Costco Wholesale Corporation (COST) Earnings Call Transcript & Summary

Hello. I'm Josh Dahmen, AVP of Finance and Investor Relations, and I will review our sales results for the 5-week retail month of September, which started on Monday, August 28, and ended on Sunday, October 1. This period is compared to the 5 weeks that began last year on Monday, August 29, and ended on Sunday, October 2. 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 our 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 September came in at $22.75 billion, an increase of 6.0% from $21.46 billion last year. Reported comparable sales for September were as follows: U.S., 3.2%; Canada, 6.7%; Other International, 10.0%; total company, 4.5%, e-com, 3.7%. Comparable sales for September, excluding the impacts from changes in gasoline prices and foreign exchange were as follows: in the U.S., 2.7%; Canada, 8.0%; Other International, 4.9% total company, 3.7%, e-com, 3.5%. Our comp traffic or frequency for September was up 4.9% worldwide and 4.5% 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 2.0%, Other International, positively by approximately 4.9%, and total company positively by approximately 0.3%. Gas price inflation positively impacted total reported comp sales by approximately 0.5%. The average worldwide selling price per gallon was up approximately 3% versus last year. Worldwide, the average transaction was down about 0.3%, which includes positive impacts from gas inflation 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 Northeast, Other International and local currencies, we saw the strongest results in Spain, Mexico and the U.K. 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 mid- to high single digits, food, sundries and cooler were the strongest departments. Fresh foods were up mid- to high single digits. Better-performing departments included bakery and produce. Nonfoods was negative low to mid-single digits. Better-performing departments included jewelry, tires and automotive. Weaker apartments were home furnishings, sporting goods and hardware. Ancillary business sales were positive high single digits. Food court pharmacy and optical were the top performers. Gasoline was also up mid-single digits. Looking ahead, the October reporting period will include the 4 weeks beginning October 2 and ending October 29 compared to the 4 weeks beginning October 3 and ending October 30, 2022. October sales will be announced Wednesday, November 1 at 1:15 p.m. Pacific Time. If you have any Investor Relations questions, please call David Sherwood at (425) 313-8239 or give me a call at (425) 313-8254. This recording will be available until 5:00 p.m. Pacific Time, Wednesday, October 11.