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Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2011

ISSAQUAH, WA, May 25, 2011 (MARKETWIRE via COMTEX) -- Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2011, both ended May 8, 2011.

Net sales for the quarter increased 16 percent, to $20.19 billion, from $17.39 billion during the third quarter of fiscal 2010. Net sales for the first thirty-six weeks increased 13 percent, to $59.46 billion, from $52.66 billion last year. This year's results include sales from the Company's 50% owned Mexico joint venture, as the Company began consolidating its Mexico operations beginning with its 2011 fiscal year. Mexico sales accounted for approximately three percentage points of the increase for the quarter and the year-to-date sales.

Comparable sales for the third quarter and first thirty-six weeks of fiscal 2011, including Mexico operations for this year and last year, were as follows:

                            12 Weeks      36 Weeks
                            ---------     ---------
     U.S.                      10%            6%
     International             18%           15%
     Total                     12%            9%
                            =========     =========

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

                            12 Weeks      36 Weeks
                            ---------     ---------
     U.S.                       6%            4%
     International             11%           10%
     Total                      7%            6%
                            =========     =========

Net income for the quarter was $324 million, or $.73 per diluted share, compared to $306 million, or $.68 per diluted share, last year. Net income for the first thirty-six weeks was $984 million, or $2.22 per diluted share, compared to $871 million, or $1.95 per diluted share, last year. The consolidation of the Mexico joint venture had no impact on net income or earnings per share attributable to Costco. The quarter this year included a $49 million pre-tax LIFO charge ($.07 per diluted share). There was no LIFO charge in any quarter of fiscal 2010. The prior year's third-quarter results were positively affected by a $14 million pretax benefit ($.02 per diluted share) related to a partial reversal of a Canadian tax liability.

Costco currently operates 581 warehouses, including 425 in the United States and Puerto Rico, 80 in Canada, 32 in Mexico, 22 in the United Kingdom, seven in Korea, six in Taiwan, eight in Japan, and one in Australia. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada. The Company plans to open up to eleven additional warehouses prior to the end of its 2011 fiscal year on August 28, 2011.

A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 25, 2011, 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), energy, and certain commodities, 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        36 Weeks Ended
                                --------------------  --------------------
                                  May 8,     May 9,     May 8,     May 9,
                                   2011       2010       2011       2010
                                ---------  ---------  ---------  ---------
REVENUE
  Net sales                     $  20,188  $  17,385  $  59,460  $  52,663
  Membership fees                     435        395      1,277      1,158
                                ---------  ---------  ---------  ---------
    Total revenue                  20,623     17,780     60,737     53,821
OPERATING EXPENSES
  Merchandise costs                18,067     15,494     53,059     46,971
  Selling, general and
   administrative                   1,991      1,789      5,970      5,439
  Preopening expenses                   8          3         24         17
  Provision for impaired assets
   and closing costs, net               1          3          7          5
                                ---------  ---------  ---------  ---------
    Operating income                  556        491      1,677      1,389
OTHER INCOME (EXPENSE)
  Interest expense                    (27)       (27)       (80)       (77)
  Interest income and
   other, net                           5         10         14         58
                                ---------  ---------  ---------  ---------
INCOME BEFORE INCOME TAXES            534        474      1,611      1,370
  Provision for income taxes          193        163        569        484
                                ---------  ---------  ---------  ---------
Net income including
 noncontrolling interests             341        311      1,042        886
Net income attributable to
 noncontrolling interests             (17)        (5)       (58)       (15)
                                ---------  ---------  ---------  ---------
NET INCOME ATTRIBUTABLE TO
 COSTCO                         $     324  $     306  $     984  $     871
                                =========  =========  =========  =========
NET INCOME PER COMMON SHARE
 ATTRIBUTABLE TO COSTCO:
  Basic                         $    0.74  $    0.69  $    2.26  $    1.98
                                =========  =========  =========  =========
  Diluted                       $    0.73  $    0.68  $    2.22  $    1.95
                                =========  =========  =========  =========
Shares used in calculation
 (000's)
  Basic                           436,977    440,973    435,913    439,306
  Diluted                         443,570    448,391    442,727    446,709
Dividends per share             $    0.24  $   0.205  $    0.65  $   0.565
                      COSTCO WHOLESALE CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                          (dollars in millions)
                               (unaudited)
Subject to Reclassifications
                                                       May 8,    August 29,
                                                        2011        2010
                                                     ----------  ----------
                      ASSETS
Cash and cash equivalents                            $    4,082  $    3,214
Short-term investments                                    2,133       1,535
Receivables, net                                            948         884
Merchandise inventories                                   6,396       5,638
Deferred income taxes and other current assets              510         437
                                                     ----------  ----------
  Total current assets                                   14,069      11,708
Property and equipment, net                              12,300      11,314
Other assets                                                605         793
                                                     ----------  ----------
TOTAL ASSETS                                         $   26,974  $   23,815
                                                     ==========  ==========
              LIABILITIES AND EQUITY
Accounts payable                                     $    6,800  $    5,947
Short-term borrowings                                         1          26
Other current liabilities                                 5,693       4,090
                                                     ----------  ----------
  Total current liabilities                              12,494      10,063
Long-term debt, excluding current portion                 1,247       2,141
Deferred income taxes and other liabilities                 692         681
                                                     ----------  ----------
  Total liabilities                                      14,433      12,885
                                                     ----------  ----------
Total Costco stockholders' equity                        11,963      10,829
Noncontrolling interests                                    578         101
                                                     ----------  ----------
  Total equity                                           12,541      10,930
                                                     ----------  ----------
TOTAL LIABILITIES AND EQUITY                         $   26,974  $   23,815
                                                     ==========  ==========
CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203
Bob Nelson
425/313-8255
Jeff Elliott
425/313-8264

SOURCE: Costco