Earnings Call Excerpt
Costco Wholesale Corporation (COST)
F4Q08 Earnings Call
October 8, 2008 11:00 am ET
Executives
Richard Galanti - Chief Financial Officer, Executive Vice President and Director
Analysts
Adrianne Shapira - Goldman Sachs
Mark Miller – William Blair & Co.
Mitch Kaiser – Piper Jaffray
Charles Grom - J.P. Morgan
Robert Drbul – Barclay’s Capital
Peter Benedict - Wachovia
Mark [Lodameath] – Morgan Stanley
Dan Binder - Jefferies & Company
John Lehman – State of Wisconsin
Uta Werner - Sanford C. Bernstein & Co.
Charles Cerankosky – FTN Midwest Securities
Deborah Weinswig - Citigroup
Neil Currie - UBS
Sandra Barker – Montag & Caldwell
Joseph Feldman - Telsey Advisory Group
Presentation
Operator
Welcome everyone to the fiscal fourth quarter and year-end results and September sales release for Costco conference call. (Operator Instructions) Mr. Galanti you may begin your conference.
Richard Galanti
As with every conference call I will start by stating that these discussions we are having will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and that 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 as well as other risks identified from time to time in the company’s public statements and reports filed with the SEC.
To begin with our 16 week fourth quarter of fiscal 2008 operating results for the quarter, we came in at a reported $0.90 per share compared to last year’s fourth quarter of $0.83 per share. Both fiscal fourth quarters included a couple of items that were pointed out in this morning’s press release. In last year’s fourth quarter we reported a one-time non-cash charge of $56.2 million pre-tax or $0.08 per share related to refining our accounting for deferred membership fee revenues. Excluding this charge our company has reported $0.83 fourth quarter last year in the fourth quarter it would have been $0.91.
Also mentioned in this morning’s release, this year’s Q4 included two items; a $0.05 per share LIFO charge, our first significant LIFO charge in years, and a $0.02 per share charge related to a litigation settlement. Together, these two items impacted the $0.90 fourth quarter number this year by $0.07. Excluding these items this year’s fourth quarter results would have been $0.97 and on an apples-to-apples basis the $0.97 would have compared to a more normalized last year $0.91. So, a 6% year-over-year increase on an apples-to-apples basis.
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