Costco Wholesale Corporation

ladies and gentlemen thank you for standing by my name is krista and i will be your conference operator today at this time i would like to welcome everyone to the costco wholesale corporation fourth quarter 2024 conference call all lines have been placed on mute to prevent any background noise after the speaker's remarks there will be a question and answer session if you would like to ask a question please press star 1 on your telephone keypad And if you'd like to withdraw that question, again, press star 1. Thank you. I will now turn the conference over to Gary Millertip, Chief Financial Officer. Gary, the floor is yours.

Good afternoon, everyone, and thank you for joining Costco's fourth quarter 2024 earnings call. I'd like to start by reminding you that these discussions 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, 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 these statements except as required by law. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with GAAP. Now, before we dive into our financial results for the quarter, I'm delighted to say that Ron Bakris is joining us for the call today. I'll now hand over to Ron for some opening comments.

Thank you, Gary, and good afternoon, everyone. Thank you for joining us today. As we turn the page on fiscal year 2024, let me make a few comments on our progress during the year as a whole. Throughout the fiscal year 2024, we will continue to execute on our strategy of growing the top line through delivering the highest quality goods at the lowest possible price to our members. As a management team, we continue to be incredibly proud of our 333,000 employees worldwide and the culture that they foster. The consistency of our financial results is a reflection of the commitment of our entire team to member service and the Costco experience. Most of these employees are led by our fantastic warehouse managers who we view as executives in our company. Succession planning continues to be a key focal point for us as we're continually working on identifying the future leaders of our company. In fiscal year 24, we promoted 95 new warehouse managers. 85% of those promoted started at Costco as an hourly employee. This promote from within culture and the long-term career it helps to build is core to who we are as a company, community member, and retailer. A few other highlights I'd like to mention. In fiscal 2024, we hit our target of 30 new warehouse openings. This included one relocation and resulted in 29 net new buildings. Highlights included our first-ever building in Maine, bringing us to 47 states, and our 600th U.S. building in Eau Claire, Wisconsin. We also continue to see significant opportunities worldwide, and our fiscal 2025 plan has 12 of our planned 29 openings coming outside of the U.S., including our fifth building in Spain, which opened in Zaragoza two weeks ago. With three of these warehouses being relocations, we expect to add 26 net new buildings in fiscal 25. We continue to grow our e-commerce business, and Costco Logistics has had a remarkable year. Appliances and furniture in big and bulky has led the way, and logistics delivered over 4.5 million items this last year, up 29% over the year prior. Improvements in our item assortment, delivery times, and scheduling functionality all enhance the member experience. We have great momentum with this business and expect big and bulky items will be a key part of our continued progress with e-commerce in the coming year. Turning to technology, we're starting to realize the benefits from the work that was done this past year. Members are very excited about being able to check warehouse inventory via the Costco app. And the membership card scanners installed at the front doors have delivered on the goal of speeding up the checkout process. This has been very well received by our members. More improvements are currently underway, which should further benefit our business both online and in our warehouses. With that, I'll turn it back over to Gary to discuss the results for the quarter, and I'll jump back on during Q&A to field some questions.