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May 27, 2010 at 3:01 AM EDT

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2010

ISSAQUAH, WA, May 27, 2010 (MARKETWIRE via COMTEX) --Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2010. Net sales for the third quarter of fiscal 2010 increased twelve percent, to $17.39 billion, from $15.48 billion during the third quarter of fiscal 2009. Net sales for the first thirty-six weeks of fiscal 2010 increased ten percent, to $52.66 billion, from $48.00 billion during the first thirty-six weeks of fiscal 2009.

Comparable sales for the third quarter (12 weeks) and the first thirty-six weeks of fiscal 2010 were as follows:

                     12 Weeks   36 Weeks
                     ---------  ---------
U.S.                     6%         4%
International           26%        21%
Total                   10%         7%
                     =========  =========

Comparable sales for the 12-week and 36-week periods, excluding the positive impacts from gasoline inflation and the strengthening of foreign currencies (primarily in Canada, the United Kingdom and Korea), were as follows:

                     12 Weeks   36 Weeks
                     ---------  ---------
U.S.                     3%         2%
International            8%         9%
Total                    4%         3%
                     =========  =========

Net income for the third quarter of fiscal 2010 was $306 million, or $.68 per diluted share, compared to $210 million, or $.48 per diluted share, during the third quarter of fiscal 2009. Net income for the first thirty-six weeks of fiscal 2010 was $871 million, or $1.95 per diluted share, compared to net income for the first thirty-six weeks of fiscal 2009 of $712 million or $1.62 per diluted share.

Third quarter results this year were positively affected by a partial reversal in the amount of $14 million (pre-tax) of a charge related to a Canadian tax liability, previously taken in the second quarter of fiscal 2007. Third quarter results last year were negatively impacted by a pretax charge of $34 million (pre-tax and mostly non-cash) related to a litigation settlement concerning our membership renewal policy.

Costco currently operates 568 warehouses, including 414 in the United States and Puerto Rico, 78 in Canada, 21 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada. The Company plans to open up to five new warehouses prior to the end of its 2010 fiscal year on August 29, 2010.

A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 27, 2010, 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, conditions affecting the acquisition, development, ownership or use of real estate, actions of vendors, rising costs associated with employees (including health care costs), 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.

                     COSTCO WHOLESALE CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              (dollars in millions, except per share data)
                             (unaudited)
                                   12 Weeks Ended        36 Weeks Ended
                                --------------------  --------------------
                                  May 9,    May 10,     May 9,    May 10,
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
REVENUE
  Net sales                     $  17,385  $  15,477  $  52,663  $  48,001
  Membership fees                     395        329      1,158      1,043
                                ---------  ---------  ---------  ---------
    Total revenue                  17,780     15,806     53,821     49,044
OPERATING EXPENSES
  Merchandise costs                15,494     13,776     46,971     42,823
  Selling, general and
   administrative                   1,789      1,655      5,439      4,998
  Preopening expenses                   3          9         17         29
  Provision for impaired assets
   and closing costs, net               3          7          5         15
                                ---------  ---------  ---------  ---------
    Operating income                  491        359      1,389      1,179
OTHER INCOME (EXPENSE)
  Interest expense                    (27)       (25)       (77)       (75)
  Interest income and other,
   net                                 10          6         58         39
                                ---------  ---------  ---------  ---------
INCOME BEFORE INCOME TAXES            474        340      1,370      1,143
  Provision for income taxes          163        128        484        422
                                ---------  ---------  ---------  ---------
Net income including
 noncontrolling interests             311        212        886        721
Net income attributable to
 noncontrolling interests              (5)        (2)       (15)        (9)
                                ---------  ---------  ---------  ---------
NET INCOME ATTRIBUTABLE TO
 COSTCO                         $     306  $     210  $     871  $     712
                                =========  =========  =========  =========
NET INCOME PER COMMON SHARE
 ATTRIBUTABLE TO COSTCO:
  Basic                         $    0.69  $    0.48  $    1.98  $    1.64
                                =========  =========  =========  =========
  Diluted                       $    0.68  $    0.48  $    1.95  $    1.62
                                =========  =========  =========  =========
Shares used in calculation
 (000's)
  Basic                           440,973    434,354    439,306    433,426
  Diluted                         448,391    439,997    446,709    439,995
Dividends per share             $   0.205  $   0.180  $   0.565  $   0.500
                     COSTCO WHOLESALE CORPORATION
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                       (dollars in millions)
                            (unaudited)
Subject to Reclassifications
                                                        May 9,   August 30,
                                                         2010       2009
                                                      ---------- ----------
                ASSETS
Cash and cash equivalents                             $    4,413 $    3,157
Short-term investments                                       854        570
Receivables, net                                             818        834
Merchandise inventories                                    5,546      5,405
Deferred income taxes and other current assets               426        371
                                                      ---------- ----------
  Total current assets                                    12,057     10,337
Property and equipment, net                               11,058     10,900
Other assets                                                 784        742
                                                      ---------- ----------
TOTAL ASSETS                                          $   23,899 $   21,979
                                                      ========== ==========
        LIABILITIES AND EQUITY
Accounts payable                                      $    5,975 $    5,450
Short-term borrowings and current portion of
 long-term debt                                               30         96
Other current liabilities                                  4,184      3,735
                                                      ---------- ----------
  Total current liabilities                               10,189      9,281
Long-term debt, excluding current portion                  2,132      2,130
Deferred income taxes and other liabilities                  606        464
                                                      ---------- ----------
  Total liabilities                                       12,927     11,875
                                                      ---------- ----------
Total Costco stockholders' equity                         10,874     10,024
Noncontrolling interests                                      98         80
                                                      ---------- ----------
  Total equity                                            10,972     10,104
                                                      ---------- ----------
TOTAL LIABILITIES AND EQUITY                          $   23,899 $   21,979
                                                      ========== ==========

CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203

Bob Nelson
425/313-8255
Jeff Elliott

425/313-8264

SOURCE: Costco