News Release

Costco Wholesale Corporation Releases Fourth Quarter and Fiscal Year 2002 Results of Operations and September Sales Results
Net sales for fiscal 2002, the 52 weeks ended September 1, 2002, were $37.99 billion, an increase of 11% from $34.14 billion during the prior 52-week fiscal year ended September 2, 2001. Comparable warehouse sales increased 6% over the comparable 52-week period of fiscal 2001. Net sales for the 16-week fourth quarter ended September 1, 2002, increased 10% to $12.05 billion from $10.91 billion during the 16-week fourth quarter ended September 2, 2001. Comparable warehouse sales during the 16-week fourth quarter of fiscal 2002 increased 6% over the comparable 16-week period in the prior fiscal year.
Net income for the 16-week fourth quarter increased 30% to $247.4 million, or $.52 per diluted share, from $190.7 million, or $.41 per diluted share, during the 16-week fourth quarter of fiscal 2001. Net income for fiscal 2002 increased 16% to $700.0 million, or $1.48 per diluted share, from $602.1 million, or $1.29 per diluted share during fiscal year 2001. The fiscal 2002 net income reflects an effective income tax rate of 35.55% for the fourth quarter and 38.50% for the fiscal year, compared with an effective tax rate of 40.00% for the 2001 fourth quarter and fiscal year.
In addition to reporting fourth quarter and fiscal year 2002 operating results, the Company today also reported net sales of $3.59 billion for the five weeks ended October 6, 2002, an increase of 10% from $3.26 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 5% during this five-week period.
Comparable sales for the 5-week September sales period ended October 6, 2002 were as follows:
5 Weeks --------------- US 4% International 9% Total Company 5% ===============A conference call to discuss these fiscal 2002 fourth quarter and year-end results, as well as the September sales results, is scheduled for 8:00 a.m. (PDT) today, October 10, 2002, 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 401 warehouses, including 295 in the United States, 60 in Canada, 15 in the United Kingdom, five in Korea, three in Taiwan, three in Japan and 20 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com. The Company plans to open an additional 12 to 14 warehouses (including the relocation of one existing warehouse to a larger and better-located facility) prior to the end of the 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 September 1, September 2, September 1, September 2, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ REVENUE Net sales........ $12,050,797 $10,914,568 $37,993,093 $34,137,021 Membership fees and other....... 245,550 219,987 769,406 660,016 ------------ ------------ ------------ ------------ Total revenue.. 12,296,347 11,134,555 38,762,499 34,797,037 OPERATING EXPENSES Merchandise costs 10,753,443 9,782,902 33,983,121 30,598,140 Selling, general and administrative.. 1,142,796 1,000,663 3,575,536 3,129,059 Preopening expenses........ 14,430 16,568 51,257 59,571 Provision for impaired assets and closing costs........... 5,000 16,000 21,050 18,000 ------------ ------------ ------------ ------------ Operating income........ 380,678 318,422 1,131,535 992,267 OTHER INCOME (EXPENSE) Interest expense. (8,016) (7,135) (29,096) (32,024) Interest income and other....... 11,218 6,603 35,745 43,238 ------------ ------------ ------------ ------------ INCOME BEFORE INCOME TAXES..... 383,880 317,890 1,138,184 1,003,481 Provision for income taxes.... 136,479 127,156 438,201 401,392 ------------ ------------ ------------ ------------ NET INCOME $247,401 $190,734 $699,983 $602,089 ============ ============ ============ ============ NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE: Basic............ $0.54 $0.42 $1.54 $1.34 ============ ============ ============ ============ Diluted.......... $0.52 $0.41 $1.48 $1.29 ============ ============ ============ ============ Shares used in calculation (000's) Basic............ 455,008 451,310 453,650 449,631 Diluted.......... 479,240 477,875 479,262 475,827
CONTACT: Costco Wholesale Corporation Richard Galanti, 425/313-8203 or Bob Nelson, 425/313-8255