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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
                (dollars in millions, except per share data)

                                    12 Weeks Ended        36 Weeks Ended
                                 --------------------  --------------------
                                  May 11,    May 12,    May 11,    May 12,
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
  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
  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
  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)
                                 ---------  ---------  ---------  ---------
 COSTCO                          $     473  $     459  $   1,361  $   1,422
                                 =========  =========  =========  =========

  Basic                          $    1.08  $    1.05  $    3.10  $    3.27
                                 =========  =========  =========  =========
  Diluted                        $    1.07  $    1.04  $    3.07  $    3.23
                                 =========  =========  =========  =========

Shares used in calculation
  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
                            (dollars in millions)
                        Subject to Reclassifications

                                                  May 11,      September 1,
                                                    2014           2013
                                               -------------- --------------
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
                                               ============== ==============


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
                                               ============== ==============

Costco Wholesale Corporation
Richard Galanti

Bob Nelson

Jeff Elliott

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