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Costco Wholesale Corporation Reports First Quarter Fiscal Year 2011 Operating Results

ISSAQUAH, WA, Dec 08, 2010 (MARKETWIRE via COMTEX) --

Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the first quarter (twelve weeks) of fiscal 2011, ended November 21, 2010.

Net sales for the quarter increased eleven percent to $18.82 billion from $16.92 billion during the first quarter of fiscal 2010. This year's first quarter included sales from the Company's 50% owned Mexico joint venture, as the Company began consolidating its Mexico operations on a prospective basis beginning with its 2011 fiscal year (on August 30, 2010) due to the adoption of a new accounting standard, as previously disclosed; without those sales the increase would have been eight percent.

Comparable sales for the first quarter of fiscal 2011, including Mexico operations for both this year and last year, were as follows:

                                      12 Weeks
                                      ---------
                 U.S.                         5%
                 International               14%
                 Total Company                7%
                                      =========

Inflation in gasoline prices and strengthening foreign currencies had a positive impact on comparable sales. Excluding these effects, comparable sales for the twelve-week period were as follows:

                                      12 Weeks
                                      ---------
                 U.S.                         4%
                 International               10%
                 Total Company                5%
                                      =========

Net income for the quarter was $312 million, or $.71 per diluted share, compared to $266 million, or $.60 per diluted share, during the first quarter of fiscal 2010. Mexico's results for the prior year were accounted for under the equity method and Costco's 50% share was included in interest income and other. In the current year the joint venture results are fully consolidated and the joint venture partner's 50% share is reported as net income attributable to noncontrolling interests. The consolidation of the Mexico joint venture had no impact on net income or earnings per share attributable to Costco.

Costco currently operates 582 warehouses, including 425 in the United States and Puerto Rico, 80 in Canada, 22 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada.

A conference call to discuss these fiscal 2011 first quarter results is scheduled for 8:00 a.m. (PT) today, December 8, 2010, and is available via a webcast on www.costco.com (click on Investor Relations and "Play Webcast").

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, conditions affecting the acquisition, development, ownership or use of real estate, actions of vendors, rising costs associated with employees (including health care costs), geopolitical conditions and other risks identified from time to time in the Company's public statements and reports filed with the Securities and Exchange Commission.

                       COSTCO WHOLESALE CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (dollars in millions, except per share data)
                                (unaudited)
                                                      12 Weeks Ended
                                                --------------------------
                                                November 21,  November 22,
                                                    2010          2009
                                                ------------  ------------
REVENUE
  Net sales                                     $     18,823  $     16,922
  Membership fees                                        416           377
                                                ------------  ------------
    Total revenue                                     19,239        17,299
OPERATING EXPENSES
  Merchandise costs                                   16,757        15,081
  Selling, general and administrative                  1,941         1,777
  Preopening expenses                                     12            11
  Provision for impaired assets and closing
   costs, net                                              4             2
                                                ------------  ------------
    Operating income                                     525           428
OTHER INCOME (EXPENSE)
  Interest expense                                       (26)          (24)
  Interest income and other, net                           5            18
                                                ------------  ------------
INCOME BEFORE INCOME TAXES                               504           422
  Provision for income taxes                             172           152
                                                ------------  ------------
Net income including noncontrolling interests            332           270
Net income attributable to noncontrolling
 interests                                               (20)           (4)
                                                ------------  ------------
NET INCOME ATTRIBUTABLE TO COSTCO               $        312  $        266
                                                ============  ============
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO
 COSTCO:
  Basic                                         $       0.72  $       0.61
                                                ============  ============
  Diluted                                       $       0.71  $       0.60
                                                ============  ============
Shares used in calculation (000's)
  Basic                                              434,099       437,173
  Diluted                                            441,360       444,849
Dividends per share                             $      0.205  $      0.180
                       COSTCO WHOLESALE CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                          (dollars in millions)
                                (unaudited)
Subject to Reclassifications
                                                  November 21,  August 29,
                                                      2010         2010
                                                  ------------ ------------
                    ASSETS
Cash and cash equivalents                         $      3,739 $      3,214
Short-term investments                                   1,545        1,535
Receivables, net                                           985          884
Merchandise inventories                                  6,852        5,638
Deferred income taxes and other current assets             437          437
                                                  ------------ ------------
  Total current assets                                  13,558       11,708
Property and equipment, net                             12,019       11,314
Other assets                                               466          793
                                                  ------------ ------------
TOTAL ASSETS                                      $     26,043 $     23,815
                                                  ============ ============
            LIABILITIES AND EQUITY
Accounts payable                                  $      7,205 $      5,947
Short-term borrowings and current portion of
 long-term debt                                             24           26
Other current liabilities                                4,273        4,090
                                                  ------------ ------------
  Total current liabilities                             11,502       10,063
Long-term debt, excluding current portion                2,143        2,141
Deferred income taxes and other liabilities                691          681
                                                  ------------ ------------
  Total liabilities                                     14,336       12,885
                                                  ------------ ------------
Total Costco stockholders' equity                       11,199       10,829
Noncontrolling interests                                   508          101
                                                  ------------ ------------
  Total equity                                          11,707       10,930
                                                  ------------ ------------
TOTAL LIABILITIES AND EQUITY                      $     26,043 $     23,815
                                                  ============ ============

CONTACTS:

Costco Wholesale Corporation
Richard Galanti
425/313-8203

Bob Nelson
425/313-8255

Jeff Elliott
425/313-8264


SOURCE: Costco