Costco Wholesale Corporation (COST) has reported a 5.68 percent fall in profit for the quarter ended Feb. 12, 2017. The company has earned $515 million, or $1.17 a share in the quarter, compared with $546 million, or $1.24 a share for the same period last year.
Revenue during the quarter grew 5.67 percent to $29,766 million from $28,170 million in the previous year period. Gross margin for the quarter contracted 24 basis points over the previous year period to 12.90 percent. Total expenses were 97.16 percent of quarterly revenues, up from 96.96 percent for the same period last year. That has resulted in a contraction of 20 basis points in operating margin to 2.84 percent.
Operating income for the quarter was $844 million, compared with $856 million in the previous year period.
Working capital turns negative
Working capital of Costco Wholesale Corporation has turned negative to $1,400 million on Feb. 12, 2017 from positive $96 million on Feb. 14, 2016. Current ratio was at 0.93 as on Feb. 12, 2017, down from 1.01 on Feb. 14, 2016.
Cash conversion cycle (CCC) was almost stable at 3 days for the quarter, when compared with the last year period. Days sales outstanding were almost stable at 2 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 15 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 14 days for the quarter, when compared with the previous year period.
Debt moves up marginally
Costco Wholesale Corporation has witnessed an increase in total debt over the last one year. It stood at $5,072 million as on Feb. 12, 2017, up 1.95 percent or $97 million from $4,975 million on Feb. 14, 2016. Total debt was 14.24 percent of total assets as on Feb. 12, 2017, compared with 15.36 percent on Feb. 14, 2016. Debt to equity ratio was at 0.40 as on Feb. 12, 2017, down from 0.44 as on Feb. 14, 2016. Interest coverage ratio deteriorated to 27.23 for the quarter from 27.61 for the same period last year.
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