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October 8, 2003 at 4:00 AM EDT

Costco Wholesale Corporation Releases Fourth Quarter and Fiscal Year 2003 Results of Operations and September Sales Results

ISSAQUAH, Wash.--(BUSINESS WIRE)--Oct. 8, 2003--Costco Wholesale Corporation (Nasdaq: COST) announced today its results of operations for the 16 weeks (fourth quarter) and the 52 weeks (fiscal year) ended August 31, 2003.

Net sales for fiscal 2003, the 52 weeks ended August 31, 2003, were $41.69 billion, an increase of 10% from $37.99 billion during the prior 52-week fiscal year ended September 1, 2002. Comparable warehouse sales increased 5% over the comparable 52-week period of fiscal 2002. Net sales for the 16-week fourth quarter ended August 31, 2003, increased 11% to $13.42 billion from $12.05 billion during the 16-week fourth quarter ended September 1, 2002. Comparable warehouse sales during the 16-week fourth quarter of fiscal 2003 increased 7% over the comparable 16-week period in the prior fiscal year.

Net income for the 16-week fourth quarter decreased 3% to $239.4 million, or $.51 per diluted share, from $247.4 million, or $.52 per diluted share, during the 16-week fourth quarter of fiscal 2002. Net income for fiscal 2003 increased 3% to $721.0 million, or $1.53 per diluted share, from $700.0 million, or $1.48 per diluted share during fiscal year 2002. The fiscal 2003 net income reflects an effective income tax rate of 36.18% for the fourth quarter and 37.75% for the fiscal year, compared with an effective tax rate of 35.55% for the 2002 fourth quarter and 38.50% for the fiscal year.

In addition to reporting fourth quarter and fiscal year 2003 operating results, the Company today also reported net sales of $4.07 billion for the month of September, the five weeks ended October 5, 2003, an increase of 13% from $3.59 billion in the same five-week period of the prior fiscal year. On a comparable warehouse basis, that is warehouses open at least a year, sales increased 10% during this five-week period.

Comparable sales for the 5-week September sales period ended
October 5, 2003 were as follows:
                                                     5 Weeks
                                                   ------------
US                                                      9%
International                                          16%

Total Company                                          10%
                                                   ============

In addition, the Company announced that, effective October 3rd, one of Costco's subsidiaries acquired from Carrefour Nederland B.V. it's 20% equity interest in Costco Wholesale UK Limited, bringing Costco's ownership in Costco Wholesale UK Limited to 100%. Costco Wholesale UK Limited currently operates 15 Costco warehouse locations - 12 in England and three in Scotland. One to two additional units are currently planned to be opened prior to the end of calendar year 2004.

A conference call to discuss these fiscal 2003 fourth quarter and year-end results, as well as the September sales results, is scheduled for 8:00 a.m. (PDT) today, October 8, 2003, and is available via a webcast on www.costco.com (go to Customer Service, Investor Relations, Financial Releases and click on the "Live Webcast" icon).

Costco currently operates 420 warehouses, including 310 in the United States, 61 in Canada, 15 in the United Kingdom, five in Korea, three in Taiwan, four in Japan and 22 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com. The Company plans to open an additional 10 warehouses (including the relocation of one existing warehouse to a larger and better-located facility) prior to the end of the 2003 calendar year.

                     COSTCO WHOLESALE CORPORATION

                   CONSOLIDATED STATEMENTS OF INCOME
             (dollars in thousands, except per share data)
                              (unaudited)

                     16 Weeks     16 Weeks     52 Weeks     52 Weeks
                       Ended        Ended        Ended        Ended
                     Aug. 31,     Sept. 1,     Aug. 31,     Sept. 1,
                       2003         2002         2003         2002
                   ------------ ------------ ------------ ------------
REVENUE
 Net sales         $13,416,845  $12,050,797  $41,692,699  $37,993,093
 Membership fees
  and other            272,884      245,550      852,853      769,406
                   ------------ ------------ ------------ ------------
  Total revenue     13,689,729   12,296,347   42,545,552   38,762,499
OPERATING EXPENSES
 Merchandise costs  11,987,752   10,753,443   37,235,383   33,983,121
 Selling, general
  and
  administrative     1,318,259    1,142,796    4,097,398    3,575,536
 Preopening
  expenses               5,528       14,430       36,643       51,257
 Provision for
  impaired assets
  and closing
  costs                  4,000        5,000       19,500       21,050
                   ------------ ------------ ------------ ------------
  Operating income     374,190      380,678    1,156,628    1,131,535
OTHER INCOME
 (EXPENSE)
 Interest expense      (11,734)      (8,016)     (36,920)     (29,096)
 Interest income
  and other             12,729       11,218       38,525       35,745
                   ------------ ------------ ------------ ------------
INCOME BEFORE
 INCOME TAXES          375,185      383,880    1,158,233    1,138,184
 Provision for
  income taxes         135,759      136,479      437,233      438,201
                   ------------ ------------ ------------ ------------
NET INCOME         $   239,426  $   247,401  $   721,000  $   699,983
                   ============ ============ ============ ============

NET INCOME PER
 COMMON AND
 COMMON EQUIVALENT
  SHARE:

 Basic             $      0.52  $      0.54  $      1.58  $      1.54
                   ============ ============ ============ ============

 Diluted           $      0.51  $      0.52  $      1.53  $      1.48
                   ============ ============ ============ ============

Shares used in
 calculation
 (000's)
 Basic                 457,187      455,008      456,335      453,650
 Diluted               480,384      479,240      479,326      479,262


    CONTACT: Costco Wholesale Corporation
             Richard Galanti, 425/313-8203
             Bob Nelson, 425/313-8255
             Jeff Elliott, 425/313-8264

    SOURCE: Costco Wholesale Corporation