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Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal 2001 and February Sales Results

ISSAQUAH, Wash.--(BUSINESS WIRE)--March 8, 2001--Costco Wholesale Corporation ("Costco" or the "Company") (Nasdaq:COST) announced today its operating results for the second quarter (12 weeks) and first half (24 weeks) of fiscal 2001, ended February 18, 2001.

Net sales for the second quarter of fiscal 2001 increased 7% to $8.16 billion from $7.61 billion during the second quarter of fiscal 2000. On a comparable warehouse basis, that is warehouses open at least a year, net sales increased by 2%.

Net income for the second quarter of fiscal 2001 decreased 3% to $176.6 million, or $.38 per share (diluted), from $181.6 million, or $.39 per share (diluted), during the second quarter of fiscal 2000.

Net sales for the first half of fiscal 2001 increased 8% to $15.66 billion from $14.44 billion during the first half of fiscal 2000. Comparable warehouse sales during the first half (24 weeks) of fiscal 2001 increased 3% over the prior year's levels.

Net income for the first half of fiscal 2001 decreased 2% to $306.1 million, or $.65 per diluted share, compared to net income for the first half of fiscal 2000 of $310.9 million, or $.66 per diluted share.

In addition to reporting second quarter fiscal year 2001 operating results, the Company today reported net sales of $2.45 billion for the four weeks ended March 4, 2001, an increase of 11% from $2.21 billion in the same four-week period of the prior fiscal year. On a comparable warehouse basis, that is warehouses open at least a year, sales increased 5%.

For the first twenty-six weeks of its 2001 fiscal year ended March 4, 2001, which includes the first two weeks of the Company's fiscal third quarter, the Company reported net sales of $16.90 billion, an increase of 9% from $15.51 billion during the comparable period of the prior fiscal year. Comparable sales for this year-to-date period increased 4% over the prior year's level.

Costco currently operates 352 warehouses, including 253 in the United States, 60 in Canada, 11 in the United Kingdom, four in Korea, three in Taiwan, two in Japan and 19 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com. The Company plans to open an additional 14 to 16 new warehouses (including one to two relocations of existing warehouses to larger and better-located facilities) prior to the end of its 2001 fiscal year on September 2, 2001.

A conference call to discuss these second quarter results is scheduled for 8:30 a.m. (PST) today, March 8, 2001, 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).

                     COSTCO WHOLESALE CORPORATION

              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
             (dollars in thousands, except per share data)
                              (unaudited)

                       12 Weeks Ended              24 Weeks Ended
                  ------------------------  --------------------------
                  February 18, February 13, February 18,  February 13,
                       2001        2000         2001          2000
                  -----------  -----------  ------------  ------------

REVENUE
 Net sales       $ 8,159,980  $ 7,613,601  $ 15,658,959  $ 14,437,798
 Membership fees
  and other          146,329      123,386       284,628       242,701
                  -----------  -----------  ------------  ------------
   Total revenue   8,306,309    7,736,987    15,943,587    14,680,499

OPERATING EXPENSES
 Merchandise costs 7,275,958    6,792,367    13,989,602    12,912,568
 Selling, general
  and administrative 731,411      636,739     1,422,538     1,233,456
 Preopening expenses  10,572        8,108        30,252        18,442
 Provision for
  impaired assets
  and warehouse
  closing costs        1,000        1,500         2,000         2,500
                  -----------  -----------  ------------  ------------
   Operating income  287,368      298,273       499,195       513,533

OTHER INCOME (EXPENSE)
 Interest expense     (8,902)     (10,576)      (15,866)      (20,973)
 Interest income
  and other           15,829       14,983        26,834        25,650
                  -----------  -----------  ------------  ------------
INCOME BEFORE
 INCOME TAXES        294,295      302,680       510,163       518,210
 Provision for
  income taxes       117,718      121,072       204,065       207,284
                  -----------  -----------  ------------  ------------
NET INCOME       $   176,577  $   181,608  $    306,098  $    310,926
                  ===========  ===========  ============  ============

NET INCOME PER
 COMMON AND COMMON
 EQUIVALENT SHARE:
 Basic           $      0.39  $      0.41  $       0.68  $       0.70
                  ===========  ===========  ============  ============
 Diluted         $      0.38  $      0.39  $       0.65  $       0.66
                  ===========  ===========  ============  ============
Shares used in
 calculation (000's)
 Basic               448,788      445,255       448,234       444,277
 Diluted             475,488      476,642       474,543       475,120

CONTACT:
Costco Wholesale Corporation
Richard Galanti, 425/313-8203
Bob Nelson, 425/313-8255