News Release

Costco Wholesale Corporation Releases Fourth Quarter and Fiscal Year 2003 Results of Operations and September Sales Results
ISSAQUAH, Wash.--(BUSINESS WIRE)--Oct. 8, 2003--Costco Wholesale Corporation (Nasdaq: COST) announced today its results of operations for the 16 weeks (fourth quarter) and the 52 weeks (fiscal year) ended August 31, 2003.
Net sales for fiscal 2003, the 52 weeks ended August 31, 2003, were $41.69 billion, an increase of 10% from $37.99 billion during the prior 52-week fiscal year ended September 1, 2002. Comparable warehouse sales increased 5% over the comparable 52-week period of fiscal 2002. Net sales for the 16-week fourth quarter ended August 31, 2003, increased 11% to $13.42 billion from $12.05 billion during the 16-week fourth quarter ended September 1, 2002. Comparable warehouse sales during the 16-week fourth quarter of fiscal 2003 increased 7% over the comparable 16-week period in the prior fiscal year.
Net income for the 16-week fourth quarter decreased 3% to $239.4 million, or $.51 per diluted share, from $247.4 million, or $.52 per diluted share, during the 16-week fourth quarter of fiscal 2002. Net income for fiscal 2003 increased 3% to $721.0 million, or $1.53 per diluted share, from $700.0 million, or $1.48 per diluted share during fiscal year 2002. The fiscal 2003 net income reflects an effective income tax rate of 36.18% for the fourth quarter and 37.75% for the fiscal year, compared with an effective tax rate of 35.55% for the 2002 fourth quarter and 38.50% for the fiscal year.
In addition to reporting fourth quarter and fiscal year 2003 operating results, the Company today also reported net sales of $4.07 billion for the month of September, the five weeks ended October 5, 2003, an increase of 13% from $3.59 billion in the same five-week period of the prior fiscal year. On a comparable warehouse basis, that is warehouses open at least a year, sales increased 10% during this five-week period.
Comparable sales for the 5-week September sales period ended October 5, 2003 were as follows: 5 Weeks ------------ US 9% International 16% Total Company 10% ============
In addition, the Company announced that, effective October 3rd, one of Costco's subsidiaries acquired from Carrefour Nederland B.V. it's 20% equity interest in Costco Wholesale UK Limited, bringing Costco's ownership in Costco Wholesale UK Limited to 100%. Costco Wholesale UK Limited currently operates 15 Costco warehouse locations - 12 in England and three in Scotland. One to two additional units are currently planned to be opened prior to the end of calendar year 2004.
A conference call to discuss these fiscal 2003 fourth quarter and year-end results, as well as the September sales results, is scheduled for 8:00 a.m. (PDT) today, October 8, 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).
Costco currently operates 420 warehouses, including 310 in the United States, 61 in Canada, 15 in the United Kingdom, five in Korea, three in Taiwan, four in Japan and 22 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com. The Company plans to open an additional 10 warehouses (including the relocation of one existing warehouse to a larger and better-located facility) prior to the end of the 2003 calendar year.
COSTCO WHOLESALE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (unaudited) 16 Weeks 16 Weeks 52 Weeks 52 Weeks Ended Ended Ended Ended Aug. 31, Sept. 1, Aug. 31, Sept. 1, 2003 2002 2003 2002 ------------ ------------ ------------ ------------ REVENUE Net sales $13,416,845 $12,050,797 $41,692,699 $37,993,093 Membership fees and other 272,884 245,550 852,853 769,406 ------------ ------------ ------------ ------------ Total revenue 13,689,729 12,296,347 42,545,552 38,762,499 OPERATING EXPENSES Merchandise costs 11,987,752 10,753,443 37,235,383 33,983,121 Selling, general and administrative 1,318,259 1,142,796 4,097,398 3,575,536 Preopening expenses 5,528 14,430 36,643 51,257 Provision for impaired assets and closing costs 4,000 5,000 19,500 21,050 ------------ ------------ ------------ ------------ Operating income 374,190 380,678 1,156,628 1,131,535 OTHER INCOME (EXPENSE) Interest expense (11,734) (8,016) (36,920) (29,096) Interest income and other 12,729 11,218 38,525 35,745 ------------ ------------ ------------ ------------ INCOME BEFORE INCOME TAXES 375,185 383,880 1,158,233 1,138,184 Provision for income taxes 135,759 136,479 437,233 438,201 ------------ ------------ ------------ ------------ NET INCOME $ 239,426 $ 247,401 $ 721,000 $ 699,983 ============ ============ ============ ============ NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE: Basic $ 0.52 $ 0.54 $ 1.58 $ 1.54 ============ ============ ============ ============ Diluted $ 0.51 $ 0.52 $ 1.53 $ 1.48 ============ ============ ============ ============ Shares used in calculation (000's) Basic 457,187 455,008 456,335 453,650 Diluted 480,384 479,240 479,326 479,262
CONTACT: Costco Wholesale Corporation Richard Galanti, 425/313-8203 Bob Nelson, 425/313-8255 Jeff Elliott, 425/313-8264 SOURCE: Costco Wholesale Corporation