*Excludes a $0.19 per share tax benefit related to a special dividend Source: Company reports/Fung Global Retail & Technology

Fiscal 3Q17 Results

Costco reported fiscal 3Q17 total revenue of $28.9 billion, up 7.8% year over year and beating the consensus estimate of $28.6 billion. Membership fee income was $644 million, below the $655 million consensus estimate. Total comps were up 5%, with comps up 6% in the US, up 2% in Canada and up 4% in other international regions. For the 36-week period, comps were up 3%; they were up 3% in the US, up 5% in Canada and up 0% in other international regions. Excluding fuel and foreign exchange, total comps were up 5%, with comps up 5% in the US, up 3% in Canada and up 6% in other international regions. For the 36-week period, such comps were up 3%; they were up 3% in the US, up 3% in Canada and up 4% in other international regions. Adjusted EPS was $1.40, versus $1.24 in the year-ago quarter and beating the $1.31 consensus estimate. The figure excludes a $0.19 per share tax benefit related to an $82 million tax benefit in connection with a $7.00 per share special cash dividend announced on April 25, 2017. GAAP EPS was $1.59.

Details from the Quarter

The company’s quarterly figures include the following monthly comparable sales.

• March: Total comps were up 6%, with comps up 7% in the US, up 3% in Canada and up 4% in other international regions. Excluding gasoline and foreign exchange, comps were up 3%; they were up 3% in the US, up 6% in Canada and up 0% in other international regions.
• April: Total comps were up 3%, with comps up 4% in the US, down 1% in Canada and up 2% in other international regions. Excluding gasoline and foreign exchange, comps were up 3%; such comps were up 3% in the US, up 5% in Canada and up 5% in other international regions.

As of the end of the quarter, Costco operated 732 warehouses (up from 728 at the end of the previous fiscal quarter), including 510 in the US and Puerto Rico, 95 in Canada, 37 in Mexico, 28 in the UK, 25 in Japan, 13 in South Korea, 13 in Taiwan, eight in Australia, two in Spain and one in Iceland. Costco also operates e-commerce websites in the US, Canada, the UK, Mexico, South Korea and Taiwan.

Outlook

In FY17, the company plans to open 29 net new locations, including 13 additional openings during the company’s fourth fiscal quarter. Consensus FY17 estimates (which are likely to be raised following this quarter’s EPS beat) are for revenues of $127.5 billion, up 7.4%, and for EPS of $5.66, up 6.2%.