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May 31, 2001 at 4:02 AM EDT

Costco Wholesale Corporation Reports Third Quarter and Year-to-date Operating Results for Fiscal 2001

ISSAQUAH, Wash.--(BUSINESS WIRE)--May 31, 2001--Costco Wholesale Corporation ("Costco" or the "Company") (Nasdaq: COST) announced today its operating results for the third quarter (12 weeks) and the first thirty-six weeks of fiscal 2001, ended May 13, 2001.

Net sales for the third quarter of fiscal 2001 increased 12% to $7.56 billion from $6.77 billion during the third quarter of fiscal 2000. On a comparable warehouse basis, that is warehouses open at least a year, net sales increased 5%.

Net income for the third quarter of fiscal 2001 decreased 12% to $105.3 million, or $.23 per share (diluted), from $120.3 million, or $.26 per share (diluted), during the third quarter of fiscal 2000.

Net sales for the first thirty-six weeks of fiscal 2001 increased 10% to $23.22 billion from $21.21 billion during the first thirty-six weeks of fiscal 2000. Comparable warehouse sales during the first thirty-six weeks of fiscal 2001 increased 4% over the prior year's levels.

Net income for the first thirty-six weeks of fiscal 2001 decreased 5% to $411.4 million, or $.88 per diluted share, compared to net income for the first thirty-six weeks of fiscal 2000 of $431.3 million, or $.92 per diluted share.

Costco currently operates 360 warehouses, including 259 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 five additional new warehouses prior to the end of its 2001 fiscal year on September 2, 2001, and an additional 26 to 28 new warehouses (including four to five relocations of existing warehouses to larger and better-located facilities) prior to the end of calendar year 2001.

A conference call to discuss these third quarter results is scheduled for 8:00 a.m. (PDT) today, May 31, 2001, 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).

Certain statements contained in this release 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, conditions affecting the acquisition, development, ownership or use of real estate, actions of vendors, and other risks identified from time to time in the Company's public statements and reports filed with the SEC.

                     COSTCO WHOLESALE CORPORATION

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



                         12 Weeks Ended           36 Weeks Ended
                         --------------           --------------
                    May 13, 2001 May 7, 2000 May 13, 2001 May 7, 2000
                    ------------ ----------- ------------ -----------
REVENUE
 Net sales            $7,563,494  $6,768,608 $23,222,453  $21,206,406
 Membership fees
 and other               155,401     126,000     440,029      368,701
   Total revenue       7,718,895   6,894,608  23,662,482   21,575,107

OPERATING EXPENSES
 Merchandise costs     6,825,636   6,084,246  20,815,238   18,996,814
 Selling, general
  and administrative     705,858     604,924   2,128,396    1,838,380
 Preopening expenses      12,751       6,728      43,003       25,170
 Provision for
  impaired assets
  and closing costs           --       1,500       2,000        4,000

   Operating income      174,650     197,210     673,845      710,743

OTHER INCOME (EXPENSE)
 Interest expense         (9,023)     (9,604)    (24,889)     (30,577)
 Interest income
  and other                9,801      12,943      36,635       38,593

INCOME BEFORE INCOME TAXES
                         175,428     200,549     685,591      718,759
 Provision for 
  income taxes            70,171      80,220     274,236      287,504

NET INCOME              $105,257    $120,329    $411,355     $431,255

NET INCOME PER COMMON AND
  COMMON EQUIVALENT SHARE:
 Basic                      $.23       $0.27        $.92        $0.97
 Diluted                    $.23       $0.26        $.88        $0.92

Shares used in
 calculation (000's)
 Basic                   450,195     448,113     448,886      445,557
 Diluted                 475,840     478,750     474,973      476,409

--30--BP/se*

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