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 4-week retail month of May, which started on Monday, May 6, and ended on Sunday, June 2. This period is compared to the 4 weeks that began last year on Monday, May 8 and ended on Sunday, June 4. 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. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP. As reported in our release, net sales for May came in at $19.64 billion, an increase of 8.1% from $18.16 billion last year. Reported comparable sales for May were as follows: in the U.S., 5.8%; in Canada, 6.7%; Other International, 9.3%; total company, 6.4%, e-commerce, 15.3%. Comparable sales for May excluding the impacts from changes in gasoline prices and foreign exchange were as follows: in the U.S., 5.7%; Canada, 7.5%, Other International, 10.0%; total company, 6.5%; and e-commerce, 15.4%. Our comp traffic or frequency for May was up 6.0% worldwide and 5.1% in the U.S. Foreign currencies year-over-year relative to the U.S. dollar negatively impacted total and comparable sales as follows: Canada by approximately 1.3%; Other International by approximately 1.4%; and total company by approximately 0.4%. Gas price inflation positively impacted total reported comp sales by approximately 0.3%. The average worldwide selling price per gallon was up approximately 2.2% versus last year. Worldwide, the average transaction was up about 0.4%, which includes the 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 Texas, the Southeast and Midwest; Other International, in local currencies, we saw the strongest results in Mexico, Australia and the United Kingdom. Moving to merchandise highlights. The following comparable sales results by category for the month exclude the impact of foreign exchange. Food and sundries were positive mid-single digits. Cooler, food and candy were the strongest departments. Fresh foods were up high single digits. Better performing departments included produce and meat. Nonfoods were positive mid- to high single digits. Better-performing departments included jewelry, gift cards and toys and seasonal. Ancillary business sales were up mid- to high single digits. Pharmacy, food court and optical were the top performers. Looking ahead, the June reporting period will include the 5 weeks beginning June 3 and ending July 7 compared to the 5 weeks beginning June 5 and ending July 9, 2023. June sales will be announced Wednesday, July 10, 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 4:00 p.m. Pacific Time, Wednesday, June 12.