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ISSAQUAH, Wash. — Costco Wholesale Corp. reported fourth quarter results that beat analysts’ expectations.
Same-store sales for the 16-week quarter ended September 2 were up 10.8% in the United States and 9.5% for the company as a whole, compared to the same quarter last year. When the impacts of gasoline prices and foreign exchange rates are excluded, same-store sales were up 7.8% in the U.S. and 7.2% for the company. Net sales for the quarter were $43.4 billion, up 5% versus the year-ago quarter. Net sales for the 52-week fiscal year were $138.4 billion, up 9.7% compared to last year.
Comparable online sales increased 26.2% in the fourth quarter, which represents its slowest growth of the year. For the full fiscal year, the figure was 32.2%
Net income for the 16-week fourth quarter was $1.04 billion, or $2.36 per diluted share, compared to $919 million, or $2.08 per diluted share, in the 17-week fourth quarter last year.
Net income for the 52-week fiscal year was $3.13 billion, or $7.09 per diluted share, compared to $2.68 billion, or $6.08 per diluted share, in the 53-week prior year. The company notes that net income this year was positively impacted by a $41 million ($0.09 per diluted share) tax benefit in the first quarter, related to a change in accounting rules for stock-based compensation. Last year’s net income was positively impacted by an $82 million ($0.19 per diluted share) tax benefit in connection with the third-quarter special cash dividend and other net benefits of approximately $51 million ($0.07 per diluted share after tax) for nonrecurring legal and other matters.
Despite the strong results, the company’s shares fell about 3% in after hours trading.
Costco’s management did warn that it “expects to report a material weakness in internal control,” relating to the information technology systems that support its financial reporting systems. The company added that to date there have been no misstatements identified in its financial statements as a result of the problem, which it expects to fix by the end of fiscal year 2019.
Costco ended its 2018 fiscal year with 762 warehouse clubs in operation, including 527 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, one in France and one in Iceland. Costco also operates e-commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.
