FINANCE

Costco Q4 profit surges; reports flaw in financial controls

BY Marianne Wilson

Costco Wholesale Corp.’s profit rose 13.5% in the fourth quarter, even as its online growth lost some steam.

Costco earned $1.04 billion, or $2.36 a share, in the quarter ended Sept.2, compared with $919 million, or $2.08 a share, in the year-ago period.

Net sales increased 5% to $43.41 billion. Analysts had expected sales of $44.27 billion for the quarter. Store traffic increased 4.9%.

Total same-store sales rose 9.2%; U.S. same-store sales were up 10.8%. E-commerce sales rose 26.3%. It was the smallest increase in a year amid increased competition for grocery sales from such rivals as Amazon.

Net income for the full year was $3.13 billion, or $7.09 per diluted share, compared to $2.68 billion, or $6.08 per diluted share, in the prior year, which had an additional week. Net sales for year rose 9.7% to $138.4 billion. E-commerce comp sales jumped 31.3%, reflecting the company’s increased investment in digital.

Costco ended its 2018 fiscal year with 762 warehouses, including 527 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, one in France and one in Iceland. Costco also operates e-commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

Costco cautioned it had uncovered weak internal controls that could have allowed someone to gain unauthorized access to its financial reporting systems. Costco said it was still reviewing its internal controls but the weakness identified related to “general information technology controls in the areas of user access and program change-management over certain information technology systems that support the company’s financial reporting processes,” it said.

“As of the date of this release, there have been no misstatements identified in the financial statements as a result of these deficiencies, and the company expects to timely file its Form 10-K,” and “remediation efforts have begun,” it said. Costco shares had ended the regular session.

Net income for the full year was $3.13 billion, or $7.09 per diluted share, compared to $2.68 billion, or $6.08 per diluted share, in the prior year, which had an additional week. Net sales for year rose 9.7% to $138.4 billion. E-commerce comp sales jumped 31.3%, reflecting the company’s increased investment in digital.

Costco ended its 2018 fiscal year with 762 warehouses,, including 527 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, one in France and one in Iceland. Costco also operates e-commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Do you think retail brands should steer clear of taking a stance on social and political issues?
FINANCE

Interbrand: The most valuable global brand is…

BY Marianne Wilson

Five U.S. companies took the top spots in a ranking of the world’s top 100 brands based on their value.

For the sixth year running, Apple was ranked No. 1 in Interbrand’s 2018 Best Global Brands report, with a total brand value of $214.48 billion. Google ($155.8 billion), Amazon ($100.76 billion), Microsoft $92 (billion) and Coca-Cola ($66 billion) rounded out the top five. Now in its 19th year, the report’s 2018 theme is Activating Brave, and examines the role that brand strength plays in the bold transformation of the world’s leading businesses.

Apart from Amazon, only two U.S.-based retailers made the top 100: Starbucks, No. 57, and Tiffany, No. 83. Several European retailers made the cut: Zara (No. 25); Ikea (No. 27); H&M (No. 30); Hermes (No. 32); Gucci (No. 39); Burberry (No. 94); Prada (No. 95).

Amazon topped the list of the fastest-growing brands, with a 56% increase in brand value. It was followed by Netflix (45%), Gucci (30%), Salesforce.com (23%), and Louis Vuitton (23%).

Interbrand determines brand value according to three key criteria: the financial performance of the branded products or service; the role the brand plays in purchase decisions; and the brand’s competitive strength and its ability to create loyalty and, therefore, sustainable demand and profit into the future.

“A decade after the global financial crisis, the brands that are growing fastest are those that intuitively understand their customers and make brave iconic moves that delight and deliver in new ways,” said Charles Trevail, Global CEO, Interbrand.

More than half of the top 100 came from five sectors: automotive, technology, financial services, luxury, and fast-moving consumer goods.

For the complete Top 100 ranking and report, visit Bestglobalbrands.com.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Do you think retail brands should steer clear of taking a stance on social and political issues?
FINANCE

Pier I loss widens in Q2

BY Marianne Wilson

A struggling Pier 1 Imports Inc. reported disappointing second quarter results amid a sharp decline in same-store sales.

The company’s loss widened to $51 million, or 63 cents a share, in the period ended Sept.1, from a loss of $7.8 million, or 10 cents a share, a year earlier. Revenue fell 12.8% to $355.3 million from $407.6. Analysts had been expecting revenue of $361 million. Same-store sales dropped 11.4%.

In a statement that reiterated remarks he said last month, Pier I president and CEO Alasdair James said that the company’s results reflected “execution challenges” related to its August brand re-launch and ‘New Day’ strategic plan initiatives, which are taking longer than expected to gain traction.

“However, we have already taken steps to refine our marketing program and product allocation and are encouraged by early signs of improvement in some of our key customer metrics in recent weeks, including conversion and customer growth. Indeed, as we sharpen our execution on key initiatives around product and marketing, we continue to expect our top-line trend to improve over time,” he said.

For the first half of its fiscal year, Pier 1’s net loss grew to $79.6 million, or 99 cents per share, compared to a net loss of $10.8 million, or 13 cents per share, for the same period last year.

Net sales for the first six months decreased 11% to $727.2 million. Same-store sales fell 9.8%.

Pier I operated 989 stores at the end of the second quarter.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Do you think retail brands should steer clear of taking a stance on social and political issues?