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Costco Wholesale Corporation Reports First Quarter Operating Results for Fiscal 2009

ISSAQUAH, WA, Dec 11, 2008 (MARKET WIRE via COMTEX News Network) -- Costco Wholesale Corporation (NASDAQ: COST) announced today its operating results for the first quarter (twelve weeks) of fiscal 2009, ended November 23, 2008.

Net sales for the first quarter of fiscal 2009 increased four percent to $16.04 billion from $15.47 billion during the first quarter of fiscal 2008. On a comparable warehouse basis, that is warehouses open at least one year, net sales increased one percent.

Comparable sales for the first quarter of fiscal 2009 were negatively impacted by foreign exchange (primarily in Canada, United Kingdom and Korea), as follows:

                                 12 Weeks               12 Weeks
                              (as reported)       (in local currencies)
                              --------------        ----------------
         U.S.                       +3%                    +3%
         International              -7%                    +7%
         Total Company              +1%                    +4%
                              ==============        ================

Net income for the first quarter of fiscal 2009 was $262.5 million, or $.60 per diluted share, compared to $262.0 million, or $.59 per diluted share, during the first quarter of fiscal 2008.

According to Richard Galanti, Chief Financial Officer of Costco, "First quarter 2009 results benefited from very strong gasoline profitability when compared to last year. Results were hurt by a slowdown in non-food discretionary sales and related reductions in margins associated with these sales, primarily in the latter half of the quarter. In addition, we incurred certain pretax charges of $34.2 million, or $.05 per share, related to the 'mark-to-market' adjustment of the cash surrender value of certain life insurance contracts ($28.4 million charge to SG&A Expense) and the impairment of corporate investments ($5.8 million charge to interest income). Finally, our first quarter earnings were negatively impacted by an estimated $22.7 million pretax, or $.03 per share, as a result of the significant strengthening during the quarter of the U.S. dollar, as compared to the Canada, United Kingdom, Korea and Mexico currencies."

Costco currently operates 550 warehouses, including 403 in the United States and Puerto Rico, 76 in Canada, 21 in the United Kingdom, six in Korea, five in Taiwan, eight in Japan and 31 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada.

A conference call to discuss these results is scheduled for 8:00 a.m. (PT) today, December 11, 2008, and is available via a webcast on www.costco.com (click on Investor Relations and "Webcasts").

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 and workers' compensation costs), rising costs associated with the acquisition of merchandise (including the direct and indirect effects of the rising cost of petroleum-based products and fuel and energy 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 thousands, except per share data)
                                (unaudited)
                                                      12 Weeks Ended
                                                --------------------------
                                                November 23,  November 25,
                                                    2008          2007
                                                ------------  ------------
REVENUE
   Net sales                                    $ 16,035,452  $ 15,471,500
   Membership fees                                   358,714       338,030
                                                ------------  ------------
      Total revenue                               16,394,166    15,809,530
OPERATING EXPENSES
   Merchandise costs                              14,276,670    13,823,511
   Selling, general and administrative             1,676,995     1,569,594
   Preopening expenses                                12,849        21,492
   Provision for impaired assets and closing
    costs, net                                         6,764            79
                                                ------------  ------------
      Operating income                               420,888       394,854
OTHER INCOME (EXPENSE)
   Interest expense                                  (24,623)      (22,968)
   Interest income and other                          18,177        33,277
                                                ------------  ------------
INCOME BEFORE INCOME TAXES                           414,442       405,163
   Provision for income taxes                        151,942       143,182
                                                ------------  ------------
NET INCOME                                      $    262,500  $    261,981
                                                ============  ============
NET INCOME PER COMMON SHARE:
   Basic                                        $       0.61  $       0.60
                                                ============  ============
   Diluted                                      $       0.60  $       0.59
                                                ============  ============
Shares used in calculation (000's)
   Basic                                             432,451       435,090
   Diluted                                           440,533       445,717
Dividends per share                             $      0.160  $      0.145

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

SOURCE: Costco