehensive loss				(1,828	)			(1,805	)
Retained earnings				17,619				19,521
TOTAL EQUITY				23,622				25,058
TOTAL LIABILITIES AND EQUITY			$	69,831			$	68,994

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (amounts in millions) (unaudited)

Subject to Reclassification

	52 Weeks Ended				53 Weeks Ended
	September 1, 2024				September 3, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	7,367			$	6,292
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,237				2,077
Non-cash lease expense		315				412
Stock-based compensation		818				774
Impairment of assets and other non-cash operating activities, net		(9	)			495
Changes in working capital		611				1,018
Net cash provided by operating activities		11,339				11,068
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of short-term investments		(1,470	)			(1,622	)
Maturities and sales of short-term investments		1,790				937
Additions to property and equipment		(4,710	)			(4,323	)
Other investing activities, net		(19	)			36
Net cash used in investing activities		(4,409	)			(4,972	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings		(920	)			(935	)
Proceeds from short-term borrowings		928				917
Repayments of long-term debt		(1,077	)			(75	)
Proceeds from issuance of long-term debt		498				—
Tax withholdings on stock-based awards		(315	)			(303	)
Repurchases of common stock		(700	)			(676	)
Cash dividend payments		(9,041	)			(1,251	)
Financing lease payments		(136	)			(291	)
Other financing activities, net		(1	)			—
Net cash used in financing activities		(10,764	)			(2,614	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		40				15
Net change in cash and cash equivalents		(3,794	)			3,497
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR		13,700				10,203
CASH AND CASH EQUIVALENTS END OF YEAR	$	9,906			$	13,700

FAQ

What were Costco's net sales for the fourth quarter of fiscal year 2024?

Costco's net sales for the fourth quarter of fiscal year 2024 were $78.2 billion.

How did Costco's net income perform in the fiscal year 2024?

Costco's net income for fiscal year 2024 was $7.367 billion, or $16.56 per diluted share.

What was the percentage increase in Costco's comparable sales for the fiscal year 2024?

Costco's comparable sales increased by 5.3% for the fiscal year 2024.

How much did Costco's e-commerce sales grow in the fourth quarter of fiscal year 2024?

Costco's e-commerce sales grew by 18.9% in the fourth quarter of fiscal year 2024.

What was the non-recurring tax benefit included in Costco's fourth-quarter results?

Costco's fourth-quarter results included a non-recurring tax benefit of $63 million.