Costco Wholesale Corporation (COST) Earnings Call Transcript & Summary

Hello. I'm Andrew Yoon, Director of Finance and Investor Relations, and I will review our sales results for the 4-week retail month of November, which started on Monday, November 3, and ended on Sunday, November 30. This period is compared to the 4 weeks that began last year on Monday, November 4 and ended on Sunday, December 1. 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 $23.64 billion, an increase of 8.1% from $21.87 billion last year. Reported comparable sales for the month were as follows: U.S., 6.0%; Canada, 6.9%; Other International, 11.4%; total company, 6.9%; digitally enabled, 16.6%. Comparable sales for the month, excluding the impacts from changes in gasoline prices and foreign exchange were as follows: U.S., 5.8%; Canada, 8.3%; Other International, 8.0%; total company, 6.4%; digitally enabled, 16.3%. Total company comparable sales for the month, excluding all gas sales and the impact of foreign exchange was 7.0%. Our comp traffic or frequency for the month was up 3.8% worldwide and 3.0% in the U.S. Foreign currencies year-over-year relative to the U.S. dollar impacted total and comparable sales as follows: Canada negatively by approximately minus 0.7%; Other International positively by approximately 3.6%; and total company positively by approximately 0.4%. Gas price inflation positively impacted total reported comp sales by approximately 10 bps. The average worldwide selling price per gallon was up 0.6% versus last year. Worldwide, the average transaction was up 3.0%, which includes impacts from gas inflation and FX. Excluding gas inflation and FX, average transaction would have been up 2.5%. In terms of regional and merchandising categories, the general highlights were as follows: U.S. regions with the strongest comparable sales were the Northeast, Midwest and Southeast. Other international and local currencies, we saw the strongest results in Australia, Taiwan and the U.K. The negative impact of cannibalization was approximately minus 60 bps 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- to high single digits. Better-performing departments included candy, food and sundries. Fresh foods were up mid- to high single digits. Better-performing departments included meat and bakery. Nonfoods were positive mid-single digits. Better-performing departments included jewelry, tires and health and beauty. Ancillary business sales were up high single digits. Pharmacy, food court and optical were the top performers. Gas was up low to mid-single digits, driven by an increase in gallons year-over-year. Looking ahead, the December reporting period will include the 5 weeks beginning December 1 and ending January 4, 2026, compared to the 5 weeks beginning December 2 and ending January 5, 2025. If you have any Investor Relations questions, please call Josh Dahmen at (425) 313-8254 or me at (425) 313-6305. This recording will be available until 4:00 p.m. Pacific Time Wednesday, December 10.