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May 28, 2003 at 4:01 AM EDT

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal 2003

ISSAQUAH, Wash.--(BUSINESS WIRE)--May 28, 2003--Costco Wholesale Corporation (Nasdaq: COST) announced today its operating results for the third quarter (12 weeks) and the first thirty-six weeks of fiscal 2003, ended May 11, 2003.

Net sales for the third quarter of fiscal 2003 increased 11% to $9.34 billion from $8.44 billion during the third quarter of fiscal 2002. On a comparable warehouse basis, that is warehouses open at least a year, net sales increased 6%.

Net income for the third quarter of fiscal 2003 increased 18% to $153.8 million, or $.33 per share (diluted), from $130.4 million, or $.28 per share (diluted), during the third quarter of fiscal 2002.

Net sales for the first thirty-six weeks of fiscal 2003 increased 9% to $28.28 billion from $25.94 billion during the first thirty-six weeks of fiscal 2002. Comparable warehouse sales during the first thirty-six weeks of fiscal 2003 increased 5% over the prior year's level.

Net income for the first thirty-six weeks of fiscal 2003 increased 6% to $481.6 million, or $1.02 per diluted share, compared to net income for the first thirty-six weeks of fiscal 2002 of $452.6 million, or $.96 per diluted share. Excluding the pre-tax charge of $26 million ($16 million or $.03 per diluted share after tax) reflecting an increase in workers' compensation loss reserves, which was booked in the second quarter of fiscal 2003, net income for the first thirty-six weeks of fiscal 2003 would have been $497.6 million, or $1.05 per diluted share, reflecting a 10% increase in net income over the prior year's thirty-six week period.

Costco currently operates 416 warehouses, including 307 in the United States, 61 in Canada, 15 in the United Kingdom, five in Korea, three in Taiwan, four in Japan and 21 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com. The Company plans to open three additional new warehouses prior to the end of its 2003 fiscal year on August 31, 2003, and an additional 12 new warehouses (including the relocation of one warehouse to a larger and better-located facility) prior to the end of calendar year 2003.

A conference call to discuss these third quarter results is scheduled for 8:00 a.m. (PDT) today, May 28, 2003, 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 11,     May 12,      May 11,      May 12,
                        2003        2002         2003         2002
                     ----------- ----------- ------------ ------------

REVENUE
 Net sales           $9,344,959 $8,436,807 $28,275,854 $25,942,296
 Membership fees and
  other                 198,112     179,940      579,969      523,856
                     ----------- ----------- ------------ ------------
  Total revenue       9,543,071   8,616,747   28,855,823   26,466,152
OPERATING EXPENSES
 Merchandise costs    8,358,323   7,583,251   25,247,631   23,229,678
 Selling, general
  and administrative    923,309     806,617    2,779,139    2,432,740
 Preopening expenses      5,853       6,077       31,115       36,827
 Provision for
  impaired assets
  and closing costs       6,000       4,500       15,500       16,050
                     ----------- ----------- ------------ ------------
  Operating income      249,586     216,302      782,438      750,857
OTHER INCOME
 (EXPENSE)
 Interest expense        (8,715)     (8,643)     (25,186)     (21,080)
 Interest income and
  other                   9,179       9,624       25,796       24,527
                     ----------- ----------- ------------ ------------
INCOME BEFORE INCOME
 TAXES                  250,050     217,283      783,048      754,304
 Provision for
  income taxes           96,270      86,913      301,474      301,722
                     ----------- ----------- ------------ ------------
NET INCOME           $  153,780 $  130,370 $   481,574 $   452,582
                     =========== =========== ============ ============

NET INCOME PER
 COMMON AND
 COMMON EQUIVALENT
  SHARE:
 Basic               $      .34  $      .29  $      1.06 $      1.00
                     ----------- ----------- ------------ ------------
 Diluted             $      .33  $      .28  $      1.02  $       .96
                     =========== =========== ============ ============

Shares used in
 calculation (000's)
 Basic                  456,370     454,272      455,956      453,047
 Diluted                479,183     480,256      478,889      479,250

CONTACT: Costco Wholesale Corporation Richard Galanti, 425/313-8203 or Bob Nelson, 425/313-8255 or Jeff Elliott, 425/313-8264 SOURCE: Costco Wholesale Corporation