News Details

ISSAQUAH, Wash.--(BUSINESS WIRE)--Oct. 12, 2000--Costco Wholesale Corporation ("Costco" or the "Company") (Nasdaq:COST) announced today its results of operations for the 17 weeks (fourth quarter) and the 53 weeks (fiscal year) ended September 3, 2000.

Net sales for fiscal 2000, the 53 weeks ended September 3, 2000, were $31.62 billion, an increase of 17% from $26.98 billion during the prior 52-week fiscal year ended August 29, 1999. Comparable warehouse sales increased 11% over the comparable 53-week period of fiscal 1999. Net sales for the 17-week fourth quarter ended September 3, 2000, increased 20% to $10.41 billion from $8.66 billion during the 16-week fourth quarter ended August 29, 1999. Comparable warehouse sales during the 17-week fourth quarter of fiscal 2000 increased 9% over the comparable 17-week period in the prior fiscal year.

Net income for the 17-week fourth quarter increased 31% to $200.2 million or $.43 per diluted share, from $153.2 million, or $.33 per diluted share, during the 16-week fourth quarter of fiscal 1999. Net income in the fourth quarter of fiscal 1999 was impacted by a $50 million ($30 million after-tax, or $.06 per diluted share) provision for impaired assets and warehouse closing costs primarily related to the Company's planned increase in the number of warehouse relocations to larger and better-located facilities. Before the impact of this charge, net income for the fourth quarter of fiscal 1999 would have been $183.2 million, or $.39 per diluted share and would have resulted in a 9% fourth quarter earnings increase.

Net income for fiscal 2000, a 53-week fiscal year, increased 59% to $631.4 million or $1.35 per diluted share, from $397.3 million or $.86 per diluted share during fiscal year 1999, a 52-week fiscal year. Net income for fiscal 1999 was impacted by both the $50 million fourth quarter provision for impaired assets and warehouse closing costs, as described above, as well as a one-time $118.0 million non-cash, after-tax charge recorded in the first quarter of fiscal 1999, reflecting the cumulative effect of the Company's change in accounting for membership fees from a cash to a deferred method. Before the impact of these two charges, net earnings in fiscal 1999 would have been $545.3 million, or $1.18 per diluted share and would have resulted in a 16% increase in net income in fiscal 2000 compared to fiscal 1999.

Costco currently operates 335 warehouses, including 240 in the United States, 59 in Canada, 10 in the United Kingdom, three in Korea, three in Taiwan, one 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 17 to 18 warehouses (including the relocation of three existing warehouses to larger and better-located facilities) prior to the end of the calendar year.

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

                    17 Weeks      16 Weeks    53 Weeks     52 Weeks
                      Ended         Ended       Ended        Ended
                   ----------    ----------  ----------   ----------
                    September 3,   August 29, September 3,  August 29,
                       2000         1999         2000        1999
                   ----------    ----------  ----------   ----------
REVENUE
Net sales          $10,414,317  $ 8,656,721  $31,620,723  $26,976,453
Membership fees and
 other                 174,872      155,054      543,573      479,578
                   -----------  -----------  -----------  -----------
  Total revenue     10,589,189    8,811,775   32,164,296   27,456,031
OPERATING EXPENSES
Merchandise costs    9,325,356    7,752,045   28,322,170   24,170,199
Selling, general
 and administrative    916,975      747,485    2,755,355    2,338,198
Preopening expenses     17,151       10,229       42,321       31,007
Provision for
 impaired assets
 and warehouse
 closing costs           3,000       50,000        7,000       56,500
                   -----------  -----------  -----------  -----------
  Operating income     326,707      252,016    1,037,450      860,127
OTHER INCOME
 (EXPENSE)
  Interest expense      (8,704)     (13,096)     (39,281)     (45,527)
  Interest income
   and other            15,633       16,376       54,226       44,266
                   -----------  -----------  -----------  -----------
INCOME BEFORE
 INCOME TAXES AND
 CUMULATIVE EFFECT
 OF ACCOUNTING
 CHANGE                333,636      255,296    1,052,395      858,866
Provision for
 income taxes          133,454      102,118      420,958      343,545
                   -----------  -----------  -----------  -----------
INCOME BEFORE
 CUMULATIVE EFFECT 
 OF ACCOUNTING
 CHANGE                200,182      153,178      631,437      515,321
Cumulative effect
 of accounting
 change, net of tax         --           --           --     (118,023)
                   -----------  -----------  -----------  -----------
NET INCOME         $   200,182  $   153,178  $   631,437  $   397,298
                   ===========  ===========  ===========  ===========
NET INCOME PER
 COMMON SHARE
 Basic earnings
  per share:
   Income before
    cumulative
    effect of
    accounting 
    change         $      0.45  $      0.35  $     1.41   $      1.17
   Cumulative
    effect of
    accounting
    change, net of
    tax                     --           --          --         (0.27)

                   -----------  -----------  -----------  -----------
   Net Income      $      0.45  $      0.35  $      1.41  $      0.90
                   ===========  ===========  ===========  ===========

 Diluted earnings
  per share:
   Income before
    cumulative
    effect of
    accounting
    change          $     0.43  $     0.33   $      1.35  $      1.11

   Cumulative
    effect of
    accounting
    change, net of
    tax                     --         --             --        (0.25)

                   -----------  -----------  -----------  -----------
    Net income     $      0.43  $    0.33    $      1.35  $      0.86
                   ===========  ===========  ===========  ===========

Shares used in
 calculation 
 (000's)
  Basic                447,757      442,152      446,255      439,253
  Diluted              474,304      472,959      475,737      471,120

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