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Costco Wholesale Corporation Reports First Quarter Fiscal Year 2016 Operating Results

ISSAQUAH, WA -- (Marketwired) -- 12/08/15 -- Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2016, ended November 22, 2015.

Net sales for the first quarter increased one percent, to $26.63 billion from $26.28 billion during the first quarter last year.

Comparable sales for the first quarter of fiscal 2016 were as follows:

12 Weeks
U.S. 2%
Canada -9%
Other International -5%
Total Company -1%

Comparable sales for this period excluding the negative impacts from gasoline price deflation and foreign exchange were as follows:

12 Weeks
U.S. 6%
Canada 9%
Other International 7%
Total Company 6%

Net income for the quarter was $480 million, or $1.09 per diluted share, compared to $496 million, or $1.12 per diluted share, last year.

Costco currently operates 697 warehouses, including 487 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 24 in Japan, 12 in Korea, 11 in Taiwan, eight in Australia and two in Spain. The Company plans to open one additional warehouse before the end of calendar year 2015. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico and Korea.

A conference call to discuss these fiscal 2016 first quarter operating results is scheduled for 8:00 a.m. (PT) tomorrow, December 9, 2015, 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, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, 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. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law.

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
November 22,
2015
November 23,
2014
REVENUE
Net sales $ 26,627 $ 26,284
Membership fees 593 582
Total revenue 27,220 26,866
OPERATING EXPENSES
Merchandise costs 23,621 23,385
Selling, general and administrative 2,806 2,696
Preopening expenses 26 15
Operating income 767 770
OTHER INCOME (EXPENSE)
Interest expense (33 ) (26 )
Interest income and other, net 28 35
INCOME BEFORE INCOME TAXES 762 779
Provision for income taxes 275 274
Net income including noncontrolling interests 487 505
Net income attributable to noncontrolling interests (7 ) (9 )
NET INCOME ATTRIBUTABLE TO COSTCO $ 480 $ 496
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic $ 1.10 $ 1.13
Diluted $ 1.09 $ 1.12
Shares used in calculation: (000's)
Basic 438,342 438,760
Diluted 441,386 442,210
Cash dividends declared per common share $ 0.40 $ 0.355
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
November 22,
2015
August 30,
2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,054 $ 4,801
Short-term investments 1,229 1,618
Receivables, net 1,359 1,224
Merchandise inventories 10,382 8,908
Deferred income taxes and other current assets 834 748
Total current assets 18,858 17,299
PROPERTY AND EQUIPMENT
Land 5,079 4,961
Buildings and improvements 13,150 12,618
Equipment and fixtures 5,480 5,274
Construction in progress 647 811
24,356 23,664
Less accumulated depreciation and amortization (8,489 ) (8,263 )
Net property and equipment 15,867 15,401
OTHER ASSETS 726 728
TOTAL ASSETS $ 35,451 $ 33,428
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $ 10,378 $ 9,011
Current portion long-term debt 1,281 1,283
Accrued salaries and benefits 2,436 2,468
Accrued member rewards 812 813
Deferred membership fees 1,350 1,269
Other current liabilities 2,036 1,696
Total current liabilities 18,293 16,540
LONG-TERM DEBT, excluding current portion 4,845 4,852
DEFERRED INCOME TAXES AND OTHER LIABILITIES 1,233 1,193
Total liabilities 24,371 22,585
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding 0 0
Common stock $.005 par value; 900,000,000 shares authorized; 439,777,000 and 437,952,000 shares issued and outstanding 2 2
Additional paid-in capital 5,247 5,218
Accumulated other comprehensive loss (1,105 ) (1,121 )
Retained earnings 6,704 6,518
Total Costco stockholders' equity 10,848 10,617
Noncontrolling interests 232 226
Total equity 11,080 10,843
TOTAL LIABILITIES AND EQUITY $ 35,451 $ 33,428

CONTACTS:
Costco Wholesale Corporation


Richard Galanti
425/313-8203

Bob Nelson
425/313-8255

Jeff Elliott
425/313-8264

Source: Costco