Costco Wholesale reports Q1 operating results for fiscal 2007

14 Dec '06

2 min read

Costco Wholesale Corporation announced its operating results for the first quarter (12 weeks) of fiscal 2007, ended November 26, 2006.

Net sales for the first quarter of fiscal 2007 increased 9 percent to $13.85 billion from $12.67 billion during the first quarter of fiscal 2006. On a comparable warehouse basis, that is warehouses open at least one year, net sales increased 4 percent.

Net income for the first quarter of fiscal 2007 increased 10 percent to $237 million, or $.51 per diluted share, from $216 million, or $.45 per diluted share, during the first quarter of fiscal 2006.

In connection with the review of stock options announced by the Company on October 12, 2006, and guidance issued by the U.S. Internal Revenue Service on November 30, 2006, the Compensation Committee of the Board of Directors has approved a program intended to protect over 1,000 employees who are United States taxpayers from certain adverse tax consequences.

The program involves increasing the exercise prices on certain stock options granted from 2000 to 2003, while the Company makes payments to employees to reduce adverse income tax consequences from their options having been granted originally at prices lower than the revised prices.

The Company is also examining the availability of similar alternatives for employees outside the United States. In total, the Company currently estimates that it will record a non-recurring, pretax charge to earnings ofapproximately $70 million (approximately $45 million after-tax) in the second quarter of fiscal 2007, the twelve weeks ending February 18, 2007.

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