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 6, and ended on Sunday, May 3. This period is compared to the 4 weeks that began last year on Monday, April 7 and ended on Sunday, May 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 all gasoline sales and the impact of foreign exchange are intended as supplemental information but 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 $23.92 billion, an increase of 13.0% from $21.18 billion last year. April had one additional shopping day versus last year due to the calendar shift of Easter. This positively impacted both total and comparable sales by approximately 1.5% to 2%. Reported comparable sales for the month were as follows: U.S. 11.7%; Canada 11.5%; Other International, 11.5%; Total Company, 11.6%; Digitally-Enabled 18.8%. Comparable sales for the month, excluding the impacts from changes in gasoline prices and foreign exchange were as follows: U.S., 8.0%; Canada 7.6%; Other International, 6.5%; Total Company, 7.8%; Digitally-Enabled 18.4%. Total Company comparable sales for the month, excluding all gas sales and the impact of foreign exchange was approximately 7.4%. Our comp traffic or frequency for the month was up 4.2% worldwide and 3.8% in the U.S. Foreign currencies year-over-year relative to the U.S. dollar impacted total and comparable sales as follows: Canada positively by approximately 1.5%; Other International positively by approximately 3.5%; and Total Company positively by approximately 0.7%. Gas price inflation positively impacted total reported comp sales by approximately 3.2%. The average worldwide selling price per gallon was up 26.7% versus last year. Worldwide, the average transaction was up 7.1%, which includes the impacts from gas inflation and FX, excluding gas inflation and FX, average transaction was up 3.4%. In terms of regional and merchandising categories, the general highlights were as follows: U.S. regions with the strongest comparable sales were the Midwest, Southeast and Northeast. Other International and local currencies, we saw the strongest results in Australia, Taiwan and the United Kingdom. The negative impact of cannibalization was approximately minus 40 basis points for the total company. Moving to merchandising highlights. The following comparable sales results by category for the month exclude the impact of foreign exchange. Foods and sundries were positive mid-single digits. Better-performing departments included frozen foods, candy and food. Fresh foods were up high single digits. Better-performing departments included meat and deli. Nonfoods were positive mid- to high single digits. Better-performing departments included home furnishing, jewelry and tires. Ancillary business sales were up mid-30s. Gas, pharmacy and hearing aid were the top performers. Gas was up low 40s, driven by price per gallon changes year-over-year, as well as an acceleration in volume growth. Looking ahead, the May reporting period will include the 4 weeks beginning May 4 and ending May 31, 2026, compared to the 4 weeks beginning May 5 and ending June 1, 2025. If you have any Investor Relations questions, please call Josh Dahmen at 425-313-8254, Bryan Starnes at 425-427-7403, or me at 425-313-6305. This recording will be available until 4:00 p.m. Pacific Time, Wednesday, May 13.