Costco's fiscal Q1 earnings rose to US$416M from US$320M a year ago as revenue grew 10% to US$23.2B, comparable-warehouse sales rose 7%

Cindy Allen

ISSAQUAH, Washington , December 12, 2012 (press release) – Costco Wholesale Corporation ("Costco" or the "Company") ( NASDAQ : COST ) announced today its operating results for the first quarter (twelve weeks) of fiscal 2013, ended November 25, 2012. Net sales for the quarter increased ten percent, to $23.20 billion from $21.18 billion during the first quarter last year. Comparable sales for the first quarter of fiscal 2013 were as follows:


		12 Weeks

U.S.		7%
International		9%

Total Company		7%

Inflation in gasoline prices and strengthening foreign currencies had a positive impact on comparable sales. Excluding these effects, comparable sales were as follows:


		12 Weeks

U.S.		6%
International		7%

Total Company		6%

Net income for the quarter was $416 million, or $.95 per diluted share, compared to $320 million, or $.73 per diluted share, last year. Last year's net income was negatively impacted by a $12 million charge (or $.03 per diluted share) related to settlement of an income tax audit of the Company's Mexico operation, and a $17 million charge (or $.04 per diluted share) related to contributions to an initiative reforming alcoholic beverage laws in Washington State.

Costco currently operates 621 warehouses, including 448 in the United States and Puerto Rico, 85 in Canada, 32 in Mexico, 23 in the United Kingdom, 13 in Japan, nine in Taiwan, eight in Korea, and three in Australia. The Company plans to open one additional new warehouse (Gwangmyeong, Korea) before the end of calendar year 2012. The Company also operates Costco Online, electronic commerce web sites, at www.costco.com (U.S.), www.costco.ca (CN), and www.costco.co.uk (United Kingdom).

A conference call to discuss these fiscal 2013 first quarter operating results is scheduled for 7:00 a.m. (PT) today, December 12, 2012, 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. 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, conditions affecting the acquisition, development, ownership or use of real estate, actions of vendors, rising costs associated with employees (including health care costs), energy, and certain commodities, 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
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)

			12 Weeks Ended
			November 25, 2012			November 20, 2011
REVENUE
	Net sales		$	23,204		$	21,181
	Membership fees			511			447
		Total revenue		23,715			21,628
OPERATING EXPENSES
	Merchandise costs			20,726			18,931
	Selling, general and administrative			2,332			2,144
	Preopening expenses			18			10
		Operating income		639			543
OTHER INCOME (EXPENSE)
	Interest expense			(13	)		(27	)
	Interest income and other, net			20			37
INCOME BEFORE INCOME TAXES				646			553
	Provision for income taxes			225			225
Net income including noncontrolling interests				421			328
Net income attributable to noncontrolling interests				(5	)		(8	)
NET INCOME ATTRIBUTABLE TO COSTCO			$	416		$	320

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
	Basic		$	0.96		$	0.74
	Diluted		$	0.95		$	0.73

Shares used in calculation (000's)
	Basic			433,423			434,222
	Diluted			438,643			440,615

CASH DIVIDENDS DECLARED PER COMMON SHARE			$	0.275		$	0.240

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)

Subject to Reclassifications

		November 25, 2012		September 2, 2012
ASSETS
Cash and cash equivalents		$	3,897	$	3,528
Short-term investments			1,679		1,326
Receivables, net			1,175		1,026
Merchandise inventories			8,152		7,096
Deferred income taxes and other current assets			502		550
	Total current assets		15,405		13,526
Property and equipment, net			13,251		12,961
Other assets			667		653
TOTAL ASSETS		$	29,323	$	27,140

LIABILITIES AND EQUITY
Accounts payable		$	8,825	$	7,303
Accrued salaries and benefits			1,945		1,832
Other current liabilities			2,196		2,024
Deferred membership fees			1,169		1,101
	Total current liabilities		14,135		12,260
Long-term debt, excluding current portion			1,366		1,381
Deferred income taxes and other liabilities			990		981
	Total liabilities		16,491		14,622
Total Costco stockholders' equity			12,665		12,361
Noncontrolling interests			167		157
	Total equity		12,832		12,518
TOTAL LIABILITIES AND EQUITY		$	29,323	$	27,140

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