Costco(COST) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales increased by 9% to $57,392 million in the third quarter of 2024, driven by comparable sales growth and sales from 24 new warehouses opened since the end of the third quarter of 2023[94] - Net income for the third quarter was$1,681 million, or $3.78 per diluted share, compared to$1,302 million, or $2.93 per diluted share in 2023[94] - Comparable sales increased by 7$3,892 million or 9% during the third quarter of 2024, with growth across all categories[97] - The e-commerce business experienced a 21% increase in comparable sales, despite a 10% decline in the previous year[96] Membership and Revenue - Membership fee revenue rose by 8% to $1,123 million, attributed to new member sign-ups and upgrades to Executive Membership[94] - Membership fee revenue increased by 8$298 million charge recorded in the third quarter of 2023 related to the discontinuation of charter shipping activities[94] - Gross margin percentage for the third quarter was 10.84%, an increase of 52 basis points compared to the previous year, with a core merchandise gross margin percentage increase of 10 basis points[102][103] - SG&A expenses as a percentage of net sales decreased by 15 basis points, largely due to improved productivity in warehouse operations[94] - SG&A expenses as a percentage of net sales decreased to 8.96% in the third quarter, down 15 basis points from the previous year[108][109] Cash Flow and Capital Expenditures - Net cash provided by operating activities totaled $8,381 for the first thirty-six weeks of 2024, compared to$7,343 in the same period of 2023[115][117] - Capital expenditures for the first thirty-six weeks of 2024 amounted to $3,133, with plans to spend approximately$4,300 to $4,500 during fiscal 2024[119] Dividends and Share Repurchase - A quarterly cash dividend of$1.16 per share was declared on April 10, 2024, and a special dividend of $15.00 per share was paid on May 10, 2024, totaling approximately$6,655[122] - The Board of Directors authorized a share repurchase program of $4,000, expiring in January 2027, with$3,079 remaining available for purchase as of the end of Q3 2024[123] - In the first thirty-six weeks of 2024, the company repurchased 749,000 shares at an average price of $646.07, totaling approximately$484 million, compared to 908,000 shares at an average price of $492.30, totaling approximately$447 million in the same period of 2023[123] Warehouse Expansion - The company opened 24 new warehouses since the end of the third quarter of 2023, contributing to net sales growth[97] - The company opened 16 new warehouses in the first thirty-six weeks of 2024 and plans to open an additional 14 warehouses in the remainder of the fiscal year[119] Financial Position and Risks - The company maintains bank credit facilities with a borrowing capacity of $1,145 million, of which$656 million is for international operations[124] - Outstanding commitments under letter of credit facilities totaled $187 million at the end of Q3 2024, primarily consisting of standby letters of credit[125] - There have been no material changes to critical accounting estimates as disclosed in the Annual Report for the fiscal year ended September 3, 2023[126] - The company has not experienced any material changes in market risks related to foreign-currency exchange rates and interest rates since the last annual report[127] Internal Controls and Procedures - Disclosure controls and procedures were reviewed and deemed effective as of May 12, 2024, by the CEO and CFO[129] - No changes in internal control over financial reporting occurred during Q3 2024 that materially affected the company's internal controls[130]