COST - Earnings call transcript Q4 2018 | Costco Wholesale Corporation

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Operator

Good afternoon. My name is Britney, and I will be your conference operator today. At this time, I would like to welcome everyone to this Q4 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. now Mr. turn would to call I host, our Instructions] like the to over [Operator Galanti. Richard

Richard Galanti

outlined you, Thank forward-looking results good Reform and from that risks not meaning and uncertainties the materially Britney, the reports Act these by I’ll of cause statements differ from discussions those stating today’s those and limited SEC. include, to such of start identified The with that indicated XXXX. filed well performance statements. will involve Company’s as Securities may and/or are include uncertainties Private statements These but to, the afternoon within risks Litigation and as to in call, by risks the public everyone. other statements in events, actual time-to-time

and share, the release, only XX-week XXXX required they operating at reported Company $X.XX these speak and share or the ended the or to of press not as per income last results statements Net quarter the except quarter statements today’s made, we compared million as $X,XXX came Xnd. does In per of are the undertake $X.XX fiscal update September quarter XX.X% fourth the our for $XXX for in law. date by increase in to million XX year. fourth a the weeks Forward-looking

If you XX% normalize the number of a weeks, it’s increase. about

year, $XX.X $XXX.X year; the reported a as X.X% they XX-week the and comp comp last the up on basis in comp. the a $XX.X at X.X% we to is like-week XX-week billion Sales X% fiscal on XX weeks. for for for over year came quarter. XXX.X Net well, comps X.X% quarter a from billion terms sales the last sales. were XXXX, increased which In of billion, a versus basis billion increase basis, a On year again XX for year the

basis, was X.X% was for would a from In FX, and a U.S. weeks; Company, XX.X%; again reported And it FX the Canada, the the were ex gas a as have fourth gas ex X.X%. the a Now, reported I on was for comp release. press FX. a told, gas sales quarter gas been X.X%, follows, and total and mentioned, international on reported, FX X.X% ex XX reported was X.X%. X.X% gas ex inflation All -- as inflation a and and other and X.X.

XX which have year we e-commerce, ex comp, ago as reporting basis and XX.X% a XX.X%. well a and monthly gas As the on about weeks started well, e-commerce a was for FX

QX metrics. basis was Fourth or on to up as a dollar currencies on negatively frequency by relative negative. U.S. U.S. impacted in both points. points Weakening In basis terms traffic sales quarter QX comp by foreign shopping the about gas the basis inflation the comps XX by sales points X.X%, basis and by worldwide way about weighed of as benefited XX well the about Cannibalization XXX

Our X.X% little QX; FX, ticket average and the inflation a frontend excluding transaction up up was impacts of average over during and our X%. was

in income membership statement X.XX% was fee in XX-week it income last the income. line, X quarter, million We million, $XXX of of points QX the or on reported membership basis ‘XX; lower. Next year $XXX

a year-over-year up in $X a increases, QX, basis U.S. increase majority So, number and annual the in from a which $XX June or Xst related XX%. weeks fee increases little half fee Canada. $XX increase and basis, XX% on taken the of little over normalized -- a came the last X.X%, about to again membership this like reported XX million Of up on over

from That’s -- QX-end membership QX-end. up weeks our improved XX.X% rate at In XX.X% U.S. XX.X%, QX-end earlier; XX.X%. stood renewal rate at terms renewal rates XX.X% of and our rates. up QX. membership from in from Renewal XX worldwide Canada at In at rose improved and to

terms of both Gold at business million, weeks At QX-end. of million, XX.X that’s QX-end households from and members up stood XX X.X at had million; million In earlier QX-end. QX-end, we business Star number up primary from XX.X at X.X million; add-ons X.X

told, ago at end quarter from we went XX.X million XX.X member all QX-end. So, households million to

In year XX.X XX.X QX-end. cardholders, of from million cardholders, million terms up we at the ended with

which During weeks increase the the paid whole the had the openings. XXX,XXX It year. way in of or same XX,XXX this stood new executive benefit of annual but income average the numbers by to quarter, our increases. about is during And fourth increases. the accounting ‘XX, in quarter. that’s of upcoming during at million the The fee moderate year-over-year QX the XX of Also to deferred quarterly memberships is per be but quarters, fee quarter, fourth little continue XX quarter. quarters, each this treatment members we the net peaked will increase at QX-end, XX.X will exec four fee week, Related the nature for to the an due during added to very

to the margin line. down Going gross

reported Our quarter coming was the lower XX.XX%. inflation minus basis points. X at down basis XX by XX XX.XX%, excluding in in And points, was gas margin from that gross fourth year-over-year basis-point negative,

As I QX two go you always numbers, ask ex one is then, ‘XX down inflation. ‘XX, QX to reported; of columns do, and gas

reported XX a were XX was points. year-over-year. X basis, Other down plus inflation was points merchandise. X% would basis minus plus item basis, and Ancillary On X X XX merchandise basis on ex-gas minus was down plus be core inflation; ex-gas year-over-year, and was basis points reward reported margin line first and a XX. The minus year-over-year core businesses X

I reported get on minus we an two basis. columns X which which those the just inflation XX If ex-gas you basis-point, then mentioned and basis-point negative, you’ll up, add

merchandise lower Now, by categories. inflation; into of the ex-gas penetration again XX the reported was still sales component, basis lower XX the account on by and core takes that different

X core, in if margins their on own look QX by core you in you year-over-year merchandise basis their sales, categories core points. own margin the core categories to will, in If sales at relation were lower of terms merchandise

hardlines was core is speaking, throughout minus a and I’ve during of Ancillary to sundries X, from return and an quarters. little, was as rollout some was a the fiscal the because to related and we’re that sales were ‘XX. other the and the mentioned quarter, minus country. improvement incurring as well XX margin, primarily case told, business in that inflation. and food three XX, centralized the was relatively the gross little. core. mentioned, up down as detriment, which X three all fresh And of margins That’s But the facilities penetration. the the of first quarters basis-point on up softlines X as you reported up was Other extra incremental costs, the first I it was good Within ex-gas on

that offset and impact Hurricane the last last year’s benefited which legal by In quarter addition, from some we’re items positive last quarter by year’s two Harvey. basis some net-net some cycling settlement year -- points one-time with

Moving to SG&A.

by one, XX and was or basis XX, benefit, basis by ex-gas basis; minus plus minus Our points and and I on basis we’ll other ex-gas ease by X lower X compensation worse worse at on X columns was or reported X X; this a basis you explanation, you plus lower and Again, plus central on and by X.XX zero; QX points; SG&A points points say X coming percentage points. of and as first up and and inflation. be basis Again, reported X. better XX and ‘XX, operations get jot Core gas for QX ex or stock points sales the or basis. will ‘XX in inflation lower minus two FX, than lower X.XX zero was basis were columns, basis higher better add is basis X a points points, year; worse it numbers, a the XX the down the inflation, basis, we and then on XX reported of by by of would ex-gas inflation that

the X was ex by line the probably so expenses three But, a of as in June IT Hurricane of it year-over-year basis operation SG&A basis expenses as the impacted well comparison core say, the the and up added inflation, U.S., items Central ex variety negatively last XXth employees balance component, over that, SG&A the was And points, year related higher in that through U.S. I of continue lastly, June other net-net, were gas will small XX coming to to in X gas. Now, X; the XXth points changes from into wage frankly. by quarter, X minus QX basis better the lot on of X incurred miscellaneous Harvey. year. that next a last X quarters, this that to SG&A by increase went expense our And impact in hourly points. effect to next mentioned I’d June from

in About XX it openings, Next, million came year, on the net, QX year year, in at or was last well $XX we at higher. a $X,XXX year-over-year cash have, quarter, same a $X XX to this higher proceeds, told, coming pretax XX earned for in last we in income was year, was the so operating this compared $X,XXX despite lower by of coming income by in for year’s $XX by versus plus QX quarter interest the $XX million million; in of we $XX expense U.S. to income were openings, year-over-year, $X,XXX relos. less statement, year-over-year. results income $X cash This combination had the week million comparison couple benefitting income million. weeks year’s This Also to higher in million, fourth reported and reported ‘XX income and XX-week year year-over-year, itself XX-week of the quarter. XX the QX a year. higher $XX X X compares $XX total Interest the the items Last was was XX other and quarter, the invested $X,XXX interest expense. year-over-year in at opened preopening one million, rates amounted higher of Below X% the FX at year-over-year that of weeks $XX Overall, came in in million. Canada, international. million million. this positive All as as million; line, the operating year this Interest results on last in million million cash last $XX million higher balances. it

In terms of taxes. income

of all QX QX year’s XX.X% of for for and fiscal Our in QX XX.X% to ‘XX. ‘XX tax in XX.X% last compared to rate XX.X%. compared This at came

the income reform that quarter’s effective Xst from rate benefitted tax course This as tax January as of the well adjustments. favorable tax discrete was

other we based rate XX%. estimates, ‘XX, A to note. approximately change, our which total anticipate be of fiscal are course few For effective to subject on of our items Company current tax

and States During a XX X United units, net, Of plus additional X all net were international. new -- in XX were the of fiscal relos. we opened in XX -- ‘XX, additional the

expect we to the will plus, ‘XX, For warehouses. States in net in about About a X quarters quarter and new be low-XXs open XX United international.

located we X did well, we units same As relocate to as better and number facilities, larger to this plan year.

under Costco also Shanghai with late with next We’re expected opening construction in China first in our the September.

XXX total at price XXX,XXX of subject, we or And shares million buybacks. end, at right square warehouse $XXX.XX. Costco $XX of million stood QX square repurchased of average stock feet. QX, As footage In next worth stock an

all For average $XXX XXXX, an XXX.XX repurchased we per million of price share. of at

at activities. to year, at continued coming for in XX.X%. the increase e-commerce and Overall has for XX.X% the strong e-commerce Moving sales quarter, levels

and to for brands and higher slightly members some continue as we foremost, our offerings, including and continue well improving great brands. end values expanding we new our First deliver

as through improve year, orders, all Company’s our the well Shipt delivery like others grocery Instacart Online traffic This experience rates dry but both a to as well two-day grocery, and small nicely, conversion and continue dry still our as are year-over-year. latter -- as We of our our delivery, as site very improved same-day the fiscal member past our part our grocery growing sales. fresh well.

where small terms online in side, present, Company. grocery, to the we’re two-day our which generating physical still is including all the right of X relatively XX states no sales In states are Costcos

increasing store. exciting buy online Overall, the offerings are do Hot merchandise merchandising and improve pickup Buyer impacting The offerings sales we’ll in our enjoyed Picks, activities. online sales is impact subject well both We these our tariffs to business, our positively on continue our presence, digital that warehouses. and on increased awareness traffic as in online helping we’ve And efforts and to and Buys services and all of our and and we warehouse are I’ll next business. continue feel with in and touch their as member

suppliers in our press seen. relate user our actions some the release. to and because with our time. items. and deficiencies, if have XX-K are on it internal our that with to done to a the tell Accelerating you moving reverse, items change into exploring Form taking over access and you and in as to and trying in we certain what some customers feasible; topic, pork, effect; country can our of Form processes. recognizing control will, weakness by internal fluid, of long to in to there’s everybody’s we it’s ability In IT limited be before management tariffs commitments to What there term? As lower are limited know, plan and have advantage a short possible financial we’ll go reporting do some parts U.S. so, soybeans. the there many and misstatements timely extremely in both the program and as In can to to. Working costs. starting to governments. and impacts Last to it’s takes actions some Chinese see controls. nuts competitors the and identified term again, related relate reactions expect certain material on impacted but XX-K. U.S. and/or noted sourcing, report statements general and the tariffs see file sure, controls reduce summary, IT some been what absorb taking such We as was Alternative of it’s Five, result I remain afternoon’s cases, reducing of pricing ability that where will be a of shipments have These how you financial to this no that react systems

In not controls terms through material controls of that of applicable remediation. weakness operating be are But operate a sufficient Remediation efforts and have the begun. we will period effectively. remediated considered for testing time until conclude

of remediation XXXX. of be that weakness prior fiscal to expect completed end the material We will the the

of in terms Lastly, upcoming releases.

on September that, October call Xth, With Sunday, our you, Britney. announce next Thank for October X the will We for the Britney I’ll turn to results over week sales the adding weeks XXth. back Q&A.

Operator

this Instructions] [Operator from And Michael a time, at Lasser. question we have

Michael Lasser

Richard. evening, my taking for question. Thanks Good a lot

of it margin With some the value you’d be the was taking core X the points, that price. investing reform the expectation down proposition, gross in tax basis particularly and

So, areas? think been have others if made? in that now [technical And where pricing have, it do currently marketplace you difficulty] those have in price? investing they been has with investments And your just been in stands the

Richard Galanti

was we’ve mind, in ‘XX; it’s in which those keep invest as used us savings, six DNA. the tax if the in what’s or afforded will, we several five great have starting years, in occurred every course, the credit of you we afforded then, will; of the I fee June think next last with to price, and Well, increase been our in buckets, invest some if all And ability. a over generally reform. the some price things about, card Certainly, that that us few years, there’s talked of you transition

these not with we’re are don’t not we fungible. infrastructure I price, in in fresh. have know the would of only you, one-day investing anyway, two-day like we but -- remind And and are that thing, monies it’s initial one this So, done successes investing

of those we -- there is four foreign the we good example, eight regions, each as when regions, the to meeting very competitors, can on. going all lot competitively. do regions, price every shops tell weeks we U.S., feel stand but -- I they geographic daily in and direct an of of our including where in the So, competitively, in our a we compared budget about the for each And how meet terms feel U.S. you,

whether or helps. and retailers, look, works relates supermarkets it’s boxes, it we it traditional that other big to it to the it impacts other As does than it more But think retailers lot monies us. traditional a

on we’ve seen traffic strong we in that we pretty frankly strong by where good think that. I numbers comps stand our about our evidenced store, as feel and

Michael Lasser

a clip. e-commerce growth your You’ve at been it’s very accelerating growing and nice

down light of channels? investments fact So, of growth able doubling some show would that both consider to your e-commerce you’ve on further in through you been the

Richard Galanti

of guess there’s I down, be going of doubling down. doubling Well, lots definitions

offer We’ve lot got within I think, IT, fulfillment is we added natured and is and to on tripling I I think can opportunities are the a a going we’re SKUs help of certainly our by we’re on. two-day us. lot were DNA But what we frankly focus a into now I before, feel for we’ve some plenty feel X,XXX putting got and items long-term do part that other we of you, help seeing, our are X,XXX in mean, But, X,XXX but process. it that should better lot of name to us, should we dramatically categories. prices grow adding added you that doubling we’ve only parties or of us, and nicely. one doing of or sourcing area. the going options We’ve or that it. we X,XXX not And that delivery lot activities way it. and for We do offered pricing, comfortable there products that better at are; efforts brands; being tell third But, a

some benefit only the into using Hot and But generally furniture seasonally and weeks, out and and X, XX, we stuff of we have summer. nature lawn or during Buys furniture emails notably, to warehouse, drive again online XX that garden, able XX finding in for that patio in lawn and e-commerce weeks. to for e-commerce patio were were sell and in garden might to only items XX, the that the be with We’re targeted with perhaps and traffic to buys, online some but cases some and ability not

be there sales some real XX are there. to in we’re Now, had online and weeks

improving awareness awareness. to us of it’s and So, on going that that keep part

a we of there. do to doing better we’re think it, job have I but more

Operator

your from And Simeon question Gutman. next comes of line the

Josh Kamboj

for is Josh Hi. for taking question. Thanks Gutman. Kamboj on our This Simeon

very been have last strong few the for quarters. comps Your

at within you you your most success seeing core If a to look or attribute broader up capturing you which consumable the consumers trading are of categories, if the are buying, set in? basket would are categories? former, new categories the strength that more And the customers

Richard Galanti

balanced, Electronics points pretty and like Buy. us. higher Best general. there It’s really strong, only to in for not Apparel non-food price but Walmart, us retailers I Target been are has certainly and been helpful other there has some and think

for apparel, both continued another years Kirkland and trying So, strong put can package. we brand results now we’ve in had And several keep some to in Signature. that

think I things more help. those all specific. broad more it’s -- than But, So, based say, I’d it’s

Josh Kamboj

looking And now. consumer greater had while. lens leveled to as in you They’re then, seeing a just at Gas again. greater sensitivity categories? health sensitivity quick for of through Are beginning any follow-up, a your prices off rise those

Richard Galanti

we -- but Well, we day We One down is could as a when little. to gas day. which view, haven’t down a yet, again, thing that have some our fine a could were prices found is gone retailers still little taking make with were in more, they but going new down, much them us. every have, as were able

big because to in impacts were our we’re comp and of enhanced So, prices Same couple the north numbers. value gallons. increase -- hard saying I when more value years; a It’s $X and know Generally, we’ve go proposition. $X, gallons that’s was that saw comp were same first how calendar we’ve on generally of up, find big some back to thing, of proposition. gas going seeing people economy remember, the -- where enjoyed it’s us thing the in that part we last we a when I fire prices can are say ‘XX, in in of increase helped and north that go seen to conscious.

Our pretty good. numbers are fortunately

Operator

your line And the question next of from Grom. Chuck comes

Chuck Grom

ancillary just the Richard, provided. gross the first on part margin profit question is of that composition you

third was so from line ancillary basis quarter. points, a reversal the big why wondering Just it’s the XX up

Richard Galanti

the it’s is point thing price ago. on now year-over-year. digit a per And Company, relative double business a low low-margin to us, percent XX-plus-percent big improved year gas. gallon Gas its than margins total while higher of is the our had that’s a Well, sales

on So, little helped that us well. E-com helped that us. a penetration, as

Chuck Grom

store XXs. sort is, have captured XXs; then, okay. So, second of the e-com sort talked talked know now, you’re has that guys I And talking question of about about low targets in you in -- you the line low item,

why XXXX? of deceleration in wondering for that number planned openings Just

Richard Galanti

budget XX a it’s have XX. between we -- and Well, that’s

the So, I plate. in conservative. to more got We’ve XXs, at low come just on be

like If U.S. three internationally, to you it’s longer longer look quarter at pipeline. There’s quarters takes now in but get more this year, through; this that coming it’s one pipeline pipeline the year,

number we’ll subject think in over guess, person, I so, likely have that you’ll probably years the change, mid-XXs betting see; is five XXXX and was a see If ‘XX, some to beyond I And number, best XXXX. the change. next to a but in that’s

Chuck Grom

online? concerned about, think kind just for store flush the habits. of with a could the for you just entire I question too the store? words, other buying any their shopping are seen think What out the basket then, to trends from are and And in total they on e-commerce. in And you you impact do Okay. along the blend about Have when household buying In store? how trips coming last you but online if less consumers and maybe frequently don’t change you

Richard Galanti

concerned that X.X average like it’s annual compounded everybody been, from -- ever and got mean, is it traffic believe. when low for fact a it couple I down the the ‘XX. traffic know the you now last concerned Well, seven enjoyed X.XX was strong the I months in everybody we and to I actually back as Xs guys, to increase ‘XX as years of Xs And [ph] was enjoy we’ve

been that this at a to think point. hard but it’s e-commerce. We it’s should additive, say, higher if net to been have And so, it’s hard than say

Operator

from question Heinbockel. John a have we next And

John Heinbockel

the minus Rich, the ex deflation, difference So, own me in X with category. the and margin start between let XX minus their

or driver in the the last there of that six mostly other think picked I a little mix; What’s maybe So, are primary that that? electronics work? bit strength obviously months. the that’s factors adverse Is up

Richard Galanti

are not issue gas. no. Electronics mix, they’ve big been; where not It’s there It’s margins generally there. a is

now, business You’ve is of different much XX%, a total gas on is gas XX% our business XX%? of got that’s margin our Company structure. -- sales percentage what a

John Heinbockel

pull there only when think, I but right, gas down But, looked down XX, difference the in ex the were were not -- their Yes. driven? out between own but you mix X, think, right, deflation, when two I so, at the is margins categories,

Richard Galanti

Well, mind, businesses if minus high of it may pharmacy mix driven you keep pharmacists. and be think into margin, there that have a about, is go because XX optical, sales but of things gross special about lots their we other it somewhat gross -- is and in is talked ancillary than margin. higher There includes that which is margins cost margin XX sales to optometrists the

it kind have higher what is the categories price or margins. you’ve have that other of that And like all in services got it’s buying -- So, is that. customer categories that ancillary

the mix. into things go those all So,

John Heinbockel

had faster rise, of But is to penetration slower? you’re been, as continue it KS it seeing or and same rising

Richard Galanti

cheeseburger the think out of list organic the I with growth The of several XX, over it’s big you’ve we the years handle, water. XX a items we a start been of water out and And faster late, XX razor mind, is items, items -- new or $X.XX rising, and the down not in got -- where toilet at like slower. blades that as brought Kirkland the big in a Signature the fragrances, there. just from Keep down But, couple cartridge beverages. price paper XX KS kinds lot all the and to still million. of saw there last food fragrances, Yet, court, consistently in looking $X.XX.

John Heinbockel

topic. then, And just separate Okay.

BOPUS limited limited. those basis, items, a were I and the keep with the right, wanted idea notebooks think and just obviously it is of You to still you some bags to that? applying doing it an expanding or on stuff Is

Richard Galanti

as high-end -- we’ve small we talked we’ve as sized handbags, tablets, like the limited like items in handbags talked things electronics and Well, things. well jewelry, some items -- mentioned past

do way. many [ph] We of where are electronics to items. that areas the incremental come shop. We Not a because want buying that have are suggest expanded it’s in there, by they higher it are to -- are into them been it, shop. higher convenient to member additional -- the are we our they’re these going while at surprised by it’s up to we’ve these picking still They half But, still going average think they to some the it are and then, frankly item means. shops, not are all shop. average no shop But much over just than people

we good, far and so will so So, see.

Operator

question line comes And your the next Short. from Karen of

Karen Short

And Hi. the Thanks. a rate an e-commerce I sales? of to I forward? color us percent with how wanted update going a growth give a think Can see then, just about e-commerce little you wanted as to just second. you us of start e-commerce where to for on on is if could give

Richard Galanti

of the question? the I’m last What’s sorry. part

Karen Short

of growth going How to the about forward? think e-commerce rate

Richard Galanti

look, around Well, I a we’re I I’m sorry, under drive of it mean, the little much number we X% -- think over can. And, is sales, a as right shade to as going X%.

when good months or ago string from few bit out we monthly I pluses XX people something, of disappointed a about to We there. XX little a a think, it. went feel were very

to success white of will, offering we’ve if with online one we’ve I think, done we now, offerings XX be goods extra the you that us next numbers stuff that I benefit we’ve we of shown can’t last about the September, the couple grown years, anything $XX seen -- white course good high-end by good feel $XXX and but the we’ve have million as say part adding of week, months, will helped look, and the sell mean, willing example big not a taking of brands as I seasonal like it. some way. of three having In ticket now what items many ability to of on has and and there. And for been the in lot weeks to year of sell furniture our home advantage and furnishings from big which in well focused years sales, that million a the

Karen Short

Okay. the of in can and Any That’s next some terms product just what see going you way from then, is you that And helpful. made. that where sense commentary to percent give China today of of years? the tariff in imported few

Richard Galanti

sourced I when things. got X and dollar historically, bunch the It’s to the to some have some not XX% be set to is is overnight. changed of X Mexico XX U.S. when on an couple estimates specifics. XX But, in out then price more up a seem XX change can fluid. can’t no, less from to that’ll XX dramatically product has been XX experienced the -- range, or dampening to within want done to demand effect of change a from the recently, things there if There out to has to for to And it’s of XX%. go that the but peso real are what give from dampening item, that have goods and XX, -- really analysts is mean, you we’ve until certain hard don’t have dissimilar of to range answer years -- we But, the last impact. the products it

early So, to tell. it’s too really

Karen Short

expectations, and calling you then can narrative all Okay. since both XQ, increases? base, on I just from at us the give question. translation, and guess, passing cost given inflation And in vendors just last cost out retail,

Richard Galanti

on is don’t and a about at indices looking And slightly. I know. because small head capital very have But top a this on off word it’s sales, inflationary. the -- higher It’s my of cost like don’t not the penetration. talking some S in slightly basis. I purely categories LIFO I’m have that

Karen Short

do increases? of you there of what on kind passing on you of narrative from has then, Where guys are thoughts lot been price what or in are And because stand seeing your that generally, vendors front? the a terms

Richard Galanti

brand and on when the -- we’re item. we we the of as sell doing to times think have, is than our of -- we also size of price lower. about company there buying But, be we’ll more feel competitively, usually number limited do octane all DNA and mean, the can’t I the and And buying a we don’t And these advantage what of label competing, have one we these. last power every in think, we items alternative, alternative what I keep given is, is raise is nature. to I that our But first to every SKU not that that. to alternative, power purchasing brands last that to is are but raise supplier figure you out billion Well, of we know to how every not we any Because much the want effect do items ultimately, many to and private because with to power. $XXX the eat price work want only it’s our

that So, it opportunities us I affords it easier perhaps make think us. some a for nothing… But little

Karen Short

Thanks.

Richard Galanti

you. Thank

Operator

question of And from line your Christopher Horvers. next comes the

Christopher Horvers

fixing the in is, sort control you the of the that is What’s-- testing internal in question that misstatement mentioned highness? related more have just any release systems weakness? there no is the that that getting to be a the financials found the first and future about there So, done? risk been or misstatements of there Is the could

Richard Galanti

mind all within had that who somebody level of it expressed took no comfort We should access that Well, including had have And with on is the so internal the a -- release contractors. K. that have first time they access, would relieved, they when and that once our that The will so. [ph] timeliness IT that to the press they people and too comfortable. we long do we keep there’s may auditors something there to or a had should we issues access have and filed to sometimes have little misstatements do be did feel feel ultimately the in time feel comfortable in of about user

went to weren’t done backs have the So, a and systems, in in could have entire better that can back what of place. you we we should or systems, misstatements done as and is and far breaches. some as issues looked tell then back job. done, we newer We outside the the help no We far for of do some which could you there look look the ability year, was as has terms for in fiscal with whatsoever found no controls back things. has certain I all as want our

we we positive But, So, can we be that more can’t that’s you. XX-K. tell release what the until

us, go We have and internal belittle should to should it. And it, -- so, want it’s have to it it don’t external but was from I not we’ll -- fixed there. been

Christopher Horvers

of talk half of of you seeing little first that picked a MFI X%. in accelerating… comp of of below sort growth number, year, like number fourth that It in organic quarter third Is XXrd the then X% that the sort quarter was bit also the the over about week? and an the nearly like all-in in up math rough then sort Can -- and MFI ex-FX and looks sort the like X%, running sort a of that you’re

Richard Galanti

mind, months, the so -- went But it issues our June deferred that The in is in and total, effect, in U.S. more pretty one to $XX using it math. we P&L. I into that Canada accounting, months Xst the in that’s get accounting. that’s that into the of XX $X of deferred checking in have million. believe account. that rough that the and the how was increases is next example, keep $XXX XX takes Well, as good Well, Based effect ‘XX, much number fee on

is QX if year-over-year of the increase -- peak part in year-over-year And sense, QX relative XX-month about QX think so, from you to it. you relative

$X.XX June, month got May. time, effectively happen the who June Somebody their $XX to to a XX was increase a in right renewal $XX first months, that for for be

$X.XX will rough it XX a through for XX, paid it in got the who XX person first months the hit time, later the did, numbers. XX Somebody month months for months they May, first that after

-- of So, is call, you million of if XX as effect in you that will, in million the when XXX getting the -- peak of full I’ll what terms XXX X/XX example. month an

I there that. some related it So, increase little is of suggest X% what probably a be X%, used no with increase to has became I that. think to X% a is wouldn’t that and that a of do to

another one next on of X,XXX we building reduced another. XX or $XXX We’ve or but course maybe the of members, of other Issaquah, is extra Redmond there. three here and over to and and on have some we’re year. on year added grow we where Seattle added a million sales units including it one year-and-a-half these openings per And are the we headquartered these sites average successful and XXX from from and we’ll related We XX,XXX the to ago with went open unit in a how net XXX,XXX members side Kirkland when openings average, we very of of many cannibalization,

the company not So, XX,XXX with an bit. that that we new you growth is little been there all when warehouse in XXs with renewal afforded lower Asia, But nonetheless we’re openings XXs, average average in the that XX-plus-thousand a when or do changes new in where warehouses huge probably have opened a rate. age signups we’ve metric of Similarly, the year XX,XXX, first high-teens, of in of Australia in average members whose low had members. low for the -- if numbers

all number every year two, those we’ve done a it. backed international few things of or impacts A bit. once year, LivingSocial that things have that So, little the

Christopher Horvers

has trend MFI XX through So, describe like the comp past it all would how you the noise, sort improved? months, I fighting over guess, of

Richard Galanti

a you same. of some than my you few has and -- the have guessing less Sam’s closings, guess take that take say, I’m think well, proportionately little would did I of I out been increase from picked international don’t year difference of a me. weeks, we up closings, Sam’s out fee the a in we XX the benefit couple the we about of front if the and of units. up a the ago, units less I opened

things way So, a all were little another. those tweaking one bit or

to impact transitions renewal us U.S. and the after the in cards improve, about finally Canada the I rates makes have our think of credit pretty the that fact of good overall, continue feel it. improved and

Christopher Horvers

question, currently you many that an to cardholder with the U.S. give entered in last cardholders have you how could compare then, does when us how perspective? Visa AmEx from in And and you

Richard Galanti

not front could -- that I have That don’t -- I But, the It continues of in it just card, the me. I XX-XX don’t tenders is high Visa, co-branded Visa. in grow. U.S., to XX%, our the in is Costco Visa co-branded approaching that total And just XX-XX. believe in continues that number number it’s be XXs. of front me. have probably grow. to

a earlier signups. Costco of we’ve of Visa not then, on monies, We about and of or talked somebody then that great investing And continue done at card, terms -- really in get price, you item, XXX holidays, buy coupon, use to the And that’s things it’s I when you with it’s television, in sees on done some some we’ve can high-end MVM when you things already like when Citi some your value that think get it’s on but something every bucks card if worth. those at another only off. over it’s cash promotional not and top the a of

that are we’ve that used for. of those so, And kinds things

Operator

question the your Edward from Kelly. And of comes line next

Edward Kelly

reflect thinking norms. maybe around guess I single kind the comps ago and above wanted U.S. think driving incremental historical And I a is the you just could talk are that historical mean? which you I what is is a if know, the you had I to think I long I what Can bit mean think how about guess, impressive about? just in call timing strength? don’t had. then, would and It should low the about, one-off. like you be of mean, about XXXX what reversion now you slowed digits even Rich, real you And that relevant that we comps what wasn’t complements. run -- now to But, ask to little the on seems

Richard Galanti

became -- little you or will, if of all few XXXX, the over bought I to -- another, were card was Well, went network we non-cards card in conversion AmEx a changed one AmEx Costco, from Any a different auto cards auto Look, MVMs we or when add-on we where days have those never greatly got the that a had we our was went card, renewal of also bit whether Delta to just lost shopping under renewal. the know, old did renewal. promotional people auto using program by that I opted and number all to some those those ourselves credit off. to auto we a the months changed hurt quarter were one, don’t and of a reduced of in -- a hotel card and at the where card Starwood were. all it card, credit that There’s to member -- lot things that Members over back renewal. those auto when on we renewals -- up acquirer, one the you switched it

think we’re we’ve think of the and Picks some addresses that into proud Buys also of collecting some with email number Buyers’ greatly and that the year. fact I up done we that Hot addresses, I of things is email that again tied have. of So, ‘XX the we’ve increased

Some along? at did, didn’t all why that. we’re from We who look you not this benefiting do and it, say,

But So, the every is new all those norm day have for us. And things hopefully, I think helped day. while. continue a will a

Edward Kelly

growth. started e-commerce year on back circling strong. the just then, you And Obviously,

et can way grocery something, ramping the how your margins are to is slowed. talk that expectations, actually Richard, about bit it it at You’d Did did? and metrics people about to size, you mentioned there when cetera? same-day, that you any being relative the little slowed share And two-day, can all that it surprise basket that disappointed relative

Richard Galanti

‘XX. if I our prices. added I really then, X.X in that communicate sustainable. we better brands have, in a still look communications or the four not done enjoyed was bit because low-hanging when And for that But, think people, fruit rates good from little tools merchandise is lot comp this going the had up ‘XX, years, that incredible and on a frequency think the I new achieved at of, you ‘XX, it’s we terms great ‘XX for our like we X.X renewal we as that when I said, things shopping on is we’ve of we I remember, merchandising two-year benefiting slowed it. stack run first Well, to and remind average mean, that this say when with wise, lower X.X, lot members, ourselves. the or a historical it’s colleagues can just the of low things my from one end top after at frequency there to are we’ve from a bit, remember a slowed of at little of had

We I have continue. still should lot think buckets of that a here.

Edward Kelly

that I meant at slowdown we’ve what the the year, surprised you there and has two-day… small growth, e-commerce comp, like e-commerce seen started that and recently relatively on has we how all, how

Richard Galanti

and number XXs business what to feel that And of say very as you. -- back sell feel direction we are new to at e-commerce are lot the from a good to a haven’t. very to if we’ve on two-year funds in we We willing low things I’ll we’re slowdown, expand through to come well, slowed it. got that doing. stack brands The in you about We number. that a low us And mid have will, the well. good there went to about XXs it. still historically We think drive bucket of, lot a

a things that and we’re those on is doing to We opportunity that all want lot our finding buy is help. But, But, it. there the focusing company we’re a way. don’t biggest I go need do. of we to in out the So, we’re us some focusing think things thing of for

Operator

question Mushkin. Scott And your next comes from line the of

Paul Kearney

Paul Kearney Scott. This is on for

going business going current share of today. growth wallet are on share, divide is Where the with And new in biggest what’s it forward grow acquiring growth of you of coming And had your do question new terms markets? opportunity members Thanks. growth your wallet Just customers? from you to customers? is you coming from, think in from unit a coming share also it most and continued forward is if wallet to where also, or

Richard Galanti

we don’t is of lot a know We are there the add up. sale members, asked we we shopping Look, are our speaking, example We continues -- now a foods, gas our we grow are a membership. fresh it’s both the success things impact frequency an that that improve; job gets the frequently. emailing is did of in strength up; it’s help generally of that three better to with you. when which parking new lot sales, all lot in have fill we’re stations, think members when more or is two executive which we I feel a And our doing our what average loyal you and big there that generally and know, lot; question

Hot our say, think merchandising I have merchandise our Buyers’ would low and head all as But, things some at so, of as helped it’s prices, Picks helped. these Buys have those well. and And great of

Paul Kearney

tell. more and you clubs follow-up, are early trends any quick maybe one membership using in heavily And your seeing too Instacart. for that it’s Thanks. Great. But, changes to like are

Instacart in memberships is any non-members uptick delivery to Thanks. for clubs? those leading So, for

Richard Galanti

others and -- is Instacart and big and like Instacart one. the others, third parties Shipt

for reduce some by shopping key big good sure they’re using them of frequency then, within annual though group relationships not -- this When a have nicely. to them. Costco it’s valid, them is part looked a Instacart, our and a of But, several. us -- we you And them we some it’s of start their members way of that any still of small have shops they still it, statistically group basket few discerned They pretty making but we and who fill loyal. have when occasionally. average growing into may Costco like had to and of increase difference We then The with take will is a there. loyal using at And this anecdotal, group -- not you looked in, it. some get and are characteristics

we’ve that point. entirety small and increase population in far, its this in seen it’s a but at so it’s very And strong net a very size

Operator

line question comes from next Your Scot of Ciccarelli.

Jonathan Livers

for on Scot Thanks taking Jonathan Livers Richard. Hi, for Ciccarelli. question. This is my

to e-commerce what and a vendors? up is investments shipped as Just you’ve us still sizable tell as focus by continues Could shipped well putting you and guess percentage question be pretty stores growth. I e-commerce impressive made a it on there versus of

Richard Galanti

done directly warehouse. Very Very at fulfillment is is little from mean, to us, if the warehouses, the not our little centers. e-commerce I us just -- shipping XX% but

Jonathan Livers

Okay…

Richard Galanti

only our business way, two-day the it’s center by the And with dry.

Operator

question next line the your Chen. of from Oliver comes And

Oliver Chen

Richard. Hi,

have percentage speaking awareness becomes drive and that of seems e-com main what that it the bigger are are drivers opportunity? in what a as your pursuing prioritize the the e-commerce, you’re but your would And to margin initiatives you there? you growth Regarding kinds of about impact main this, of -- as main business, terms dynamics total big been a of how the the like

Richard Galanti

the to well, e-commerce Again, we we a categories, fiscal items said some and benefitted or ticket related want from goods some mortar. and We’ve the foremost, wanted first big of [ph] as our facility. taking And get go way, our is into certainly too, that members doing brick could the and then We way. over to also don’t out tried figure that. how do provide and savings e-commerce see we e-commerce it delivery to to activities certainly big is in ticket like before, we way there some in -- white and but

plenty not still online, is we want within fruit. miles. there Costco And, think low-hanging unless I get is So, comfortable at at there Costco of don’t a XXX just to shopping

Oliver Chen

that major from Richard buckets And we will what the next think year, Okay. unfold? how for a for about some and how are should perspective of CapEx modeling

Richard Galanti

we that’ll like new be the everything. of more on lot two-day the extent year are We’ve all chicken fulfillment Well, some a And e-commerce, foremost, mean, first to there of small IT equipment couple but than we whole need is the more, be general. I few-hundred do. few would which money. we’re extra. a extra things the the expensive things have is -- fiscal to big a and guess, and -- And cheapest international, some ‘XX package plant frankly really But before money I lot and where chunk north would -- is of of and it’s manual what’s the got be from it’s savings warehouses. delivery, we we doing money not is was $XXX spending is acreage; chicken plant, expended million, and just of The in a started facility fulfillment that e-com the to the the a us. more activities those

Oliver Chen

Thank helpful. you. That’s

Richard Galanti

speakers] a So, extra few things. [Multiple there’s

in very ish, would number still X… the be the think, high-Xs I low

Oliver Chen

that in depth? making the lastly, And now? it important and with the it pretty to it’s sure with I multi-vendor-mailer. Okay. state know, the right an Is place? respect you’ve and been about Are sufficient document, pleased of breadth it’s you thinking

Richard Galanti

XX-plus-percent by than total it’s offerings by -- once a Well, value works the that year I and MVM warehouse taken a item than of frequency and in half when warehouse, also, by increased more we that back, you positive, the not of number get the to we hurt that want days we’re in that and we changed in which of the -- think, the we’ve it. reduced fact definitely number the and every some way. pleased. MVM we’ve Other ago, an what Remind nine of terms same items net months of those in working the changed is out

and Sometimes Picks. the change of some these or shake way little it take it we’ve value proposition; have out got bit Hot Buys stale; the we the items sometimes to to MVM that with been sometimes it in do different Buyers’ and a regular up get

more. added working, way arsenal and a -- still a it’s to some the in we’ve little bit, evolve think still it’ll I So, it’s but

Oliver Chen

And we’re backdrop -- such what on do tariffs how interplay, great Like, contribute factors will such may that you have in are consumer that thoughts a with risk your because currently? to we believe confidence?

Richard Galanti

given take set, item just expensive you item, an discretionary a that as on patio using using basis, an I’m Look, like when have an example.

down, goes some giving there’s savings. great the way, on I’m pork thing third like thing it are I pork exported nuts; you just going to this the going is have there’s something opportunities. Therefore, where the soybeans, to U.S. with items remind to anecdotal -- few probably. with because less a a that’s pork other some creating That’s examples. examples a side prices going believe. food are I same China; change? you, Same way You’re demand -- Is of of changed. that

-- smarter to it and everybody So, win -- I tariffs don’t people lose How me like some. think you’re impacts going some than feels them. that

negative better a probably it can we And others. negative. is, weather so, than small it it’s whatever Certainly, bit

Operator

next the of Your Melich. comes from Greg question line

Greg Melich

was had But I the and grown of gallon a Hi. case? Thanks, One improve? couple it what want did obviously, penny see I It just from sounds the quarter, on questions. gasoline, Richard. like But was profit growth if to actually did. that’s lot. the a

Richard Galanti

The gallon XX%. or the low-double-digits, XX% were increases in

Greg Melich

it. Got

Richard Galanti

I be to high gas got well. as That’s But the the Which singles. new U.S. stations also compared huge think is comp, to the in it’s economy.

Greg Melich

stations And of there new a number have? them, how at you clubs is penetration that many are -- I most right, have the you mean, can

Richard Galanti

so can. Well, are not. new than we’re still more openings internationally, getting adding up we And

or with took it the to land, here say the in center. occupied gas; we’re I’m good in generally A into Costco we turned going and and few. XX Teterbor XXXth the not one and guessing can where neck business think, constrained have would moved the is bells of Drive. stations. example XX,XXX the to do. your Japan, Street But Hackensack woods maybe I old where And X X, parking, we certainly we in is Hackensack East Teterbor, square saturated at -- we we station speaking, the then where Mexico, relocate, way. with so, gas have larger there with U.S. a is here got that Canada a more Australia with some; a a lot better and and with we we gas we’ve whistles feet and all few adding are few locations and with

Greg Melich

top how is I of it back it’s And of then, correctly, the sort be more if being the this much my of on would used any getting benefit of math Do cobranded card the the coming them If the of update XX% of therefore, Costco, the usage outside using is follow-up now you on more of remember part to on did club. to use and club? loyal the in card, in terms people then, getting member right, tender wallet have the much everywhere. that upper how and of your card sort and a of I

Richard Galanti

We But information. I’ll we’re just do do. say, that have not… yes, we

Greg Melich

I the is where was with I -- to above? say, it it AmEx, guess it or back same is Is Okay. what would

Richard Galanti

think I bit it’s a quite above.

Greg Melich

very… Quite above. That’s a bit

Richard Galanti

can It fact use be places. continued it to is of part more grow. And actually, the at that keep in that mind,

of we you than use get to today if have So, -- wallet, whichever of did cards it top was before. potential you those your more

Operator

next Matt Fassler. your And comes from line question the of

Matt Fassler

My first of question relates to moving SG&A, kind couple of pieces.

First of all, by than discussed overwhelming it an percentage you increase. the not so drove looks the like the a wage bit increase higher points, probably less that SG&A

year-on-year expense the profile of I you ago. benchmark to trying of you a week call back the think and Just the extra that last year’s exclude when year about on I extra the week. increase weren’t factor terribly granular went

How we think the in wage average increase slightly the about seems as like at week an week? accelerated the -- might don’t that the So, with expenses going a that the was because get a that you for there it’s extra for increases. extra had week SG&A clearly -- year to increase would carried rate have apples-to-apples are ago,

Richard Galanti

little, of to said, virtually kind similar is what people expenses, if any, nothing. There

and it There weeks so and question? an free by extra it response the was of allocated. took the expense What we of there. at part and for the are do of year, a year, the like It’s was we other end the it. a fully week week not nothing number don’t. We days if an or divide the had annual by So, the

Matt Fassler

No.

I think that you got one.

Richard Galanti

wage a At that, announced of In reform. tax somewhere we the to be the did we it the related increases to to year. million between terms was going $XXX time million $XXX

Matt Fassler

And so, given I the guess, in partial impact June implementation… QX here

Richard Galanti

of June quarters weeks was XX-week, was XX normally it this. -- about a a is QX XX not was even it Right. -- XX-week quarter, three XX was the about -- though XX

Matt Fassler

Secondly.

some receipts else in inventory bit did Was tariffs. to frontloading of anything and a it or was in Your inventory speak moving anticipation that increase higher the direction? factor, a that

Richard Galanti

our And it it’s by currently look the little delivery-related some inventory that of choice. I is When a increased but volume I year-over-year you of particularly little what A e-commerce thing and at items. is electronics higher, is just mentioned. category-wise, the levels, in think, -- list we it have last of

Matt Fassler

of or where quarters you more more cobwebs to the level or finally, the the after we cobwebs so shaken of think some we’re card to Have best transition, have third to move and even where the emerged is it for now? there’s in kind room off you XXXX, in to seem do of credit so we off rate and that sort of then, I Canada renewal in guess plateau? on do you And the the nine guess -- your rate. we’re period renewal rates, higher back And the here are that I so worldwide shaken back quarter at was likely U.S. think

Richard Galanti

royalty by knows? to those [ph] that tenth what period we’ve there’s of in think done Who the a -- an brand good or four we one hands. little of either some and LivingSocial feel When I we’re in that; up little get four rate I impacted or or and do in them you’ll have on XX-day rounding the like like not. It five we or next XXX,XXX royalty, anything think definition your extra depends about would years, now XX-day members renewal the a lower things last doing or down. period

that And it hurts little little helps a bit. later you you bit. that anniversaries a a and So, year

when XX -- in So, the new. things Australia, those still country its the taking of of I average rate, at it’s underlying, really locations, at is like and there’s look But, look XXs, that. but little lots like it’s renewal seen company rates a maybe. of which we even age locations the for last we’ve relatively I look four week, is at with the the four which because years, improved and each there is, in this countries. And what other its I know years, rate the consistent next last am renewal has going what, I in four years-ish, consistently The only

bellwethers and the So, U.S. these so locations the so far in are we’re age Canada good. of the where of are average mature, I course and think XXs,

Operator

Peter of Benedict. line from comes question next your the And

Peter Benedict

just heard just Richard, you I Hey, make clarification a CapEx. want sure on right. to I the

the about So, guess increase CapEx this think Is that it driven we the it? high-Xs, low-Xs plant. part maybe of incremental year, chicken way with should the I by

Richard Galanti

above X that or year, Yes. the this come right maybe we’re million Typically, we $XXX million fulfillment. we the beginnings were so budgets plant, million chicken things believe own I internal out. our $XXX and $XXX above, of includes X.X, at where with are additional to doing

in -- X.X X.X to So, X.X from think range, I we’ve to think range. or I high graduated to something X.X the overall, Xs

Peter Benedict

fourth have you quarter CapEx Do number? the

Richard Galanti

Not the couple K yet. It of will weeks. be in in a

Peter Benedict

Okay.

this when international your But will pipeline is you openings, openings, than for thinking openings account club said of Is you be got longer. where be U.S. clubs a in said are years going down non-U.S. a road? XX% you take of internationally, the there the a to about more bigger year should couple we the On half the they timeframe that

Richard Galanti

you years road. ago, me the it’s I asked If had of say years couple would around three

the If I wrong years back big in somebody -- have finding we There -- to in said today, in a it’s town. further. me more two you could around opportunities else also those we’re success not year there the do you road, there that and surprised we would’ve cities today, it’s already of the been by a is in to go going that is we that probably ago, and And if We pipeline. always XX U.S. have more examples. some there. asked plus to we’re go of three-year by definitely be not But the we’re

So, -- or I now four years two ultimately years I -- from what from we now. don’t is, it years whether or think three international it’s know

Peter Benedict

get yours just label to brands, are an And in then premium and others’, your year? Okay. Last and of private white which for you was the around question goods beyond XQ kind for up both penetration ability categories what incremental brands? seeing step the

Richard Galanti

give But can’t latter to new to in further goods those continues, you some get some extent. items brands, apparel of number. terms between, It are cosmetics, specialty food but fewer the ability and sporting

Operator

comes next And Bania. the line your of Kelly question from

Kelly Bania

Wanted of about online? with what about questions, are kind sales, my renewal just X% the just taking rates And your really members engaging curious Richard. for Thanks of ask in with guess connection e-commerce of to I Hi. question. now -- percent

curious As those online, similar look that or at engaging they renewing influence you could are the how rates rate just are rate, renewal higher a at time. members that over

Richard Galanti

members. dramatically in many smaller have It’s tried how increasing a but our disclose don’t because we past. base, the from of We

often Visa member Star is with you online, I it of the warehouse their is loyal -- member. An guess As they are Executive that who using Executive than in of online, somebody more that’s more it more guessing, relates online loyal a that. when the come if more more I’m don’t that’s to they beyond somebody using is a spends head. would off and my that, comes than frequent, I groups from more just member know Gold the know I Citi card top and things. using to loyal other and respective than those But, addition got that

Kelly Bania

spend think towards for? And I clarification you is the exactly what two-day program. on Okay. going just the CapEx, mentioned there I that some guess, delivery

Richard Galanti

those There of Well, is additional business the seven building of including what their greatly will to that’s the fulfillment. the that to most customers. mileage I traveled give in some fees relative centers reduce that the geographies UPS -- business centers of delivery with in will to two-day a -- to the current expenditures couple some about e-com be outsized is call has packages

Kelly Bania

wages. last maybe Okay, just got one one it. on And

and that, to plan you years? pressure see from if investments. curious announcement to from the going broadly been couple this making $XX, Amazon obviously speaking, or with over But You’ve week next go more of the just you how

Richard Galanti

top mid-XXs employee the XX.XX, here basis who’s can increases raised our all, give into level wage of is XX our in of to low at $XX in related starting up over years tax first the the Even Well, of time, of health an -- though we’ve the to past benefits. year wages to year. to number the scale over We hourly the reform. United get an entry of and mid-XXs States $XX.XX top every equivalent the on great been on

of Employees country, top example. we it. necessities. five retail starting which Bay believe around of two is the geographies good wage I roughly, we end takes we already about before started U.S. time Area are. see other or by mid-XXs, very the it any the the feel of entity about basis, a a And there you’ll to pressure above think average even Parts in years out XX.XX, we I base more would we at were scale. it the day, where And get dwarfs our So, are scale. full tranche on above be some about type And the hourly to on on because believe at that XX.X a that. an retail today raised that the of We there way, or

Kelly Bania

Thank you.

Richard Galanti

One more question.

Operator

Bugatch. comes the question from last your And of line Budd

Budd Bugatch

call. on on Richard. Thank e-commerce. taking the and Hi, you have for just on question answered, the Most for but give you you number? thank this have impact that us lasting Can the e-commerce my comps? long of Do questions been we

Richard Galanti

the sorry, I’m comps?

Budd Bugatch

on impact impact it Yes, does comp? comps? How e-commerce basis many the points

Richard Galanti

range. XX basis-point the in somewhere XX It’s or

Budd Bugatch

Okay. Thank you. And…

Richard Galanti

XX X. not and It’s north of it’s

Budd Bugatch

Say again.

Richard Galanti

points basis it’s XX of below XXX. not and It’s

to it’s think I So, high. mid

Budd Bugatch

about of and Is distribution? what the What bit like? the signups And of your age younger, age? can membership little you signup, talk a reducing, does average the look members about demographics it getting by

Richard Galanti

the the they Xers you or up. way whatever Zs called people whether But, Gen before are or called we what very were these by about sign generally that, signups. Well, they feel Gen good that’s

up, people What seen. of the other consistent very which the younger is I we’ve low-XXs in in think, question? with part we’re what high-XXs signing terms of or the was

Budd Bugatch

That was on impact pace? just the the

Richard Galanti

to people we went since in That member I average I our haven’t XX. that a told that seen was to find from need out the number that myself. U.S. ago. years XX

Budd Bugatch

last the you And Is that there? U.S., strength there of can might about you e-commerce on the activity Okay. e-commerce. see the talk outside and

Richard Galanti

have U.S. And and UK, benefit because Taiwan that than elsewhere. big Well, -- countries And next biggest e-com do a together of online over think we’re we starting that. And others. half, I that planned. other Mexico, seen I U.S., had combined the in buying Korea. I We’ll the very think and dwarfs and other works. two years year ago. off benefit nicely base, Canada, business we’ve the we probably it And line But, and small a in taken from markets. where other it’s the two it’s growing frankly in had of

Budd Bugatch

Okay. Good on period. very you luck on much. next Thank that the

Richard Galanti

Thank you very much.

Operator

call. today’s concludes And this conference

now You may disconnect.

Costco Wholesale (COST) 5 Oct 182018 Q4 Earnings call transcript