Costco Wholesale Corporation (COST)
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Monthly Sales Update December 2020

Jan 6, 2021

Speaker 1

Hello, and thank you for calling Costco Wholesale Corporation. I'm David Sherwood, AVP of Finance and Investor Relations. And I will review our sales results for the 5 week retail month of December, which started on Monday, November 30 and ended Sunday, January 3. This period is compared to the 5 weeks that began on Monday, December 2 and ended on Sunday, January 5, 2020. 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. As reported in our release, net sales for December came in at $19,140,000,000 an increase of 12 0.3% from $17,040,000,000 last year. Comparable sales were as follows.

On a reported basis, in the U. S, the 5 weeks was a 9.6% 18 weeks, 12.2%. For Canada, the 5 weeks was an 8.0 percent 18 weeks, 13.7 percent. Other international, the 5 weeks is a 19.4% 18 weeks, 18.9 percent total company, the 5 weeks is a 10.7% 18 weeks, 13.3 percent and for e commerce, the 5 weeks was at 62.5 percent 18 weeks, 75.2%. Comparable sales excluding impacts from changes in gasoline prices and foreign exchange were as follows: in the U.

S, the 5 weeks is 11.0 percent 18 weeks, 14.3 percent In Canada, the 5 weeks is a 5.7 percent, 18 weeks, 13.3 percent. Other international, the 5 weeks is a 15.8% 18 weeks, 16.9 percent total company, the 5 weeks is a 10.9% 18 weeks, 14.5 percent. For e commerce, the 5 weeks was at 61.6% and 18 weeks is at 74.8%. Our comp traffic or frequency for December was down 0.6% worldwide. Traffic was negative in Canada, Mexico and the U.

K. Related to tougher restrictions due to COVID spikes. And we were up 1.3% in the U. S. Worldwide, the average transaction was up 11.4%, which included a negative impact of 120 basis points from gasoline deflation and 100 basis points of benefit from FX.

Foreign currencies year over year relative to the U. S. Dollar impacted December comp sales as follows: Canada 40 basis points and total company positively by approximately 100 basis points. Gasoline price deflation negatively impacted total reported comp sales by approximately 120 basis points. The average selling price was 14% lower year over year at $2.37 per gallon this year compared to $2.77 last year.

Total gallons sold also continued to be lower year over year, lower by approximately 10% versus last year. In terms of regional and merchandising categories, the general highlights were as follows: U. S. Regions with the strongest sales increases were Southeast, Texas and Northeast. Other international and local currencies, we saw the strongest results in Korea, U.

K. And Japan. Moving into merchandise highlights, the following comparable sales results by category for the month exclude the positive impact of foreign exchange. Food and sundries were positive low double digits. Departments had the strongest results for frozen foods, cooler, sundries and liquor.

Fresh foods were up high teens, better performing departments included meat and produce. Hardlines were positive high teens, better performing departments, including sporting goods, majors, including consumer electronics, garden and hardware. Soft lines were positive mid teens. Home furnishings, housewares and small appliances were strong in the month. Ancillary business sales were down low double digits, primarily due to lower year over year sales in gasoline, food court, photo and hearing aid.

Looking ahead, the January reporting period will include the 4 weeks beginning January 4 and ending January 31, compared to the 4 weeks beginning January 6 and ending February 2, 2020. January sales will be announced Wednesday, February 3 at 1:15 p. M. Pacific Time. If you have any questions regarding our December sales results or any other Investor Relations questions, please call Bob Nelson at 425-313-8255, Josh Damon at 425-313-8254 or myself, David Sherwood at 425-313-8239.

This recording will be available until 5 p. M. Pacific Time, Wednesday, January 13. Thanks for calling. Have a great day.

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