☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
|
91-1223280
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
☒
|
|
Accelerated filer
☐
|
Non-accelerated filer
☐
|
|
Smaller reporting company
☐
|
|
|
Emerging growth company
☐
|
|
|
Page
|
PART I
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
February 17,
2019 |
|
September 2,
2018 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,080
|
|
|
$
|
6,055
|
|
Short-term investments
|
1,042
|
|
|
1,204
|
|
||
Receivables, net
|
1,995
|
|
|
1,669
|
|
||
Merchandise inventories
|
11,356
|
|
|
11,040
|
|
||
Other current assets
|
1,175
|
|
|
321
|
|
||
Total current assets
|
21,648
|
|
|
20,289
|
|
||
PROPERTY AND EQUIPMENT
|
|
|
|
||||
Land
|
6,300
|
|
|
6,193
|
|
||
Buildings and improvements
|
16,533
|
|
|
16,107
|
|
||
Equipment and fixtures
|
7,704
|
|
|
7,274
|
|
||
Construction in progress
|
1,165
|
|
|
1,140
|
|
||
|
31,702
|
|
|
30,714
|
|
||
Less accumulated depreciation and amortization
|
(11,557
|
)
|
|
(11,033
|
)
|
||
Net property and equipment
|
20,145
|
|
|
19,681
|
|
||
OTHER ASSETS
|
1,006
|
|
|
860
|
|
||
TOTAL ASSETS
|
$
|
42,799
|
|
|
$
|
40,830
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
CURRENT LIABILITIES
|
|
|
|
||||
Accounts payable
|
$
|
10,711
|
|
|
$
|
11,237
|
|
Accrued salaries and benefits
|
3,173
|
|
|
2,994
|
|
||
Accrued member rewards
|
1,130
|
|
|
1,057
|
|
||
Deferred membership fees
|
1,735
|
|
|
1,624
|
|
||
Current portion of long-term debt
|
1,698
|
|
|
90
|
|
||
Other current liabilities
|
4,003
|
|
|
2,924
|
|
||
Total current liabilities
|
22,450
|
|
|
19,926
|
|
||
LONG-TERM DEBT, excluding current portion
|
4,794
|
|
|
6,487
|
|
||
OTHER LIABILITIES
|
1,372
|
|
|
1,314
|
|
||
Total liabilities
|
28,616
|
|
|
27,727
|
|
||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
||||
EQUITY
|
|
|
|
||||
Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding
|
0
|
|
|
0
|
|
||
Common stock $0.01 par value; 900,000,000 shares authorized; 439,989,000 and 438,189,000 shares issued and outstanding
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
6,218
|
|
|
6,107
|
|
||
Accumulated other comprehensive loss
|
(1,280
|
)
|
|
(1,199
|
)
|
||
Retained earnings
|
8,916
|
|
|
7,887
|
|
||
Total Costco stockholders’ equity
|
13,858
|
|
|
12,799
|
|
||
Noncontrolling interests
|
325
|
|
|
304
|
|
||
Total equity
|
14,183
|
|
|
13,103
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
42,799
|
|
|
$
|
40,830
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
NET INCOME INCLUDING NONCONTROLLING INTERESTS
|
$
|
901
|
|
|
$
|
713
|
|
|
$
|
1,678
|
|
|
$
|
1,364
|
|
Foreign-currency translation adjustment and other, net
|
52
|
|
|
150
|
|
|
(82
|
)
|
|
127
|
|
||||
Comprehensive income
|
953
|
|
|
863
|
|
|
1,596
|
|
|
1,491
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
13
|
|
|
22
|
|
|
21
|
|
|
33
|
|
||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO
|
$
|
940
|
|
|
$
|
841
|
|
|
$
|
1,575
|
|
|
$
|
1,458
|
|
|
12 Weeks Ended February 17, 2019
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
Total Costco
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|||||||||||||||||
|
Shares (000’s)
|
|
Amount
|
|
||||||||||||||||||||||||||
BALANCE AT NOVEMBER 25, 2018
|
440,546
|
|
|
$
|
4
|
|
|
$
|
6,107
|
|
|
$
|
(1,331
|
)
|
|
$
|
8,387
|
|
|
$
|
13,167
|
|
|
$
|
312
|
|
|
$
|
13,479
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
889
|
|
|
889
|
|
|
12
|
|
|
901
|
|
|||||||
Foreign-currency translation adjustment and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
|
1
|
|
|
52
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
119
|
|
|||||||
Release of vested restricted stock units (RSUs), including tax effects
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchases of common stock
|
(561
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(109
|
)
|
|
(117
|
)
|
|
—
|
|
|
(117
|
)
|
|||||||
Cash dividend declared and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(251
|
)
|
|
(251
|
)
|
|
—
|
|
|
(251
|
)
|
|||||||
BALANCE AT FEBRUARY 17, 2019
|
439,989
|
|
|
$
|
4
|
|
|
$
|
6,218
|
|
|
$
|
(1,280
|
)
|
|
$
|
8,916
|
|
|
$
|
13,858
|
|
|
$
|
325
|
|
|
$
|
14,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
12 Weeks Ended February 18, 2018
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Total Costco
Stockholders’ Equity |
|
Noncontrolling
Interests |
|
Total
Equity |
|||||||||||||||||
|
Shares (000’s)
|
|
Amount
|
|
||||||||||||||||||||||||||
BALANCE AT NOVEMBER 26, 2017
|
439,185
|
|
|
$
|
4
|
|
|
$
|
5,811
|
|
|
$
|
(1,037
|
)
|
|
$
|
6,300
|
|
|
$
|
11,078
|
|
|
$
|
278
|
|
|
$
|
11,356
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
701
|
|
|
701
|
|
|
12
|
|
|
713
|
|
|||||||
Foreign-currency translation adjustment and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
|
10
|
|
|
150
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
113
|
|
|||||||
Release of vested RSUs, including tax effects
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchases of common stock
|
(313
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(55
|
)
|
|
(59
|
)
|
|
—
|
|
|
(59
|
)
|
|||||||
Cash dividend declared and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(219
|
)
|
|
(219
|
)
|
|
(1
|
)
|
|
(220
|
)
|
|||||||
BALANCE AT FEBRUARY 18, 2018
|
438,883
|
|
|
$
|
4
|
|
|
$
|
5,920
|
|
|
$
|
(897
|
)
|
|
$
|
6,727
|
|
|
$
|
11,754
|
|
|
$
|
299
|
|
|
$
|
12,053
|
|
|
24 Weeks Ended February 17, 2019
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Total Costco
Stockholders’ Equity |
|
Noncontrolling
Interests |
|
Total
Equity |
|||||||||||||||||
|
Shares (000’s)
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
BALANCE AT SEPTEMBER 2, 2018
|
438,189
|
|
|
$
|
4
|
|
|
$
|
6,107
|
|
|
$
|
(1,199
|
)
|
|
$
|
7,887
|
|
|
$
|
12,799
|
|
|
$
|
304
|
|
|
$
|
13,103
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,656
|
|
|
1,656
|
|
|
22
|
|
|
1,678
|
|
|||||||
Foreign-currency translation adjustment and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
(81
|
)
|
|
(1
|
)
|
|
(82
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
391
|
|
|||||||
Release of vested restricted stock units (RSUs), including tax effects
|
2,511
|
|
|
—
|
|
|
(270
|
)
|
|
—
|
|
|
—
|
|
|
(270
|
)
|
|
—
|
|
|
(270
|
)
|
|||||||
Repurchases of common stock
|
(711
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(141
|
)
|
|
(151
|
)
|
|
—
|
|
|
(151
|
)
|
|||||||
Cash dividend declared and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(486
|
)
|
|
(486
|
)
|
|
—
|
|
|
(486
|
)
|
|||||||
BALANCE AT FEBRUARY 17, 2019
|
439,989
|
|
|
$
|
4
|
|
|
$
|
6,218
|
|
|
$
|
(1,280
|
)
|
|
$
|
8,916
|
|
|
$
|
13,858
|
|
|
$
|
325
|
|
|
$
|
14,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
24 Weeks Ended February 18, 2018
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Total Costco
Stockholders’ Equity |
|
Noncontrolling
Interests |
|
Total
Equity |
|||||||||||||||||
|
Shares (000’s)
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
BALANCE AT SEPTEMBER 3, 2017
|
437,204
|
|
|
$
|
4
|
|
|
$
|
5,800
|
|
|
$
|
(1,014
|
)
|
|
$
|
5,988
|
|
|
$
|
10,778
|
|
|
$
|
301
|
|
|
$
|
11,079
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,341
|
|
|
1,341
|
|
|
23
|
|
|
1,364
|
|
|||||||
Foreign-currency translation adjustment and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
117
|
|
|
10
|
|
|
127
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
348
|
|
|
—
|
|
|
—
|
|
|
348
|
|
|
—
|
|
|
348
|
|
|||||||
Release of vested RSUs, including tax effects
|
2,726
|
|
|
—
|
|
|
(216
|
)
|
|
—
|
|
|
—
|
|
|
(216
|
)
|
|
—
|
|
|
(216
|
)
|
|||||||
Repurchases of common stock
|
(1,047
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(164
|
)
|
|
(178
|
)
|
|
—
|
|
|
(178
|
)
|
|||||||
Cash dividend declared and other
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(438
|
)
|
|
(436
|
)
|
|
(35
|
)
|
|
(471
|
)
|
|||||||
BALANCE AT FEBRUARY 18, 2018
|
438,883
|
|
|
$
|
4
|
|
|
$
|
5,920
|
|
|
$
|
(897
|
)
|
|
$
|
6,727
|
|
|
$
|
11,754
|
|
|
$
|
299
|
|
|
$
|
12,053
|
|
|
As Reported
|
|
ASU 2014-09 Effect
|
|
Excluding ASU 2014-09 Effect
|
||||||
12 Weeks Ended February 17, 2019
|
|
|
|
|
|
||||||
Net Sales
|
$
|
34,628
|
|
|
$
|
179
|
|
|
$
|
34,449
|
|
Merchandise Costs
|
30,720
|
|
|
183
|
|
|
30,537
|
|
|||
Gross Margin
(1)
|
3,908
|
|
|
(4
|
)
|
|
3,912
|
|
|||
|
|
|
|
|
|
||||||
24 Weeks Ended February 17, 2019
|
|
|
|
|
|
||||||
Net Sales
|
$
|
68,939
|
|
|
$
|
519
|
|
|
$
|
68,420
|
|
Merchandise Costs
|
61,343
|
|
|
514
|
|
|
60,829
|
|
|||
Gross Margin
(1)
|
7,596
|
|
|
5
|
|
|
7,591
|
|
(1)
|
Net sales less merchandise costs.
|
February 17, 2019:
|
Cost
Basis |
|
Unrealized
Loss, Net |
|
Recorded
Basis |
||||||
Available-for-sale:
|
|
|
|
|
|
||||||
Government and agency securities
|
$
|
892
|
|
|
$
|
(8
|
)
|
|
$
|
884
|
|
Held-to-maturity:
|
|
|
|
|
|
||||||
Certificates of deposit
|
158
|
|
|
|
|
158
|
|
||||
Total short-term investments
|
$
|
1,050
|
|
|
$
|
(8
|
)
|
|
$
|
1,042
|
|
September 2, 2018:
|
Cost
Basis |
|
Unrealized
Loss, Net |
|
Recorded
Basis |
||||||
Available-for-sale:
|
|
|
|
|
|
||||||
Government and agency securities
|
$
|
912
|
|
|
$
|
(14
|
)
|
|
$
|
898
|
|
Held-to-maturity:
|
|
|
|
|
|
||||||
Certificates of deposit
|
306
|
|
|
|
|
306
|
|
||||
Total short-term investments
|
$
|
1,218
|
|
|
$
|
(14
|
)
|
|
$
|
1,204
|
|
|
Available-For-Sale
|
|
Held-To-Maturity
|
||||||||
|
Cost Basis
|
|
Fair Value
|
|
|||||||
Due in one year or less
|
$
|
403
|
|
|
$
|
401
|
|
|
$
|
158
|
|
Due after one year through five years
|
458
|
|
|
452
|
|
|
0
|
|
|||
Due after five years
|
31
|
|
|
31
|
|
|
0
|
|
|||
Total
|
$
|
892
|
|
|
$
|
884
|
|
|
$
|
158
|
|
February 17, 2019:
|
Level 1
|
|
Level 2
|
||||
Investment in government and agency securities
(1)
|
$
|
0
|
|
|
$
|
1,030
|
|
Forward foreign-exchange contracts, in asset position
(2)
|
0
|
|
|
7
|
|
||
Forward foreign-exchange contracts, in (liability) position
(2)
|
0
|
|
|
(2
|
)
|
||
Total
|
$
|
0
|
|
|
$
|
1,035
|
|
September 2, 2018:
|
Level 1
|
|
Level 2
|
||||
Money market mutual funds
(3)
|
$
|
9
|
|
|
$
|
0
|
|
Investment in government and agency securities
(1)
|
0
|
|
|
903
|
|
||
Forward foreign-exchange contracts, in asset position
(2)
|
0
|
|
|
16
|
|
||
Forward foreign-exchange contracts, in (liability) position
(2)
|
0
|
|
|
(2
|
)
|
||
Total
|
$
|
9
|
|
|
$
|
917
|
|
(1)
|
At
February 17, 2019
, $
146
cash and cash equivalents and
$884
short-term investments are included in the accompanying condensed consolidated balance sheets. At
September 2, 2018
,
immaterial
cash and cash equivalents and
$898
short-term investments are included in the accompanying condensed consolidated balance sheets.
|
(2)
|
The asset and the liability values are included in other current assets and other current liabilities, respectively, in the accompanying condensed consolidated balance sheets.
|
(3)
|
Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.
|
|
February 17, 2019
|
|
September 2, 2018
|
||||
1.70% Senior Notes due December 2019
|
$
|
1,200
|
|
|
$
|
1,200
|
|
1.75% Senior Notes due February 2020
|
500
|
|
|
500
|
|
||
2.15% Senior Notes due May 2021
|
1,000
|
|
|
1,000
|
|
||
2.25% Senior Notes due February 2022
|
500
|
|
|
500
|
|
||
2.30% Senior Notes due May 2022
|
800
|
|
|
800
|
|
||
2.75% Senior Notes due May 2024
|
1,000
|
|
|
1,000
|
|
||
3.00% Senior Notes due May 2027
|
1,000
|
|
|
1,000
|
|
||
Other long-term debt
|
525
|
|
|
613
|
|
||
Total long-term debt
|
6,525
|
|
|
6,613
|
|
||
Less unamortized debt discounts and issuance costs
|
33
|
|
|
36
|
|
||
Less current portion
|
1,698
|
|
|
90
|
|
||
Long-term debt, excluding current portion
|
$
|
4,794
|
|
|
$
|
6,487
|
|
|
Shares Repurchased (000's)
|
|
Average Price per Share
|
|
Total Cost
|
|||||
Second quarter of 2019
|
561
|
|
|
$
|
208.72
|
|
|
$
|
117
|
|
First half of 2019
|
711
|
|
|
$
|
213.08
|
|
|
$
|
151
|
|
|
|
|
|
|
|
|||||
Second quarter of 2018
|
313
|
|
|
$
|
187.70
|
|
|
$
|
59
|
|
First half of 2018
|
1,047
|
|
|
$
|
170.06
|
|
|
$
|
178
|
|
•
|
6,385,000
time-based RSUs that vest upon continued employment over specified periods of time;
|
•
|
91,000
performance-based RSUs, granted to executive officers of the Company, for which the performance targets have been met. The awards vest upon continued employment over specified periods of time; and
|
•
|
150,000
performance-based RSUs, granted to executive officers of the Company, subject to achievement of performance targets for fiscal
2019
, as determined by the Compensation Committee of the Board of Directors after the end of the fiscal year. These awards are included in the table below and the Company recognized compensation expense for these awards as it is currently deemed probable that the targets will be achieved.
|
|
Number of
Units
(in 000’s)
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
Outstanding at September 2, 2018
|
7,578
|
|
|
$
|
140.85
|
|
Granted
|
2,792
|
|
|
224.00
|
|
|
Vested and delivered
|
(3,688
|
)
|
|
155.67
|
|
|
Forfeited
|
(56
|
)
|
|
160.93
|
|
|
Outstanding at February 17, 2019
|
6,626
|
|
|
$
|
167.48
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Stock-based compensation expense before income taxes
|
$
|
119
|
|
|
$
|
112
|
|
|
$
|
389
|
|
|
$
|
346
|
|
Less recognized income tax benefit
|
(23
|
)
|
|
(2
|
)
|
|
(84
|
)
|
|
(79
|
)
|
||||
Stock-based compensation expense, net of income taxes
|
$
|
96
|
|
|
$
|
110
|
|
|
$
|
305
|
|
|
$
|
267
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Net income attributable to Costco
|
$
|
889
|
|
|
$
|
701
|
|
|
$
|
1,656
|
|
|
$
|
1,341
|
|
Weighted average number of common shares used in basic net income per common share
|
440,284
|
|
|
439,022
|
|
|
439,721
|
|
|
438,494
|
|
||||
RSUs
|
2,053
|
|
|
2,546
|
|
|
2,814
|
|
|
2,707
|
|
||||
Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share
|
442,337
|
|
|
441,568
|
|
|
442,535
|
|
|
441,201
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive RSUs
|
1,667
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
United States
Operations |
|
Canadian
Operations |
|
Other
International Operations |
|
Total
|
||||||||
12 Weeks Ended February 17, 2019
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
25,872
|
|
|
$
|
4,792
|
|
|
$
|
4,732
|
|
|
$
|
35,396
|
|
Operating income
|
812
|
|
|
198
|
|
|
193
|
|
|
1,203
|
|
||||
Depreciation and amortization
|
256
|
|
|
37
|
|
|
59
|
|
|
352
|
|
||||
Additions to property and equipment
|
404
|
|
|
77
|
|
|
106
|
|
|
587
|
|
||||
12 Weeks Ended February 18, 2018
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
23,687
|
|
|
$
|
4,745
|
|
|
$
|
4,563
|
|
|
$
|
32,995
|
|
Operating income
|
603
|
|
|
206
|
|
|
207
|
|
|
1,016
|
|
||||
Depreciation and amortization
|
262
|
|
|
31
|
|
|
51
|
|
|
344
|
|
||||
Additions to property and equipment
|
375
|
|
|
39
|
|
|
94
|
|
|
508
|
|
||||
24 Weeks Ended February 17, 2019
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
51,422
|
|
|
$
|
9,769
|
|
|
$
|
9,274
|
|
|
$
|
70,465
|
|
Operating income
|
1,372
|
|
|
412
|
|
|
368
|
|
|
2,152
|
|
||||
Depreciation and amortization
|
504
|
|
|
68
|
|
|
111
|
|
|
683
|
|
||||
Additions to property and equipment
|
928
|
|
|
171
|
|
|
218
|
|
|
1,317
|
|
||||
Net property and equipment
|
13,725
|
|
|
1,937
|
|
|
4,483
|
|
|
20,145
|
|
||||
Total assets
|
30,033
|
|
|
4,250
|
|
|
8,516
|
|
|
42,799
|
|
||||
24 Weeks Ended February 18, 2018
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
46,500
|
|
|
$
|
9,516
|
|
|
$
|
8,788
|
|
|
$
|
64,804
|
|
Operating income
|
1,136
|
|
|
442
|
|
|
389
|
|
|
1,967
|
|
||||
Depreciation and amortization
|
514
|
|
|
63
|
|
|
102
|
|
|
679
|
|
||||
Additions to property and equipment
|
855
|
|
|
114
|
|
|
359
|
|
|
1,328
|
|
||||
Net property and equipment
|
12,690
|
|
|
1,852
|
|
|
4,507
|
|
|
19,049
|
|
||||
Total assets
|
26,417
|
|
|
3,825
|
|
|
8,461
|
|
|
38,703
|
|
||||
52 Weeks Ended September 2, 2018
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
102,286
|
|
|
$
|
20,689
|
|
|
$
|
18,601
|
|
|
$
|
141,576
|
|
Operating income
|
2,787
|
|
|
939
|
|
|
754
|
|
|
4,480
|
|
||||
Depreciation and amortization
|
1,078
|
|
|
135
|
|
|
224
|
|
|
1,437
|
|
||||
Additions to property and equipment
|
2,046
|
|
|
268
|
|
|
655
|
|
|
2,969
|
|
||||
Net property and equipment
|
13,353
|
|
|
1,900
|
|
|
4,428
|
|
|
19,681
|
|
||||
Total assets
|
28,207
|
|
|
4,303
|
|
|
8,320
|
|
|
40,830
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||
|
February 17, 2019
|
|
February 17, 2019
|
||||
Foods and Sundries
|
$
|
13,966
|
|
|
$
|
27,607
|
|
Hardlines
|
5,770
|
|
|
11,610
|
|
||
Fresh Foods
|
4,690
|
|
|
8,983
|
|
||
Softlines
|
4,224
|
|
|
8,347
|
|
||
Ancillary
|
5,978
|
|
|
12,392
|
|
||
Total Net Sales
|
$
|
34,628
|
|
|
$
|
68,939
|
|
•
|
Net sales increased
7%
to
$34,628
, driven by an increase in comparable sales of
5%
and sales at
22
net new warehouses opened since the end of the
second
quarter of fiscal
2018
;
|
•
|
Membership fee revenue increased
7%
to
$768
, primarily due to sign-ups at existing and new warehouses and the annual fee increase in the U.S. and Canada in June 2017;
|
•
|
Gross margin percentage increased
31
basis points primarily due to our warehouse ancillary and other businesses, predominantly our gasoline business;
|
•
|
SG&A expenses as a percentage of net sales decreased
two
basis points due to leveraging increased sales;
|
•
|
Net income increased
27%
to
$889
, or
$2.01
per diluted share, compared to
$701
, or
$1.59
per diluted share in
2018
;
|
•
|
On January 24, 2019, our Board of Directors declared a quarterly cash-dividend of $0.57 per share, which was paid on February 22, 2019; and
|
•
|
Subsequent to the end of the quarter, we increased our starting and supervisor wages and will provide paid bonding leave for hourly employees in the U.S. and Canada, effective March 2019. The estimated annualized pre-tax cost of these increases is approximately $50-$60.
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Net Sales
|
$
|
34,628
|
|
|
$
|
32,279
|
|
|
$
|
68,939
|
|
|
$
|
63,396
|
|
Changes in net sales
|
|
|
|
|
|
|
|
||||||||
U.S
|
9
|
%
|
|
9
|
%
|
|
11
|
%
|
|
10
|
%
|
||||
Canada
|
1
|
%
|
|
12
|
%
|
|
3
|
%
|
|
14
|
%
|
||||
Other international
|
4
|
%
|
|
21
|
%
|
|
6
|
%
|
|
19
|
%
|
||||
Total Company
|
7
|
%
|
|
11
|
%
|
|
9
|
%
|
|
12
|
%
|
||||
Changes in comparable sales:
|
|
|
|
|
|
|
|
||||||||
U.S
|
7
|
%
|
|
7
|
%
|
|
9
|
%
|
|
9
|
%
|
||||
Canada
|
0
|
%
|
|
9
|
%
|
|
1
|
%
|
|
10
|
%
|
||||
Other international
|
1
|
%
|
|
16
|
%
|
|
2
|
%
|
|
13
|
%
|
||||
Total Company
|
5
|
%
|
|
8
|
%
|
|
7
|
%
|
|
9
|
%
|
||||
Changes in comparable sales excluding the impact of changes in foreign currency and gasoline prices
(1)
:
|
|
|
|
|
|
|
|
||||||||
U.S
|
7
|
%
|
|
6
|
%
|
|
8
|
%
|
|
7
|
%
|
||||
Canada
|
6
|
%
|
|
2
|
%
|
|
6
|
%
|
|
3
|
%
|
||||
Other international
|
5
|
%
|
|
7
|
%
|
|
5
|
%
|
|
8
|
%
|
||||
Total Company
|
7
|
%
|
|
5
|
%
|
|
7
|
%
|
|
7
|
%
|
(1)
|
Excludes the impact of the revenue recognition standard for the periods ended
February 17, 2019
. See Item 1 Note 1.
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Membership fees
|
$
|
768
|
|
|
$
|
716
|
|
|
$
|
1,526
|
|
|
$
|
1,408
|
|
Membership fees as a percentage of net sales
|
2.22
|
%
|
|
2.22
|
%
|
|
2.21
|
%
|
|
2.22
|
%
|
||||
Total paid members as of quarter end (000's)
|
52,700
|
|
|
50,400
|
|
|
—
|
|
|
—
|
|
||||
Total cardholders as of quarter end (000's)
|
96,300
|
|
|
92,200
|
|
|
—
|
|
|
—
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Net sales
|
$
|
34,628
|
|
|
$
|
32,279
|
|
|
$
|
68,939
|
|
|
$
|
63,396
|
|
Less merchandise costs
|
30,720
|
|
|
28,733
|
|
|
61,343
|
|
|
56,350
|
|
||||
Gross margin
|
$
|
3,908
|
|
|
$
|
3,546
|
|
|
$
|
7,596
|
|
|
$
|
7,046
|
|
Gross margin percentage
|
11.29
|
%
|
|
10.98
|
%
|
|
11.02
|
%
|
|
11.11
|
%
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
SG&A expenses
|
$
|
3,464
|
|
|
$
|
3,234
|
|
|
$
|
6,939
|
|
|
$
|
6,458
|
|
SG&A expenses as a percentage of net sales
|
10.00
|
%
|
|
10.02
|
%
|
|
10.06
|
%
|
|
10.19
|
%
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Preopening expenses
|
$
|
9
|
|
|
$
|
12
|
|
|
$
|
31
|
|
|
$
|
29
|
|
Warehouse openings, including relocations
|
|
|
|
|
|
|
|
||||||||
United States
|
2
|
|
|
1
|
|
|
8
|
|
|
7
|
|
||||
Canada
|
0
|
|
|
0
|
|
|
2
|
|
|
1
|
|
||||
Other International
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
Total warehouse openings, including relocations
|
2
|
|
|
1
|
|
|
10
|
|
|
8
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Interest expense
|
$
|
34
|
|
|
$
|
37
|
|
|
$
|
70
|
|
|
$
|
74
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Interest income
|
$
|
33
|
|
|
$
|
16
|
|
|
$
|
54
|
|
|
$
|
29
|
|
Foreign-currency transaction gains (losses), net
|
8
|
|
|
(14
|
)
|
|
3
|
|
|
(10
|
)
|
||||
Other, net
|
5
|
|
|
5
|
|
|
11
|
|
|
10
|
|
||||
Interest income and other, net
|
$
|
46
|
|
|
$
|
7
|
|
|
$
|
68
|
|
|
$
|
29
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
February 17,
2019 |
|
February 18,
2018 |
|
February 17,
2019 |
|
February 18,
2018 |
||||||||
Provision for income taxes
|
$
|
314
|
|
|
$
|
273
|
|
|
$
|
472
|
|
|
$
|
558
|
|
Effective tax rate
|
25.8
|
%
|
|
27.7
|
%
|
|
21.9
|
%
|
|
29.0
|
%
|
|
24 Weeks Ended
|
||||||
|
February 17,
2019 |
|
February 18,
2018 |
||||
Net cash provided by operating activities
|
$
|
1,958
|
|
|
$
|
2,115
|
|
Net cash used in investing activities
|
(1,171
|
)
|
|
(1,158
|
)
|
||
Net cash used in financing activities
|
(749
|
)
|
|
(748
|
)
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs
(1)
|
|
Maximum Dollar Value of Shares that May Yet be Purchased Under the Programs
(1)
|
||||||
November 26, 2018 - December 23, 2018
|
138,000
|
|
|
$
|
212.44
|
|
|
138,000
|
|
|
$
|
2,364
|
|
December 24, 2018 - January 20, 2019
|
220,000
|
|
|
204.60
|
|
|
220,000
|
|
|
2,319
|
|
||
January 21, 2019 - February 17, 2019
|
203,000
|
|
|
210.64
|
|
|
203,000
|
|
|
2,276
|
|
||
Total second quarter
|
561,000
|
|
|
$
|
208.72
|
|
|
561,000
|
|
|
|
(1)
|
Our stock repurchase program is conducted under a $4,000 authorization approved by of our Board of Directors in April 2015, which expires in April 2019.
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
|
Exhibit Description
|
|
Filed
Herewith
|
|
Form
|
|
Period Ending
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
2019 Incentive Plan
|
|
|
|
DEF 14
|
|
|
|
12/17/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
x
|
|
|
|
|
|
|
|
C
OSTCO
W
HOLESALE
C
ORPORATION
(Registrant)
|
||
|
|
|
|
March 13, 2019
|
By
|
|
/s/ W. C
RAIG
J
ELINEK
|
Date
|
|
|
W. Craig Jelinek
President, Chief Executive Officer and Director
|
|
|
|
|
March 13, 2019
|
By
|
|
/s/ R
ICHARD
A. G
ALANTI
|
Date
|
|
|
Richard A. Galanti
Executive Vice President, Chief Financial Officer and Director
|
|
||||
|
|
|
|
|
Director
|
|
Class
|
|
Year in Which Term Expires
|
James D. Sinegal
|
|
I
|
|
2000
|
Jeffrey H. Brotman
|
|
I
|
|
2000
|
Richard A. Galanti
|
|
I
|
|
2000
|
Hamilton E. James
|
|
II
|
|
2001
|
Frederick O. Paulsell, Jr.
|
|
II
|
|
2001
|
Jill S. Ruckelshaus
|
|
II
|
|
2001
|
Benjamin S. Carson
|
|
II
|
|
2001
|
Richard M. Libenson
|
|
III
|
|
2002
|
John W. Meisenbach
|
|
III
|
|
2002
|
Charles T. Munger
|
|
III
|
|
2002
|
Richard D. DiCerchio
|
|
III
|
|
2002
|
|
||
|
|
|
|
/s/ Joel Benoliel
|
|
|
By: Joel Benoliel
|
|
|
Title: Corporate Secretary
|
|
|
1.
|
The name of the corporation is Costco Wholesale Corporation.
|
|
|
2.
|
Article VIII of the Amended and Restated Articles of Incorporation of the corporation is amended in its entirety to read as follows:
|
|
|
3.
|
The amendment was adopted by the Board of Directors of the corporation in accordance with the provisions of RCW 23B.10.030 on October 28, 2014.
|
|
|
4.
|
The amendment was approved by the shareholders of the corporation in accordance with the provisions of RCW 23B.10.030 and 23B.10.040 on January 29, 2015.
|
|
|
|
|
|
COSTCO WHOLESALE CORPORATION
|
|
|||
|
|
|
|
Dated: March 6, 2015
|
By:
|
/s/ John Sullivan
|
|
|
Name: John Sullivan
|
||
|
Title: Corporate Secretary
|
|
|
1.
|
The name of the corporation is Costco Wholesale Corporation.
|
|
|
2.
|
Article V of the Amended and Restated Articles of Incorporation, as amended, of the corporation is amended in its entirety to read as follows:
|
|
|
3.
|
The amendment was adopted by the Board of Directors of the corporation in accordance with the provisions of RCW 23B.10.030 on September 24, 2018.
|
|
|
4.
|
The amendment was approved by the shareholders of the corporation in accordance with the provisions of RCW 23B.10.030 and 23B.10.040 on January 24, 2019.
|
|
|
|
|
|
COSTCO WHOLESALE CORPORATION
|
|
|||
|
|
|
|
Dated: March 10, 2019
|
By:
|
/s/ John Sullivan
|
|
|
Name: John Sullivan
|
||
|
Title: Senior Vice President, General Counsel and Secretary
|
Article 1
|
Offices
|
1
|
|
1.1
|
Principal Office
|
1
|
|
1.2
|
Registered Office and Registered Agent
|
1
|
|
1.3
|
Other Offices
|
1
|
|
|
|
|
|
Article 2
|
Shareholders
|
1
|
|
2.1
|
Annual Meeting
|
1
|
|
2.2
|
Special Meetings
|
5
|
|
2.3
|
Notice of Meetings
|
6
|
|
|
(a) Notice of Special Meeting
|
7
|
|
|
(b) Proposed Articles of Amendment or Dissolution
|
8
|
|
|
(c) Proposed Merger, Consolidation, Exchange, Sale, Lease or Disposition
|
8
|
|
|
(d) Declaration of Mailing
|
8
|
|
|
(e) Waiver of Notice
|
8
|
|
2.4
|
Quorum
|
8
|
|
2.5
|
Voting of Shares
|
8
|
|
2.6
|
Adjourned Meetings
|
9
|
|
2.7
|
Record Date
|
9
|
|
2.8
|
Record of Shareholders Entitled to Vote
|
9
|
|
2.9
|
Action by Shareholders Without a Meeting
|
9
|
|
2.10
|
Proxies
|
10
|
|
2.11
|
Organization
|
10
|
|
2.12
|
Shareholder Nominations Included in the Corporation’s Proxy Materials
|
10
|
|
|
(a) Inclusion of Shareholder Nominees in Proxy Statement
|
10
|
|
|
(b) Maximum Number of Shareholder Nominees
|
11
|
|
|
(c) Eligibility of Nominating Shareholder
|
12
|
|
|
(d) Nomination Notice
|
14
|
|
|
(e) Exceptions
|
17
|
|
2.13
|
Submission of Questionnaire, Representation and Agreement
|
19
|
|
|
|
|
|
Article 3
|
Board of Directors
|
20
|
|
3.1
|
Management Responsibility
|
20
|
|
3.2
|
Number of Directors, Qualification
|
20
|
|
3.3
|
Election
|
20
|
|
3.4
|
Vacancies
|
20
|
|
3.5
|
Removal
|
20
|
|
3.6
|
Resignation
|
20
|
|
|
3.6.1 Resignations and Director Elections
|
21
|
|
3.7
|
Annual Meeting
|
21
|
|
3.8
|
Regular Meetings
|
21
|
|
3.9
|
Special Meetings
|
21
|
|
3.10
|
Notice of Meeting
|
22
|
|
3.11
|
Quorum of Directors
|
22
|
|
3.12
|
Presumption of Assent
|
22
|
|
3.13
|
Action by Directors Without a Meeting
|
23
|
|
3.14
|
Telephonic Meetings
|
23
|
|
3.15
|
Compensation
|
23
|
|
3.16
|
Committees
|
23
|
|
3.17
|
Chairman
|
24
|
|
Article 4
|
Officers
|
24
|
|
4.1
|
Appointment
|
24
|
|
4.2
|
Qualification
|
24
|
|
4.3
|
Officers Designated
|
24
|
|
|
(a) Chief Executive Officer
|
24
|
|
|
(b) President
|
25
|
|
|
(c) Executive Vice Presidents
|
25
|
|
|
(d) Secretary
|
25
|
|
|
(e) Chief Financial Officer
|
26
|
|
|
(f) Treasurer
|
26
|
|
4.4
|
Delegation
|
26
|
|
4.5
|
Resignation
|
26
|
|
4.6
|
Removal
|
27
|
|
4.7
|
Vacancies
|
27
|
|
4.8
|
Compensation
|
27
|
|
Article 5
|
Execution of Instruments and Voting of Securities Owned by the Corporation
|
27
|
|
5.1
|
Execution of Corporate Instruments
|
27
|
|
5.2
|
Voting of Securities Owned by the Corporation
|
27
|
|
Article 6
|
Stock
|
28
|
|
6.1
|
Form and Execution of Certificates
|
28
|
|
6.2
|
Lost Certificates
|
28
|
|
6.3
|
Transfers
|
28
|
|
6.4
|
Registered Shareholders
|
28
|
|
6.5
|
Execution of Other Securities
|
29
|
|
Article 7
|
Books and Records
|
29
|
|
7.1
|
Books of Accounts, Minutes and Share Register
|
29
|
|
7.2
|
Copies of Resolutions
|
30
|
|
Article 8
|
Fiscal Year
|
30
|
|
Article 9
|
Corporate Seal
|
30
|
|
Article 10
|
Indemnification
|
30
|
|
10.1
|
Right to Indemnification
|
30
|
|
10.2
|
Nonexclusivity of Rights
|
30
|
|
10.3
|
Insurance, Contracts and Funding
|
30
|
|
10.4
|
Indemnification of Officers, Employees and Agents of the Corporation
|
31
|
|
10.5
|
Persons Serving Other Entities
|
31
|
|
Article 11
|
Amendment of Bylaws
|
31
|
|
a.
|
Paragraph 2 of Schedule 9.01 is deleted and replaced with the following:
|
b.
|
Paragraph 3 of Schedule 9.01 is deleted and replaced with the following:
|
c.
|
A new Paragraph 12 is added to Schedule 9.01 as follows:
|
d.
|
The following is added to the end of Paragraph 9 of Schedule 9.01:
|
a.
|
A new subsection to Section 5.06 shall be added as follows:
|
COSTCO WHOLESALE CORPORATION
By:
/s/ Paul Latham
Name:
Paul Latham
Title:
SVP
|
CITIBANK, N.A.
By:
/s/ Valerie Greer
Name:
Valerie Greer
Title:
MD
|
1)
|
I have reviewed this Quarterly Report on Form 10-Q of Costco Wholesale Corporation (“the registrant”);
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ W. C
RAIG
J
ELINEK
|
|
W. Craig Jelinek
|
|
President, Chief Executive Officer and Director
|
|
1)
|
I have reviewed this Quarterly Report on Form 10-Q of Costco Wholesale Corporation (“the registrant”);
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ R
ICHARD
A. G
ALANTI
|
|
Richard A. Galanti
|
|
Executive Vice President, Chief Financial Officer and Director
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ W. C
RAIG
J
ELINEK
|
|
Date: March 13, 2019
|
W. Craig Jelinek
|
|
|
President, Chief Executive Officer and Director
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ R
ICHARD
A. G
ALANTI
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Date: March 13, 2019
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Richard A. Galanti
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Executive Vice President, Chief Financial Officer and Director
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