Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 26, 2024

COSTCO WHOLESALE CORPORATION

(Exact name of registrant as specified in its charter)

Washington

0-20355

91-1223280

(State or other jurisdiction
of incorporation)

(Commission
File No.)

(I.R.S. Employer
Identification No.)

999 Lake Drive

Issaquah, WA 98027

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: 425-313-8100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.005 per share

COST

NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On September 26, 2024, the Company issued a press release containing its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended September 1, 2024. A copy of the press release is attached as Exhibit 99.1. In addition, a copy of the Company's earnings release supplement for the fourth quarter of fiscal 2024 is attached as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

99.1. Press release dated September 26, 2024.

99.2. Fourth quarter fiscal 2024 supplemental information.

104. Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	COSTCO WHOLESALE CORPORATION

Dated: September 26, 2024	By:	/s/ Gary Millerchip
		Gary Millerchip
		Executive Vice President and Chief Financial Officer

Exhibit 99.1

Press Release

COSTCO WHOLESALE CORPORATION REPORTS FOURTH QUARTER AND FISCAL

YEAR 2024 OPERATING RESULTS

ISSAQUAH, Wash., September 26, 2024 - 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

Press Release

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

Press Release

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

Press Release

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

Press Release

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

4th Quarter FY 2024 Supplemental Information 1 Exhibit 99.2

$78.2B Net Sales +1.0% Growth1 +5.4% Comparable Sales +6.9% Adjusted Comparable Sales2 +6.4% Comparable Traffic -0.9% Comparable Ticket +18.9% E-Comm Comparable Sales +19.5% Adjusted E-Comm Comparable Sales3 Q4 Highlights - Sales 1 - Last year’s results included 17 reporting weeks for the quarter. Normalizing for the additional week net sales growth was +7.3% 2 - Comparable Sales excluding impacts from gas inflation/deflation and FX 3 - E-commerce comparable Sales excluding impacts from FX Comp Sales US Canada Other International Total Company Sales +5.3% +5.5% +5.7% +5.4% Ticket -0.3% -2.1% -2.2% -0.9% Traffic +5.6% +7.7% +8.1% +6.4% 2

Q4 Highlights - Financial Performance Reported Ex Gas Reported Ex Gas Core -5bps -11bps Ops -4bps 0bps Other Bus +44bps +42bps Central -3bps -2bps 2% Reward -4bps -3bps Equity Comp 0bps 0bps LIFO +5bps +5bps Preopening -1bp 0bps Total +40bps +33bps Total -8bps -2bps Core on Core Sales: +9bps + = Favorable/lower, - = Unfavorable/higher Gross Margin 11.00% +40 bps vs. Q4 FY’23 +33 bps ex. gas impact SG&A 9.04% -8 bps vs. Q4 FY’23 -2 bps ex. gas impact Diluted EPS $5.29 +8.8% Growth* Net Income $2.35B +9.0% Growth* *- “Other” Items for the Quarter: - Last year's results included 17 weeks while this year’s quarter had 16 weeks. - This year’s results included a non-recurring tax benefit of $63M, or $0.14/diluted share. - Normalizing for both of the above items, net income and diluted EPS growth was 12.7% and 12.6%, respectively. 3

+6.5%* Membership Income Growth (Normalized) +7.4%* Membership Income Growth ex-FX (Norm.) 90.5% Worldwide Membership Renewal Rate 92.9% US/CN Renewal Rate 76.2MM Paid Memberships +7.3% Growth 136.8MM Total Cardholders +7.0% Growth 35.4MM Executive Memberships 73.5% Penetration of Sales to Executive Members Q4 Highlights - Membership 4 * - This year’s results included 16 weeks, compared to 17 weeks last year. These numbers are normalized to adjust for the extra week last year.

+18.9% E-Comm Comparable Sales 1 - E-commerce comparable Sales excluding impacts from FX +19.5% Adjusted E-Comm Comparable Sales1 Top Sales Categories: - Appliances - Gold / Silver Bullion - Home Furnishings - Gift Cards Digital Metrics (Normalized for 16-weeks): - New Mobile Application Downloads: +29% - Site Traffic: +8% - Average Order Value: +5% - Costco Logistics Deliveries: +17% Digital Enhancements: - Improved native search on US mobile app - US warehouse inventory lookup within the app Q4 Highlights - Digital 5

Q4 FY’23 End FY’24 Q1 - Q3 FY’24 Q4 FY’24 End FY’25 (E) US 591 13 10 614 630 Canada 107 1 - 108 111 Other International 163 1 4 168 175 Total 861 15 14 890 916 Q4 Highlights - Warehouse Expansion Cheongna, Korea: 8/22/24Nanjing, China: 5/28/24 6

Q4 Highlights - New Member Values KS Organic Golden Maple Syrup KS Take and Bake Pizza 7 Lowering Every Day Low Prices New Items KS Baguette 2pk 17% Reduction KS Cashews 4% Reduction KS All Butter Pound Cake KS Tempura Shrimp Taco Kit

Safe Harbor 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 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. 8

Cover	Sep. 26, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0000909832
Document Type	8-K
Document Period End Date	Sep. 26, 2024
Entity Incorporation, State or Country Code	WA
Entity File Number	0-20355
Entity Tax Identification Number	91-1223280
Entity Address, Address Line One	999 Lake Drive
Entity Address, City or Town	Issaquah
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98027
City Area Code	425
Local Phone Number	313-8100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $.005 per share
Trading Symbol	COST
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Registrant Name	COSTCO WHOLESALE CORP /NEW