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May 27, 2015 at 9:00 PM EDT

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal 2015

ISSAQUAH, WA -- (Marketwired) -- 05/27/15 -- 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 2015, ended May 10, 2015.

Net sales for the quarter increased one percent, to $25.52 billion, from $25.23 billion last year. Net sales for the first thirty-six weeks increased four percent, to $78.67 billion, from $75.46 billion last year.

Comparable sales for the twelve-week and thirty-six-week periods were as follows:

12 Weeks 36 Weeks
U.S. 1% 4%
International -6% -2%
Total -1% 2%

Comparable sales for these periods, excluding negative impacts from gasoline price deflation and foreign exchange, were as follows:

12 Weeks 36 Weeks
U.S. 5% 7%
International 7% 7%
Total 6% 7%

Net income for the quarter was $516 million, or $1.17 per diluted share, compared to $473 million, or $1.07 per diluted share, last year. Net income for the thirty-six weeks was $1.61 billion, or $3.64 per diluted share, compared to $1.36 billion, or $3.07 per diluted share, last year. Net income for the thirty-six-week period was positively impacted by a $57 million ($0.13 per diluted share) tax benefit in connection with a second quarter special cash dividend to the extent received by the Company 401(k) plan participants; and was negatively impacted by a $14 million ($0.03 per diluted share) second quarter tax charge relating to an ongoing income tax matter.

Costco currently operates 673 warehouses, including 474 in the United States and Puerto Rico, 89 in Canada, 35 in Mexico, 26 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, seven in Australia and one in Spain. The Company plans to open up to an additional 15 new warehouses (including one relocation to a larger and better-located facility) prior to the end of its fiscal year on August 30, 2015. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) tomorrow, May 28, 2015, 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, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (including health care costs), energy and certain commodities, 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. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law.

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended 36 Weeks Ended
May 10,
2015
May 11,
2014
May 10,
2015
May 11,
2014
REVENUE
Net sales $ 25,517 $ 25,233 $ 78,673 $ 75,457
Membership fees 584 561 1,748 1,660
Total revenue 26,101 25,794 80,421 77,117
OPERATING EXPENSES
Merchandise costs 22,687 22,554 69,969 67,421
Selling, general and administrative 2,579 2,487 7,946 7,519
Preopening expenses 14 16 38 48
Operating income 821 737 2,468 2,129
OTHER INCOME (EXPENSE)
Interest expense (31 ) (25 ) (84 ) (78 )
Interest income and other, net 9 12 64 60
INCOME BEFORE INCOME TAXES 799 724 2,448 2,111
Provision for income taxes 280 245 817 728
Net income including noncontrolling interests 519 479 1,631 1,383
Net income attributable to noncontrolling interests (3 ) (6 ) (21 ) (22 )
NET INCOME ATTRIBUTABLE TO COSTCO $ 516 $ 473 $ 1,610 $ 1,361
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic $ 1.17 $ 1.08 $ 3.66 $ 3.10
Diluted $ 1.17 $ 1.07 $ 3.64 $ 3.07
Shares used in calculation (000's)
Basic 440,070 439,446 439,733 439,058
Diluted 443,132 442,720 442,721 442,651
Cash dividends declared per common share $ 0.400 $ 0.355 $ 6.110 $ 0.975
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
May 10,
2015
August 31,
2014
ASSETS
Cash and cash equivalents $ 5,063 $ 5,738
Short-term investments 1,742 1,577
Receivables, net 1,195 1,148
Merchandise inventories 8,869 8,456
Deferred income taxes and other current assets 765 669
Total current assets 17,634 17,588
Property and equipment, net 15,083 14,830
Other assets 774 606
TOTAL ASSETS $ 33,491 $ 33,024
LIABILITIES AND EQUITY
Accounts payable $ 8,895 $ 8,491
Accrued salaries and benefits 2,160 2,231
Deferred membership fees 1,336 1,254
Other current liabilities 4,345 2,436
Total current liabilities 16,736 14,412
Long-term debt, excluding current portion 4,826 5,093
Deferred income taxes and other liabilities 1,115 1,004
Total liabilities 22,677 20,509
Total Costco stockholders' equity 10,587 12,303
Noncontrolling interests 227 212
Total equity 10,814 12,515
TOTAL LIABILITIES AND EQUITY $ 33,491 $ 33,024

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

Source: Costco