Costco Wholesale Corporation (COST) Earnings Call Transcript & Summary

Hello. I'm David Sherwood, VP of Finance and Investor Relations, and I will review our results for the 5-week retail month of March, which started on Monday, March 4, and ended on Sunday, April 7. This period is compared to the 5 weeks that began last year on Monday, March 6, and ended on Sunday, April 9. This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and -- 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. Comparable sales and comparable sales, excluding impacts from changes in gasoline prices and foreign exchange are intended to have supplemental information and are not a substitute for net sales presented in accordance with GAAP. As reported in our release, net sales for March came in at $23.48 billion, an increase of 9.4% from $21.46 billion last year. This year's retail month of March was impacted by the shift in timing of Easter. The shift positively impacted total and comparable sales by approximately 1.5%. Reported comparable sales for March were as follows: -- in the U.S., it was a 7.3%; Canada, 8.9%; other international, 8.6%; total company 7.7% and e-commerce 28.3%. And Comparable sales for March, excluding the impacts from changes in gasoline prices and foreign exchange were as follows: -- in the U.S., 7.4%; Canada 7.3%, other international 8.4% and total company, 7.5% and e-commerce 28.0%. Our comp traffic or frequency for March was up 7.2% worldwide and 6.9% in the U.S., including the positive impact from the holiday shift. Foreign currencies year-over-year relative to the U.S. dollar positively impacted total and comparable sales as follows: Canada by approximately 0.9%, other international by approximately 0.1% and total company by approximately 0.1%. Gas price inflation positively impacted total reported comp sales by approximately 0.1%. The average worldwide selling price per gallon was up approximately 0.1% versus last year. Worldwide, the average transaction was up 0.5%, which includes impacts 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 Texas, the Midwest and Northwest. Other international and local currencies, we saw the strongest results in Mexico, Australia and Korea. Moving to merchandise highlights. The following comparable sales results by category for the month exclude the positive impact of foreign exchange but include the impact from the holiday shift. Food and sundries were positive mid- to high single digits. -- cooler, sundries and food were the strongest departments. Fresh foods were up mid- to high single digits. Better-performing departments included bakery and meat. -- nonfoods was positive low double digits. Better-performing departments included jewelry, tires and health and beauty aids. Ancillary business sales were up mid- to high single digits, food court, pharmacy and optical were the top performers. Gasoline was positive on comp gallon improvement year-over-year. Looking ahead, the April reporting period will include the 4 weeks beginning April 8 and ending May 5 compared to the 4 weeks beginning April 10 and ending May 7, 2023. A April sales will be announced on Wednesday, May 8, at 1:15 p.m. Pacific Time. If you have any Investor Relations questions, please call me at (425) 313-8239. This recording will be available until 4:00 p.m. Pacific Time, Wednesday, April 17.