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October 10, 2002 at 4:02 AM EDT

Costco Wholesale Corporation Releases Fourth Quarter and Fiscal Year 2002 Results of Operations and September Sales Results

ISSAQUAH, Wash., Oct 10, 2002 (BUSINESS WIRE) -- Costco Wholesale Corporation (Nasdaq: COST) announced today its results of operations for the 16 weeks (fourth quarter) and the 52 weeks (fiscal year) ended September 1, 2002.

Net sales for fiscal 2002, the 52 weeks ended September 1, 2002, were $37.99 billion, an increase of 11% from $34.14 billion during the prior 52-week fiscal year ended September 2, 2001. Comparable warehouse sales increased 6% over the comparable 52-week period of fiscal 2001. Net sales for the 16-week fourth quarter ended September 1, 2002, increased 10% to $12.05 billion from $10.91 billion during the 16-week fourth quarter ended September 2, 2001. Comparable warehouse sales during the 16-week fourth quarter of fiscal 2002 increased 6% over the comparable 16-week period in the prior fiscal year.

Net income for the 16-week fourth quarter increased 30% to $247.4 million, or $.52 per diluted share, from $190.7 million, or $.41 per diluted share, during the 16-week fourth quarter of fiscal 2001. Net income for fiscal 2002 increased 16% to $700.0 million, or $1.48 per diluted share, from $602.1 million, or $1.29 per diluted share during fiscal year 2001. The fiscal 2002 net income reflects an effective income tax rate of 35.55% for the fourth quarter and 38.50% for the fiscal year, compared with an effective tax rate of 40.00% for the 2001 fourth quarter and fiscal year.

In addition to reporting fourth quarter and fiscal year 2002 operating results, the Company today also reported net sales of $3.59 billion for the five weeks ended October 6, 2002, an increase of 10% from $3.26 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 5% during this five-week period.

Comparable sales for the 5-week September sales period ended October 6, 2002 were as follows:

                          5 Weeks
                      ---------------
US                          4%
International               9%
Total Company               5%
                      ===============
A conference call to discuss these fiscal 2002 fourth quarter and year-end results, as well as the September sales results, is scheduled for 8:00 a.m. (PDT) today, October 10, 2002, 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 401 warehouses, including 295 in the United States, 60 in Canada, 15 in the United Kingdom, five in Korea, three in Taiwan, three in Japan and 20 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com. The Company plans to open an additional 12 to 14 warehouses (including the relocation of one existing warehouse to a larger and better-located facility) prior to the end of the 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
                   September 1, September 2, September 1, September 2,
                      2002          2001         2002         2001
                   ------------ ------------ ------------ ------------
REVENUE
 Net sales........ $12,050,797  $10,914,568  $37,993,093  $34,137,021
 Membership fees
  and other.......     245,550      219,987      769,406      660,016
                   ------------ ------------ ------------ ------------
   Total revenue..  12,296,347   11,134,555   38,762,499   34,797,037
OPERATING EXPENSES
 Merchandise costs  10,753,443    9,782,902   33,983,121   30,598,140
 Selling, general
  and
  administrative..   1,142,796    1,000,663    3,575,536    3,129,059
 Preopening
  expenses........      14,430       16,568       51,257       59,571
 Provision for
  impaired assets
  and closing
  costs...........       5,000       16,000       21,050       18,000
                   ------------ ------------ ------------ ------------
   Operating
    income........     380,678      318,422    1,131,535      992,267
OTHER INCOME
 (EXPENSE)
 Interest expense.      (8,016)      (7,135)     (29,096)     (32,024)
 Interest income
  and other.......      11,218        6,603       35,745       43,238
                   ------------ ------------ ------------ ------------
INCOME BEFORE
 INCOME TAXES.....     383,880      317,890    1,138,184    1,003,481
 Provision for
  income taxes....     136,479      127,156      438,201      401,392
                   ------------ ------------ ------------ ------------
NET INCOME            $247,401     $190,734     $699,983     $602,089
                   ============ ============ ============ ============
NET INCOME PER
 COMMON AND
 COMMON EQUIVALENT
  SHARE:
 Basic............       $0.54        $0.42        $1.54        $1.34
                   ============ ============ ============ ============
 Diluted..........       $0.52        $0.41        $1.48        $1.29
                   ============ ============ ============ ============
Shares used in
 calculation
 (000's)
 Basic............     455,008      451,310      453,650      449,631
 Diluted..........     479,240      477,875      479,262      475,827

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