News Release

May 29, 2014 at 3:01 AM EDT

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal 2014

ISSAQUAH, WA -- (Marketwired) -- 05/29/14 -- Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the third quarter (twelve weeks) and the first thirty-six-weeks of fiscal 2014, ended May 11, 2014. Net sales for the quarter increased seven percent, to $25.23 billion, from $23.55 billion last year. Net sales for the first thirty-six weeks increased six percent, to $75.46 billion, from $71.10 billion last year.

Comparable sales were as follows:



	12 Weeks	36 Weeks
U.S.	5%	4%
International	3%	1%

Total	4%	3%

Comparable sales for these periods, excluding negative impacts from gasoline price deflation and foreign exchange, were as follows:



	12 Weeks	36 Weeks
U.S.	6%	5%
International	8%	7%

Total	6%	5%

Net income for the quarter was $473 million, or $1.07 per diluted share, compared to $459 million, or $1.04 per diluted share, last year. Net income for the first thirty-six weeks was $1.36 billion, or $3.07 per diluted share, compared to $1.42 billion, or $3.23 per diluted share, last year. Net income for the thirty-six week period last year was positively impacted by a second quarter $62 million ($.14 per diluted share) tax benefit in connection with the portion of the special cash dividend paid in December 2012 to the Company 401(k) plan participants.

Costco currently operates 655 warehouses, including 464 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 19 in Japan, 10 in Taiwan, 10 in Korea, six in Australia, and one in Spain. The Company plans to open up to an additional eight new warehouses prior to the end of its fiscal year on August 31, 2014. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 29, 2014, and is available via a webcast on www.costco.com (click on Investor Relations and "Play Webcast").

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, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, amounts expected to be spent on expansion plans, actions of vendors, rising costs associated with employees (including health care costs), energy, and certain commodities, 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 millions, except per share data)
(unaudited)


			12 Weeks Ended						36 Weeks Ended
			May 11, 2014			May 12, 2013			May 11, 2014			May 12, 2013
REVENUE
	Net sales		$	25,233		$	23,552		$	75,457		$	71,099
	Membership fees			561			531			1,660			1,570
		Total revenue		25,794			24,083			77,117			72,669
OPERATING EXPENSES
	Merchandise costs			22,554			21,038			67,421			63,530
	Selling, general and administrative			2,487			2,313			7,519			7,006
	Preopening expenses			16			10			48			34
		Operating income		737			722			2,129			2,099
OTHER INCOME (EXPENSE)
	Interest expense			(25	)		(25	)		(78	)		(63	)
	Interest income and other, net			12			15			60			61
INCOME BEFORE INCOME TAXES				724			712			2,111			2,097
	Provision for income taxes			245			248			728			658
Net income including noncontrolling interests				479			464			1,383			1,439
Net income attributable to noncontrolling interests				(6	)		(5	)		(22	)		(17	)
NET INCOME ATTRIBUTABLE TO COSTCO			$	473		$	459		$	1,361		$	1,422

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
	Basic		$	1.08		$	1.05		$	3.10		$	3.27
	Diluted		$	1.07		$	1.04		$	3.07		$	3.23

Shares used in calculation (000's)
	Basic			439,446			436,488			439,058			435,293
	Diluted			442,720			440,780			442,651			439,738



Cash dividends declared per common share			$	0.355		$	0.31		$	0.975		$	7.86



COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications


		May 11, 2014		September 1, 2013
ASSETS
Cash and cash equivalents		$	5,736	$	4,644
Short-term investments			1,539		1,480
Receivables, net			1,115		1,201
Merchandise inventories			8,483		7,894
Deferred income taxes and other current assets			660		621
	Total current assets		17,533		15,840
Property and equipment, net			14,583		13,881
Other assets			585		562
TOTAL ASSETS		$	32,701	$	30,283

LIABILITIES AND EQUITY

Accounts payable		$	8,361	$	7,872
Accrued salaries and benefits			2,056		2,037
Other current liabilities			2,973		2,181
Deferred membership fees			1,297		1,167
	Total current liabilities		14,687		13,257
Long-term debt, excluding current portion			4,985		4,998
Deferred income taxes and other liabilities			1,008		1,016
	Total liabilities		20,680		19,271

Total Costco stockholders' equity			11,819		10,833
Noncontrolling interests			202		179
	Total equity		12,021		11,012
TOTAL LIABILITIES AND EQUITY		$	32,701	$	30,283

CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203

Bob Nelson
425/313-8255

Jeff Elliott
425/313-8264

Source: Costco