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May 25, 2016 at 9:00 PM EDT

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2016

ISSAQUAH, WA -- (Marketwired) -- 05/25/16 -- Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) today announced its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2016, ended May 8, 2016.

Net sales for the quarter increased two percent, to $26.15 billion from $25.52 billion last year. Net sales for the first thirty-six weeks increased two percent, to $80.34 billion from $78.67 billion last year.

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

12 Weeks 36 Weeks
U.S. 0 % 2 %
Canada 1 % -5 %
Other International -2 % -4 %
Total Company 0 % 0 %

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

12 Weeks 36 Weeks
U.S. 3 % 4 %
Canada 8 % 9 %
Other International 3 % 5 %
Total Company 3 % 5 %

Net income for the quarter was $545 million, or $1.24 per diluted share, compared to $516 million, or $1.17 per diluted share, last year. Net income for the thirty-six weeks was $1.57 billion, or $3.56 per diluted share, compared to $1.61 billion, or $3.64 per diluted share, last year. Net income for the thirty-six-week period last year was positively impacted by $43 million ($0.10 per diluted share) in net nonrecurring income tax benefits.

Costco currently operates 705 warehouses, including 493 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 25 in Japan, 12 in Korea, 12 in Taiwan, eight in Australia and two in Spain. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2016 third quarter operating results is scheduled for 8:00 a.m. (PT) on May 26, 2016, 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 8, 2016 May 10, 2015 May 8, 2016 May 10, 2015
REVENUE
Net sales $ 26,151 $ 25,517 $ 80,345 $ 78,673
Membership fees 618 584 1,814 1,748
Total revenue 26,769 26,101 82,159 80,421
OPERATING EXPENSES
Merchandise costs 23,162 22,687 71,252 69,969
Selling, general and administrative 2,731 2,579 8,372 7,946
Preopening expenses 18 14 54 38
Operating income 858 821 2,481 2,468
OTHER INCOME (EXPENSE)
Interest expense (30 ) (31 ) (94 ) (84 )
Interest income and other, net 7 9 51 64
INCOME BEFORE INCOME TAXES 835 799 2,438 2,448
Provision for income taxes 286 280 847 817
Net income including noncontrolling interests 549 519 1,591 1,631
Net income attributable to noncontrolling interests (4 ) (3 ) (20 ) (21 )
NET INCOME ATTRIBUTABLE TO COSTCO $ 545 $ 516 $ 1,571 $ 1,610
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic $ 1.24 $ 1.17 $ 3.58 $ 3.66
Diluted $ 1.24 $ 1.17 $ 3.56 $ 3.64
Shares used in calculation: (000's)
Basic 438,815 440,070 438,930 439,733
Diluted 441,066 443,132 441,321 442,721
Cash dividends declared per common share $ 0.45 $ 0.40 $ 1.25 $ 6.11
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
May 8,
2016
August 30,
2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,884 $ 4,801
Short-term investments 1,137 1,618
Receivables, net 1,300 1,224
Merchandise inventories 8,927 8,908
Other current assets 294 228
Total current assets 16,542 16,779
PROPERTY AND EQUIPMENT
Land 5,266 4,961
Buildings and improvements 13,645 12,618
Equipment and fixtures 5,834 5,274
Construction in progress 707 811
25,452 23,664
Less accumulated depreciation and amortization (8,961 ) (8,263 )
Net property and equipment 16,491 15,401
OTHER ASSETS 840 837
TOTAL ASSETS $ 33,873 $ 33,017
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,828 $ 9,011
Current portion of long-term debt 1,193 1,283
Accrued salaries and benefits 2,398 2,468
Accrued member rewards 861 813
Deferred membership fees 1,416 1,269
Other current liabilities 2,303 1,695
Total current liabilities 16,999 16,539
LONG-TERM DEBT, excluding current portion 3,921 4,852
OTHER LIABILITIES 1,205 783
Total liabilities 22,125 22,174
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding 0 0
Common stock $.005 par value; 900,000,000 shares authorized; 438,368,000 and 437,952,000 shares issued and outstanding 2 2
Additional paid-in capital 5,404 5,218
Accumulated other comprehensive loss (1,126 ) (1,121 )
Retained earnings 7,225 6,518
Total Costco stockholders' equity 11,505 10,617
Noncontrolling interests 243 226
Total equity 11,748 10,843
TOTAL LIABILITIES AND EQUITY $ 33,873 $ 33,017

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

Source: Costco