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October 11, 2001 at 4:03 AM EDT

Costco Wholesale Corporation Releases Fourth Quarter and Fiscal Year 2001 Results of Operations and September Sales Results

ISSAQUAH, Wash., Oct 11, 2001 (BUSINESS WIRE) -- Costco Wholesale Corporation ("Costco" or the "Company") (Nasdaq: COST) announced today its results of operations for the 16 weeks (fourth quarter) and the 52 weeks (fiscal year) ended September 2, 2001.

Net sales for fiscal 2001, the 52 weeks ended September 2, 2001, were $34.14 billion, an increase of 8% from $31.62 billion during the prior 53-week fiscal year ended September 3, 2000. On a like 52-week year-over-year comparison, total net sales increased 10%. Comparable warehouse sales increased 4% over the comparable 52-week period of fiscal 2000. Net sales for the 16-week fourth quarter ended September 2, 2001, increased 5% to $10.91 billion from $10.41 billion during the 17-week fourth quarter ended September 3, 2000. On a like 16-week quarter-over-quarter comparison, total net sales increased 11%. Comparable warehouse sales during the 16-week fourth quarter of fiscal 2001 increased 5% over the comparable 16-week period in the prior fiscal year.

Net income for the 16-week fourth quarter decreased 5% to $190.7 million, or $.41 per diluted share, from $200.2 million, or $.43 per diluted share, during the 17-week fourth quarter of fiscal 2000. Net income in the fourth quarter of fiscal 2001 was impacted by a $16 million ($9.6 million after-tax, or $.02 per diluted share) provision for closing costs primarily related to the Company's reorganization and consolidation of its administrative operations in Canada. Before the impact of this charge, net income for the fourth quarter of fiscal 2001 would have been $200.3 million, or $.43 per diluted share.

Net income for fiscal 2001, a 52-week fiscal year, decreased 5% to $602.1 million, or $1.29 per diluted share, from $631.4 million, or $1.35 per diluted share during fiscal year 2000, a 53-week fiscal year.

In addition to reporting fourth quarter and fiscal year 2001 operating results, the Company today also reported net sales of $3.26 billion for the five weeks ended October 7, 2001, an increase of 10% from $2.97 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 4% during this five-week period.

Costco currently operates 369 warehouses, including 268 in the United States, 60 in Canada, 11 in the United Kingdom, five in Korea, three in Taiwan, two 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 16 to 17 warehouses (including the relocation of two existing warehouses to larger and better-located facilities) prior to the end of the calendar year.

                     COSTCO WHOLESALE CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
             (dollars in thousands, except per share data)
                              (unaudited)
                     16 Weeks    17 Weeks      52 Weeks     53 Weeks
                      Ended        Ended        Ended        Ended
                   September 2, September 3, September 2, September 3,
                       2001         2000         2001         2000
                   -----------  -----------  -----------  -----------
REVENUE
Net sales          $10,914,568  $10,414,317  $34,137,021  $31,620,723
Membership fees
 and other             219,987      174,872      660,016      543,573
                   -----------  -----------  -----------  -----------
  Total revenue     11,134,555   10,589,189   34,797,037   32,164,296
OPERATING EXPENSES
Merchandise costs    9,782,902    9,325,356   30,598,140   28,322,170
Selling, general
 and administrative  1,000,663      916,975    3,129,059    2,755,355
Preopening expenses     16,568       17,151       59,571       42,321
Provision for
 impaired assets
 and closing costs      16,000        3,000       18,000        7,000
                   -----------  -----------  -----------  -----------
  Operating income     318,422      326,707      992,267    1,037,450
OTHER INCOME
 (EXPENSE)
  Interest expense      (7,135)      (8,704)     (32,024)     (39,281)
  Interest income
   and other             6,603       15,633       43,238       54,226
                   -----------  -----------  -----------  -----------
INCOME BEFORE
 INCOME TAXES          317,890      333,636    1,003,481    1,052,395
Provision for
 income taxes          127,156      133,454      401,392      420,958
                   -----------  -----------  -----------  -----------
NET INCOME         $   190,734  $   200,182  $   602,089  $   631,437
                   ===========  ===========  ===========  ===========
NET INCOME PER
 COMMON AND COMMON
 EQUIVALENT SHARE:
                   -----------  -----------  -----------  -----------
 Basic             $      0.42  $      0.45  $      1.34  $      1.41
                   ===========  ===========  ===========  ===========
                   -----------  -----------  -----------  -----------
 Diluted           $      0.41  $      0.43  $      1.29  $      1.35
                   ===========  ===========  ===========  ===========
Shares used in
 calculation (000's)
  Basic                451,310      447,757      449,631      446,255
  Diluted              477,875      474,304      475,827      475,737
CONTACT:          Costco Wholesale Corporation
                  Richard Galanti, 425/313-8203
                  or
                  Bob Nelson, 425/313-8255

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