Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2016

ISSAQUAH, WA--(Marketwired - May 25, 2016) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) today announced its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2016, ended May 8, 2016.

Net sales for the quarter increased two percent, to $26.15 billion from $25.52 billion last year. Net sales for the first thirty-six weeks increased two percent, to $80.34 billion from $78.67 billion last year.

Comparable sales for the twelve-week and thirty-six-week periods were as follows:

		12 Weeks			36 Weeks
U.S.		0	%		2	%
Canada		1	%		-5	%
Other International		-2	%		-4	%
Total Company		0	%		0	%

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

		12 Weeks			36 Weeks
U.S.		3	%		4	%
Canada		8	%		9	%
Other International		3	%		5	%
Total Company		3	%		5	%

Net income for the quarter was $545 million, or $1.24 per diluted share, compared to $516 million, or $1.17 per diluted share, last year. Net income for the thirty-six weeks was $1.57 billion, or $3.56 per diluted share, compared to $1.61 billion, or $3.64 per diluted share, last year. Net income for the thirty-six-week period last year was positively impacted by $43 million ($0.10 per diluted share) in net nonrecurring income tax benefits.

Costco currently operates 705 warehouses, including 493 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 25 in Japan, 12 in Korea, 12 in Taiwan, eight in Australia and two in Spain. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2016 third quarter operating results is scheduled for 8:00 a.m. (PT) on May 26, 2016, 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, capital spending, 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. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law.

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
				12 Weeks Ended								36 Weeks Ended
				May 8, 2016				May 10, 2015				May 8, 2016				May 10, 2015
REVENUE
	Net sales			$	26,151			$	25,517			$	80,345			$	78,673
	Membership fees				618				584				1,814				1,748
		Total revenue			26,769				26,101				82,159				80,421
OPERATING EXPENSES
	Merchandise costs				23,162				22,687				71,252				69,969
	Selling, general and administrative				2,731				2,579				8,372				7,946
	Preopening expenses				18				14				54				38
		Operating income			858				821				2,481				2,468
OTHER INCOME (EXPENSE)
	Interest expense				(30	)			(31	)			(94	)			(84	)
	Interest income and other, net				7				9				51				64
INCOME BEFORE INCOME TAXES					835				799				2,438				2,448
	Provision for income taxes				286				280				847				817
	Net income including noncontrolling interests				549				519				1,591				1,631
	Net income attributable to noncontrolling interests				(4	)			(3	)			(20	)			(21	)
NET INCOME ATTRIBUTABLE TO COSTCO				$	545			$	516			$	1,571			$	1,610
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
	Basic			$	1.24			$	1.17			$	3.58			$	3.66
	Diluted			$	1.24			$	1.17			$	3.56			$	3.64
	Shares used in calculation: (000's)
		Basic			438,815				440,070				438,930				439,733
		Diluted			441,066				443,132				441,321				442,721
Cash dividends declared per common share				$	0.45			$	0.40			$	1.25			$	6.11

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
				May 8,  2016				August 30,  2015
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	4,884			$	4,801
	Short-term investments				1,137				1,618
	Receivables, net				1,300				1,224
	Merchandise inventories				8,927				8,908
	Other current assets				294				228
		Total current assets			16,542				16,779
PROPERTY AND EQUIPMENT
	Land				5,266				4,961
	Buildings and improvements				13,645				12,618
	Equipment and fixtures				5,834				5,274
	Construction in progress				707				811
					25,452				23,664
	Less accumulated depreciation and amortization				(8,961	)			(8,263	)
		Net property and equipment			16,491				15,401
OTHER ASSETS					840				837
		TOTAL ASSETS		$	33,873			$	33,017
LIABILITIES AND EQUITY
CURRENT LIABILITIES
	Accounts payable			$	8,828			$	9,011
	Current portion of long-term debt				1,193				1,283
	Accrued salaries and benefits				2,398				2,468
	Accrued member rewards				861				813
	Deferred membership fees				1,416				1,269
	Other current liabilities				2,303				1,695
		Total current liabilities			16,999				16,539
LONG-TERM DEBT, excluding current portion					3,921				4,852
OTHER LIABILITIES					1,205				783
		Total liabilities			22,125				22,174
COMMITMENTS AND CONTINGENCIES
EQUITY
	Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding				0				0
	Common stock $.005 par value; 900,000,000 shares authorized; 438,368,000 and 437,952,000 shares issued and outstanding				2				2
	Additional paid-in capital				5,404				5,218
	Accumulated other comprehensive loss				(1,126	)			(1,121	)
	Retained earnings				7,225				6,518
		Total Costco stockholders' equity			11,505				10,617
	Noncontrolling interests				243				226
		Total equity			11,748				10,843
		TOTAL LIABILITIES AND EQUITY		$	33,873			$	33,017