Costco Wholesale Corporation (COST) Earnings Call Transcript & Summary

Hello. I'm Andrew Yoon, Director of Finance and Investor Relations, and I'll review our sales results for the 4-week retail month of April, which started on Monday, April 7, and ended on Sunday, May 4. This period is compared to the 4 weeks that began last year on Monday, April 8, and ended Sunday, May 5. 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 the month came in at $21.18 billion, an increase of 7.0% from $19.80 billion last year. April had 1 less shopping day versus last year due to the shift in Easter. This negatively impacted total and comparable sales by approximately 1.5% to 2%. Reported comparable sales for the month were as follows: U.S., 5.2%; Canada, 1.5%; Other International, 3.2%; total company, 4.4%; e-commerce, 12.6%. Comparable sales for the month, excluding the impacts from changes in gasoline prices and foreign exchange were as follows: U.S., 7.1%; Canada, 5.0%; Other International, 6.5%; total company, 6.7%; e-commerce, 13.0%. Our comp traffic or frequency for the month was up 4.2% worldwide and 5.0% 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 minus 1.6%, Other International by approximately minus 2.5% and total company by approximately minus 0.6%. Gas price deflation negatively impacted total reported comp sales by approximately minus 1.7%. The average worldwide selling price per gallon was down approximately minus 13.4% versus last year. Worldwide, the average transaction was up about 0.2%, which includes impacts from gas deflation and FX. Ex gas deflation and FX, average transaction was up about 2.4%. In terms of regional and merchandising categories, the general highlights were as follows: U.S. regions with the strongest comparable sales were the Midwest, Northeast and Southeast. Other International in local currencies, we saw the strongest results in Mexico, Korea and Taiwan. Moving to merchandise highlights. The following comparable sales results by category for the month exclude the impact of foreign exchange. Foods and sundries were positive high single digits. Better-performing departments include cooler, deli and foods. Fresh foods were up high single digits. Better performing departments included meat and bakery. Nonfoods was positive mid- to high single digits. Better-performing departments include jewelry, majors and home furnishings. Ancillary business sales were down mid- to high single digits. Pharmacy, optical and food court were the top performers. Gas was down mid-teens, driven by price per gallon changes year-over-year. Looking ahead, the May reporting period will include the 4 weeks beginning May 5 and ending June 1 compared to the 4 weeks beginning May 6 and ending June 2, 2024. If you have any Investor Relations questions, please call Josh Damon at (425) 313-8254 or myself at (425) 313-6305. This recording will be available until 4:00 p.m. Pacific Time, Wednesday, May 14.