Costco Wholesale Corporation Conference Call Highlights

Costco Wholesale Corporation COST reported its Q4 earnings on Wednesday. Shares of the company are up 2 percent.

Below are some key highlights and takeaways from its conference call.

Operations:

• Earnings came in at $1.58 a share, up $0.18 or up 13% from last year's fourth quarter earnings of $1.40.
• In terms of sales for the fourth quarter, total sales were up 9%.
• Comp sales were up 6% on reported basis and excluding gas and FX impacts were up 7%.
• For the quarter, gas prices year-over-year were essentially flat, so no impact on the 6% U.S. comp figure.

Growth:

• For all of fiscal 2014, we opened 30 new locations, 17 new in the U.S., three each in Canada and Australia.
• Two each in Japan and Korea,
• One each in the U.K., Mexico and Spain, that being our first unit opening in Spain.
• And we ended fiscal 2014 with 663 locations operating worldwide.
• For the current fiscal year, fiscal 2015, our plans are to open 31 new warehouses and also relocate four existing locations.
• Nineteen of the planned 31 new locations will be in the United States with the remaining in international markets.
• Inevitably, a few of these will get delayed, so I'd estimate that the number of new units in fiscal 2015 will most likely be either in the very high 20s or up to 30, plus the four relos.
• During the first four months of fiscal 2015, basically September through this coming calendar year-end, we plan to open eight of our fiscal 2015 locations.

Membership and Ecommerce:

• Membership fees, we came in at $768 million or 2.21% of sales.
• That's up 7% or $52 million year-over-year from $716 million.
• In terms of membership, we continue to enjoy strong renewal rates, coming in and rounding up to 91% in the U.S. and Canada and a little over 87% worldwide.
• New member sign ups in Q4 overall a little over 2 million new sign ups in the company.
• This was about a 7% increase year-over-year.
• We had most of our members at the end of Q3 at 30.6 million.
• So overall total paid member households, 40.9 million at Q3 end and up 1.1 million to 42 million even at Q4 end.
• Also at the end of the fiscal year, executive memberships stood at just under 15 million, an increase of about 450,000 just in the 16 week quarter or about 28,000 increase per week of new executive members.
• With the purchase of full price $55 membership, the new member received a $20 Costco cash card, coupons for three items.
• In terms of Costco Online, we're currently operated in four countries: U.S., Canada, U.K. and Mexico.
• We'd expect to be in at least one, probably two additional countries by the end of calendar 2015.
• For the fiscal year, total e-commerce sales came in just under $3 billion.
• Sales in e-commerce were up in the high teens for both the fourth quarter and the fiscal year. And the comp sales in e-commerce were up in the 18% to 19%.

Financials:

• Now getting back to the income statement, our gross margin in the fourth quarter was quite strong, coming in up 15 basis points year-over-year.
• Overall, pre-tax income was up 14% or $132 million to $1.086 billion this year versus last year's fourth quarter pre-tax earnings of $954 million.
• In terms of income taxes, our tax rate for the quarter came in at a 35.1%.
• In terms of dividends, our currently quarterly dividend stands at $0.355 a shares or annualized at $1.42, that's up 14.5%