Costco Wholesale Corporation Reports First Quarter Operating Results for Fiscal 2006.ISSAQUAH, Wash. -- Costco Costco Wholesale Corporation (NASDAQ: COST) is the largest membership warehouse club chain in the world based on sales volume, headquartered in Issaquah, Washington, United States,[1] with its flagship warehouse in nearby Seattle. Wholesale Corporation (Nasdaq: COST) announced today its operating results for the first quarter (12 weeks) of fiscal 2006, ended November 20, 2005. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first quarter of fiscal 2006 increased 12% to $12.66 billion from $11.34 billion during the first quarter of fiscal 2005. On a comparable warehouse basis, that is warehouses open at least one year, net sales increased 9%. Net income for the first quarter of fiscal 2006 increased 12% to $215.8 million, or $.45 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $193.2 million, or $.40 per diluted share, during the first quarter of fiscal 2005. This year's fiscal first quarter results included a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of approximately $7.6 million ($.01 per share) related to damage from hurricane Wilma Hurricane Wilma was the most intense hurricane ever recorded in the Atlantic basin. Exceeding the 21 storms of the 1933 season, Wilma was the twenty-second storm (including the subtropical storm discovered in reanalysis), thirteenth hurricane, sixth major hurricane, and fourth in Florida. Last year's fiscal first quarter results included a pretax charge of approximately $6.4 million ($.01 per share) related to damage from four Florida hurricanes The List of Florida hurricanes encompasses 470 tropical or subtropical cyclones that affected the state of Florida. More storms hit Florida than any other U.S. state, and since 1851 only eighteen hurricane seasons passed without a storm impacting the state. . Costco currently operates 471 warehouses, including 346 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , 66 in Canada, 17 in the United Kingdom, five in Korea, four in Taiwan, five in Japan and 28 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada. The Company plans to open an additional 18 to 20 new warehouses, including the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of two to three warehouses to larger and better-located facilities, prior to the end of its 53-week 2006 fiscal year ending on September 3, 2006. A conference call to discuss these first quarter results is scheduled for 8:00 a.m. (PT) today, December 8, 2005, and is available via a webcast on www.costco.com (click on Investor Relations Investor relations The process by which the corporation communicates with its investors. and "Webcasts"). Certain statements contained in this document constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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, 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 and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. costs), rising costs associated with the acquisition of merchandise (including the direct and indirect effects of the rising cost of petroleum-based products and fuel and energy costs), geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(unaudited)
12 Weeks Ended
---------------------------
November 20, November 21,
2005 2004
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REVENUE
Net sales................................ $ 12,664,799 $ 11,339,944
Membership fees.......................... 262,554 238,059
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Total revenue........................... 12,927,353 11,578,003
OPERATING EXPENSES
Merchandise costs........................ 11,330,171 10,132,487
Selling, general and administrative...... 1,258,099 1,131,686
Preopening expenses...................... 12,377 10,385
Provision for impaired assets and closing
costs, net.............................. 1,211 2,800
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Operating income........................ 325,495 300,645
OTHER INCOME (EXPENSE)
Interest expense......................... (3,724) (9,642)
Interest income and other................ 25,540 15,590
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INCOME BEFORE INCOME TAXES 347,311 306,593
Provision for income taxes............... 131,493 113,440
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NET INCOME................................ $ 215,818 $ 193,153
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NET INCOME PER COMMON SHARE:
Basic.................................... $ 0.46 $ 0.41
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Diluted.................................. $ 0.45 $ 0.40
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Shares used in calculation (000's)
Basic.................................... 472,717 465,869
Diluted.................................. 486,367 489,284
Dividends per share $ 0.115 $ 0.100
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