Costco Wholesale Corporation (COST) Earnings Call Transcript & Summary

Hello. I'm David Sherwood, VP of Finance and Investor Relations, and I will review our sales results for the 4-week retail month of August, which started on Monday, July 31, and ended on Sunday, August 27. This period is compared to the 4 weeks that began last year on Monday, August 1, and ended on Sunday, August 28. This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause actual events, results and/or performance to differ materially from those indicated by such statements. The risks and uncertainties include, but are not limited to, those outlined in today's call and sales release as well as other risks identified from time to time in the company's public statements and reports filed with the SEC. Forward-looking statements speak only as of the date they are made, and the company does not undertake to update them, except as required by law. As reported in our release, net sales for August came in at $18.42 billion, an increase of 5.0% from $17.55 billion last year. Reported comparable sales for August were as follows: in the U.S., it's 2.8%; Canada, 3.0%; Other international, 7.3%; total company, 3.4%; e-commerce, negative 2.5%. Comparable sales for August, excluding the impacts from changes in gasoline prices and foreign exchange were as follows: in the U.S., its at 3.2%; Canada, 7.5%; other international, 5.4%; total company, 4.1% and e-commerce negative 2.2%. Our comp traffic or frequency for August was up 5.2% worldwide and 4.8% in the U.S. Foreign currencies year-over-year relative to the U.S. dollar impacted total and comparable sales as follows: Canada, negatively by approximately 4.5%; other international, positively by approximately 2.3% and total company negatively by approximately 0.4%. Gas price deflation negatively impacted total reported comp sales by approximately 0.3%. The average worldwide selling price per gallon was down approximately 2% versus last year. Worldwide, the average transaction was down about 1.7%, which includes the negative impact from gas deflation and FX. In terms of regional and merchandising categories, the general highlights were as follows: U.S. regions with the strongest comparable sales were the Southeast, Texas and Midwest; other international and local currencies, we saw the strongest results in Spain, Mexico and Australia; year-over-year inflation in food and sundries continues to decrease and was lower than in July. Moving to merchandise highlights. The following comparable sales results by category for the month exclude the positive impact of foreign exchange. Food and sundries were positive in the high single digits. Sundries, candy and food, were the strongest departments. Fresh foods were up mid-single digits. Better-performing departments included bakery and meat. Non-foods was negative low single digits. Better-performing departments included jewelry, automotive and tires. Weaker departments were sporting goods, garden and home furnishings. Ancillary business sales were positive low single digits. Food court, pharmacy and optical were the top performers. Gasoline was lower driven by the average price per gallon. Looking ahead, the September reporting period will include the 5 weeks beginning August 28 and ending August -- October 1 compared to the 5 weeks beginning August 29 and ending October 2, 2022. September sales will be announced Wednesday, October 4 at 1:15 p.m. Prior to the September sales, we will be releasing our Q4 and total year fiscal '23 earnings on September 26. Earnings will be announced after market close with a conference call to follow at 2:00 p.m. Pacific Time. The call can be streamed live via our Investor Relations website. If you have any questions -- Investor Relations questions, please give me a call at 425-313-8239. Otherwise, this recording will be available until 5:00 p.m. Pacific Time, Wednesday, September 6. Have a good day.