Costco Wholesale Corporation · NASDAQ:COST
Costco Wholesale — Shareholder Meeting (January 2024)
102 slides from Costco Wholesale's shareholder meeting presentation, Jan 18, 2024
Slide 1: Annual Meeting of Shareholders January 18, 2024
Annual Meeting of Shareholders January 18, 2024
Slide 2: Hamilton E. James
Hamilton E. James Joined the Board in 1988; Chairman of the Board since 2017 Chairman of Jefferson River Capital Former Executive Vice Chairman and President / Chief Operating Officer of The Blackstone Group
Slide 3: Board Members
Board Members
Slide 4: Susan L. Decker
Susan L. Decker Joined the Board in 2004 CEO and Founder of Raftr Formerly President and CFO of Yahoo Director of Berkshire Hathaway Inc. and Vail Resorts, Inc
Slide 5: Kenneth D. Denman
Kenneth D. Denman Joined the Board in 2017 General Partner at Sway Ventures Formerly President and CEO of Emotient, Inc. Director of Motorola Solutions, Inc. and VMware, Inc.
Slide 6: Helena Buonanno Foulkes
Helena Buonanno Foulkes Joined the Board in 2023 Former CEO and Director of Hudson’s Bay Company Former President of CVS Pharmacy Director of Skillsoft Corp.
Slide 7: Richard A. Galanti
Richard A. Galanti Joined the Board in 1995 Executive Vice President and Chief Financial Officer Former Director of the Federal Reserve Bank of San Francisco
Slide 8: Sally Jewell
Sally Jewell Joined the Board in 2020 Secretary of the Interior under President Barack Obama Former Chief Executive Officer and Director of Recreational Equipment, Inc. Director of Symetra Financial Corporation
Slide 9: Jeffrey S. Raikes
Jeffrey S. Raikes Joined the Board in 2008 Co-Founder of the Raikes Foundation Former CEO of the Bill & Melinda Gates Foundation Former President of Business Division at Microsoft
Slide 10: John W. Stanton
John W. Stanton Joined the Board in 2015 Chairman and Managing Partner of the Seattle Mariners Chairman of Trilogy International Partners and Trilogy Equity Partners and Director of Microsoft Founder and Former Chairman and CEO of Western Wireless Corporation Former Chairman and CEO of T-Mobile USA
Slide 11: Mary Agnes (Maggie) Wilderotter
Mary Agnes (Maggie) Wilderotter Joined the Board in 2015 Former Chairman and Chief Executive Officer of Frontier Communications Chairman of the Board of Directors of DocuSign and Director of Sana Biotechnology
Slide 12: Ron Vachris
Ron Vachris Joined the Board in 2022 CEO since 2024
Slide 13: Craig Jelinek
Craig Jelinek Joined the Board in 2010 Former CEO (from 2012 – 2023)
Slide 14: Former Board Member
Former Board Member
Slide 15: Charles T. Munger
Charles T. Munger Joined the Board in 1997 Served until his death in 2023 Vice Chairman of the Board of Berkshire Hathaway Inc.
Slide 16: Annual Meeting of Shareholders January 18, 2024
Annual Meeting of Shareholders January 18, 2024
Slide 17: Expansion Today
Expansion FY 2023 Warehouse Count Beginning: 838 Openings: +23 Ending: 861 Today: 872
Slide 18: Queen Creek, AZ
Queen Creek, AZ 1/26/2023
Slide 19: Pudong (E. Shanghai), China
01/26/2023 Pudong (E. Shanghai), China 3/10/2023
Slide 20: Gunma Meiwa, Japan
Gunma Meiwa, Japan 4/26/2023
Slide 21: Longmont, CO
Longmont, CO 5/4/2023
Slide 22: N. Tulsa, OK
N. Tulsa, OK 5/25/2023
Slide 23: N. Tulsa, OK Market Delivery Operation
N. Tulsa, OK 5/25/2023 Market Delivery Operation Big & Bulky Items
Slide 24: Yinzhou (Ningbo), China
Yinzhou (Ningbo), China 6/20/2023
Slide 25: Gold Coast, Australia
Gold Coast, Australia 6/22/2023
Slide 26: Kadoma, Japan
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Slide 27: Hangyong (Hangzhou), China
Hangyong (Hangzhou), China 8/26/2023
Slide 28: St. John Business Center, MO
St. John Business Center, MO 10/24/2023
Slide 29: NW Toronto (Islington), ON
NW Toronto (Islington), ON 11/2/2023
Slide 30: Scarborough, ME
Scarborough, ME 11/17/2023
Slide 31: Recent Warehouse Openings
Recent Warehouse Openings Kyle, TX 03/30/23 Buckeye, AZ 07/13/23 Georgetown (N. Austin), TX 07/14/23 NE Denver, CO 07/19/23 N. Canton, OH 08/17/23
Slide 32: Recent Warehouse Openings
Recent Warehouse Openings Clermont, FL 11/14/23 Hendersonville, TN 11/15/23 Stockbridge, GA 11/16/23 Newark, CA 11/18/23 Noblesville, IN 11/21/23
Slide 33: Recent Warehouse Openings
Recent Warehouse Openings Marysville, CA 11/22/23 Eau Claire, WI 11/30/23 Shenzhen, China 01/12/24
Slide 34: Costco Today
Costco Today • 3rd largest global retailer • 12th largest in Fortune 500 • $291 billion market cap* *As of January 5th, 2024
Slide 35: Costco Today
Costco Today • Sales $238B – FY23 • 126MM sq. ft (147K / whse) • 316K employees worldwide
Slide 36: Costco Today: Warehouses Worldwide
Costco Today 872 Warehouses Worldwide 600 - U.S. 14 - Taiwan 108 - CN 6 - China 40 - Mexico 4 - Spain 33 - Japan 2 - France 29 - UK 1 - Iceland 18 - Korea 1 - New Zealand 15 - Australia 1 - Sweden
Slide 37: Costco Today: Members and Renewal
Costco Today (as of November 26, 2023) • 72MM member households • 129MM cardholders • 90.5% worldwide renewal rate • $4.7B in membership fees (LTM)
Slide 38: Fiscal Year
Fiscal Year (in MM’s except for EPS) 2022 2023* Sales $222,730 $237,710 Net Income $5,844 $6,292 Diluted E.P.S. $13.14 $14.16 *53 week Fiscal Year
Slide 39: 1st Quarter
1st Quarter (in MM’s except for EPS) 2023 2024 Sales $53,437 $56,717 Net Income $1,364 $1,589 Diluted E.P.S. $3.07 $3.58
Slide 40: Comp Traffic (Frequency)
Comp Traffic (Frequency) FY’09 –’19 4.1% FY’20 0.9% FY’21 7.0% FY’22 7.5% FY’23 4.8% FY’24 – Q1 4.7%
Slide 41: FY'23 Global Apparel Sales +9%
FY’23 Global Apparel Sales +9%
Slide 42: Jewelry
Jewelry 530K Carats of Diamonds sold Globally
Slide 43: Beer, Wine, and Spirits
Beer, Wine, and Spirits FY’23 Global Sales +4%
Slide 44: Produce
Produce FY’23 Global Sales +9%
Slide 45: Bakery
Bakery FY’23 Global Sales
Slide 46: Meat and Seafood
Meat and Seafood FY’23 Global Sales +7%
Slide 47: Service Deli
Service Deli 137MM Rotisserie Chickens Sold Globally in
Slide 48: Merchandise Highlights
CosTco Merchandise Highlights
Slide 49: New Brands
COsTS2 New Brands DB. sume F PAMP ts solo stove eee | Travelpro" popptr purer +> PRIME “pu rple CONVERSE fae
Slide 50: Tire Member Installation Value
New TireMember InstallationValue Included
Slide 51: Kirkland Signature: Quality and Value
• We control the quality, value for our members • Ability to build/create a better item • Innovative packaging, clean ingredients, full traceability • Ensure global supply for our future • 20% value to the national brand • Continuous innovation
Slide 52: Kirkland Signature
Kirkland Signature Peanut Butter Lemon Meringue Lemon Blueberry Loaf Chocolate Cream Pie Cheesecake Sell Price: $8.99 Sell Price: $19.99 Sell Price: $19.99 Value to Brand: 40% Value to Brand: 84% Value to Brand: 75%
Slide 53: Kirkland Signature
Kirkland Signature KS Ultra Bath Tissue KS Spring Fresh Sell: $21.99 Laundry Scent Beads Value to Brand: 27% Sell: $13.99 Value to Brand: 22%
Slide 54: Kirkland Signature
Kirkland Signature KS 40” Round Bolster Bed KS Logo Pet Hoodie KS “Duke” Bed Sell: $42.99 Sell: $13.99 Sell: $49.99 Value to Brand: 61% Value to Brand: 39% Value to Brand: 38%
Slide 55: Kirkland Signature
Kirkland Signature KS Lightly Breaded Chicken KS Breakfast Sandwich 8 Count Chunks Sell: $15.99 Sell: $13.99 Value to Brand: 67% Value to Brand: 22%
Slide 56: Kirkland Signature
Kirkland Signature KS Prosecco DOCG KS Mimosa KS Prosecco Rosé Sell: $7.99 Sell: $7.99 DOC Value to Brand: 38% Value to Brand: 30% Sell: $7.99 Value to Brand: 11%
Slide 57: Kirkland Signature
Kirkland Signature KS 3pc Yellow Golf Ball – 24 KS Driver KS Iron Set Count Sell: $199.99 Sell: $499.99 Sell: $27.99 Value to Brand: 67% Value to Brand: 64% Value to Brand: 75%
Slide 58: Kirkland Signature
Kirkland Signature KS Men’s Jean KS Ladies Straight Fit Jean KS Ladies Skinny Jean Sell: $17.99 Sell: $17.99 Sell: $17.99 Value to Brand: 74% Value to Brand: 83% Value to Brand: 87%
Slide 59: Global Treasure Hunt
Global Treasure Hunt Pulmuone Korean Corn Dog CP Tom Yum Wonton Soup Noel Spanish Tapas Tray Papouis Halloumi From: Korea From: Thailand From: Spain From: Cyprus Astruc Pastry Tray & Meringues Sacla Arrabbiata Pisti Almond Cream Wuliangye Ver. VIII From: France From: Italy From: Italy From: China
Slide 60: Costco Online Regional Websites
Costco Online Regional Websites U.S UK Canada Taiwan Mexico Korea Australia Japan
Slide 61: E-Commerce
E-Commerce • Expanded Selection Year Round • “Treasure Hunt” • Delivery & Installation of Big & Bulky Items • Same Day Grocery Delivery • Exclusive “Online Only” Selection & Promotions Complement To The Core
Slide 62: Grocery Online
Grocery Online Options CostcoGrocery KIRKLAND 2-Day Non-perishable food & household essentials delivered. owaredby CostcoGrocery Yinstacart CostcoGrocery
Slide 63: Exciting Merchandise
Exciting Merchandise Michael Jordan Autographed Mickey Mantle Autographed Le Creuset 157-piece 1984-85 Star Rookie Card Rookie Card Cookware Set #195 Sell: $249,999.99 Sell: $4,499.99 Sell: $24,999.99
Slide 64: Gold & Silver Bullion
Gold & Silver Bullion 1oz Gold Coin 1oz Gold Bar 1oz Silver Coin Canadian Maple Leaf PAMP Lunar Dragon American Eagle (20 pk) Average Sell: $2,049.99 Average Sell: $2,049.99 Average Sell: $549.99
Slide 65: One Of A Kind
One Of A Kind 5.03ct Pear Shape 4.04ct Round Brilliant 9.11ctw Cushion Cut Diamond Solitaire Ring Diamond Solitaire Ring Fancy Yellow Diamond Ring Sell: $259,999.99 Sell: $159,999.99 Sell: $142,999.99
Slide 66: Gift Cards & Tickets Online
Gift Cards & Tickets Online Southwest Airlines TopGolf Disney $500 eGift Card $100 eGift Card $250 eGift Card $449.99 $79.99 $224.99
Slide 67: Why Buy at Costco?
Why Buy at Costco?
Slide 68: Our Online Price Includes
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Slide 69: Costco Logistics
Costco Logistics ● Service level improved from threshold to room of choice or white glove ● Nationwide distribution and delivery network reduces days to deliver ● Reduced cost of delivery translates into lower member prices ● Expanded ‘Big & Bulky’ categories
Slide 70: Costco Logistics
Costco Logistics • 3.6MM deliveries fiscal year 2023 • 10 middle mile distribution centers totalling 10MM square feet • 121 final mile delivery facilities including AK, HI, and Puerto Rico • 9 final mile facilities attached to warehouses • ~725 home delivery trucks delivering six days a week with an
Slide 71: Costco Logistics
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Slide 72: Mobile App
Account Jane Donut EXECUTIVE Membership #1234567800 Add Payment ] Your dig membershio ead cannot be used at Costco food courts at his time. Orders and Purchases View Order Status & Manage Orders and Returns Inbox @=> View Messages My Wallet Manage Payment Methods @ 88 8 ye Explore Shop Account Warsh
Slide 73: Mobile App
Mobile App 2023 - Features Released ● Star Rating Prompt ● Search + Typeahead Updates ● Inbox (for push notifications) ● Warehouse Locator / Details Updates ● Same-Day Shopping Improvements ● DMC + Account Combination ● Shop Menu Updates ● Tutorials ● Savings Landing Page Updates ● Navigation (heade
Slide 74: Costco Next
Costco Next Get more of what you want with… Exclusive Members Only Values on an expanded selection of goods curated by our buyers, directly from brands that you trust Costconext.com or linkout through Costco.com
Slide 75: Costco Next
Costco Next Improved User Experience Search Bar Single Sign On Subscription
Slide 76: Home Video & Photo
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Slide 77: Business Centers
Business Centers 24 U.S. Locations 6 Canada Locations - Walk in / delivery for business members - eCommerce fulfillment – Online Dry Grocery
Slide 78: Pharmacy
Pharmacy 60MM Prescriptions Filled Globally in FY’23
Slide 79: Optical
Optical 9MM Pairs of Glasses Sold Globally in FY’23
Slide 80: Hearing Aid
Hearing Aid 818K units sold globally in
Slide 81: Food Court
Food Court 199MM Hot Dog & Soda Combos Sold Globally in
Slide 82: Gasoline
Gasoline Global Gallon Sales +7% in
Slide 83: Tire Center
Tire Center 11MM Tires Sold Globally in FY’23
Slide 84: Sustainability
CosTco Sustainabilit y
Slide 85: Sustainability Commitment
Sustainability Commitment Doing the right thing for our community and world Updated December 2023
Slide 86: Sustainability Commitment: Four Pillars
Sustainability Commitment Four pillars: – People & Communities – supporting the people impacted by our business – Operations - maintaining efficiencies in an environmentally responsible manner – Merchandising - strategically sourcing merchandise in a sustainable manner – Climate Action Plan – doing
Slide 87: Sustainability Commitment: Employees
Sustainability Commitment Employees • 316,000 employees worldwide • Premium benefits • Industry leading compensation – $29/hr average hourly wage in U.S. – $32+/hr for 10 year service clerk in U.S. • Benefits for full-time and part-time employees – 94% eligible in the U.S.; 97% of eligible employees
Slide 88: Sustainability Commitment: Communities
Sustainability Commitment Communities • 1% of pretax profit donated, over $75MM in 2023 • United Way, Red Cross, Children’s Hospital • Black Economic Development Fund - $25MM investment • Feeding America – $7MM in cash grants and 117MM pounds of food and other products donated • World Vision - $110M
Slide 89: Sustainability Commitment: Operations
Sustainability Commitment Operations • Remain efficient, low-cost operators • Expanding our “STAR” program globally to help us: – Remain in Compliance with regulations – Reduce Water Usage – Reduce Energy Usage – Reduce Waste – Reduce Emissions
Slide 90: Sustainability Commitment: Merchandise
Sustainability Commitment Merchandise • The 6 Questions we ask our suppliers: – Can you map your supply chain? – How are the people treated? – How are the animals treated? – How is the environment treated – with focus on water, forestry, and fisheries? – Is the best possible packaging being used? –
Slide 91: Packaging innovation to reduce plastic and carbon footprint
Packaging innovation to reduce plastic and carbon footprint
Slide 92: Mexico Bakery Sustainability - Soy Oil
Mexico Bakery Sustainability - Soy Oil Bakery Operations Changed from PET Bottle to Bag-in-a-Box Reduction in plastic: 440K lbs. annually Doubled Pallet Capacity
Slide 93: McKinnon 7 PC Fire High Dining Set
McKinnon 7 PC Fire High Dining Set (Packaging & Freight Savings in Transportation) 18 extra sell units per container 156 containers saved
Slide 94: Sustainability Commitment: Climate Action Plan
Sustainability Commitment Climate Action Plan - Continuous progress to reduce operational emissions (Scope 1 and 2): - Clean Energy purchasing and Solar programs - Energy efficiency - LED lighting - 36% kWh reduction - Better refrigerants and systems - Supply Chain Emissions (Scope 3) 20% intensity
Slide 95: Financial Position (MM's)
Financial Position (MM’s) Q1, FY’24 Cash, Equiv, & Short-Term Inv. $17,864 Property & Equipment (net) $27,168 Long-Term Debt $6,946 Stockholders’ Equity $26,147
Slide 96: Dividends
Dividends • Initiated May 2004 at $0.40 per year • Currently at $4.08 per year • Growth Rate 13% per year • $1.8B annually • Five special dividends in the last 11 years • ~$19.5B to date
Slide 97: Stock Repurchase
Stock Repurchase as of Fiscal Year End 2023 • Program inception – Fiscal Year 2005 • $10.8B total expenditure • 134.8 million shares retired • $80.22 average cost per share • $677MM in FY’23 (avg $504.68/share)
Slide 98: Expansion
Expansion New (net) FY’20 13 FY’21 20 FY’22 23 FY’23 23 FY’24(E) 31
Slide 99: Company Annual Growth
Company Annual Growth (Dec ’85 through FY’23) Net Sales 12.2% Net Income 13.2% Stock Price 16.9% S & P 500 8.8%
Slide 100: Annual Meeting of Shareholders January 18, 2024
Annual Meeting of Shareholders January 18, 2024
Slide 101: Slide 101
Slide 102: Annual Meeting of Shareholders January 18, 2024
Annual Meeting of Shareholders January 18, 2024
Costco Wholesale — Shareholder Meeting (January 2024) on 6ix