Costco currently operates 452 warehouses, including 334 in the United States and Puerto Rico, 64 in Canada, 15 in the United Kingdom, five in Korea, four in Taiwan, five in Japan and 25 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada. The Company plans to open 8 to 10 additional new warehouses prior to the end of its fiscal year 2005, on August 28, 2005

Net income for the second quarter of fiscal 2007 was $249.5 million, or $.54 per diluted share, compared to $296.2 million, or $.62 per diluted share, during the second quarter of fiscal 2006. Included in this year's second quarter results are three non-recurring items: (i) the $48.1 million pre-tax charge reflecting the reduced gross margin on the revised sales return reserve (discussed above); (ii) a pre-tax charge of $46.4 million associated with reducing adverse income tax consequences arising from the review of stock options by a special committee of the Board of Directors (this is $23.6 million less than the estimated expected charge announced last quarter); and (iii) a $10.1 million pre-tax benefit primarily to merchandise costs for an excise tax refund on prior merchandise sales of phone cards. Excluding these one-time items, second quarter net income would have been $302.9 million, or $.66 per diluted share. 

Net sales for the first half of fiscal 2007 increased 8% to $28.66 billion from $26.46 billion during the first half of fiscal 2006. Excluding the sales return reserve adjustment recorded in the second quarter, net sales for the first half of fiscal 2007 would have been $28.88 billion, or a 9% increase over the prior year. 

Net income for the first half of fiscal 2007 was $486.4 million, or $1.05 per diluted share, compared to net income for the first half of fiscal 2006 of $512.0 million, or $1.06 per diluted share. Excluding the three non-recurring items, as previously outlined, net income for the first half of fiscal 2007 would have been $539.5 million or $1.16 per diluted share, a 9% increase in earnings per diluted share over the prior year. 

Comparable sales for the fiscal second quarter (12 weeks) and fiscal first half (24 weeks) of fiscal 2007, both ended February 18, 2007, were as follows: 

                                   12 Weeks   24 Weeks
                                   ---------  ---------
              US                       5%         4%
              International            4%         8%
              Total Company            5%         5%
                                   =========  =========
The Company today also reported net sales of $4.60 billion for the four weeks ended March 4, 2007, an increase of 9% from $4.22 billion in the same four-week period of the prior fiscal year. For the six-month retail reporting period of September through February, the twenty-seven weeks ended March 4, 2007, which includes the first two weeks of the Company's fiscal third quarter, the Company reported net sales of $32.40 billion, an increase of 9% from $29.65 billion during the comparable period of the prior fiscal year. These sales results exclude the adjustment to our sales returns reserve described above.
 

Costco Wholesale Corporation Reports August Sales Results and Revises Earnings Outlook for Its Fiscal Fourth Quarter 
ISSAQUAH, WA, Aug 30, 2006 (MARKET WIRE via COMTEX News Network) -- Costco Wholesale Corporation ("Costco") (NASDAQ: COST) today reported net sales of $4.55 billion for the four weeks ended August 27, 2006, an increase of 11 percent from $4.08 billion in the same four-week period last year. 

For the first 52 weeks of its (53-week) 2006 fiscal year ending September 3, 2006, the Company reported net sales of $57.78 billion, an increase of 11 percent from $51.86 billion during the similar 52-week period of the prior fiscal year. 

Comparable sales for the 4-week and 52-week periods ended August 27, 2006, were as follows: 

                                         4 Weeks     52 Weeks
                                       ---------     ----------
                  US                       5%            7%
                  International           16%           11%
                  Total Company            7%            8%
                                      =========     ==========

The Company also announced the revision of its outlook for fiscal 2006 fourth quarter (17 weeks this year vs. 16 weeks in fiscal 2005) and fiscal year (53 weeks this fiscal year vs. 52 weeks last year) ending September 3, 2006. On May 31st, during its third quarter earnings conference call, the Company stated that the then First Call consensus earnings per share estimates for the fourth quarter and fiscal year of $.77 and $2.33, respectively, were "at the high end of Company expectations." Currently, earnings per share for the fourth quarter are expected to be $.68-$.71; and for the fiscal year $2.23-$2.26 per share. These estimates include a one-time income tax charge of approximately $.03 per share, further described below. Actual results for the fourth quarter and fiscal year ending September 3, 2006 will be reported on October 12, 2006, and are subject to further refinement in the closing process. 

During fiscal year 2005, the Company reported earnings per share of $.73 in the fourth quarter and $2.18 for the fiscal year. The fiscal year 2005 results included several one-time items that in the aggregate positively impacted reported earnings by approximately $.07 per share in last year's fiscal fourth quarter and by approximately $.14 per share for all of fiscal year 2005. As previously disclosed, exclusive of these items, the Company estimated its "normalized" fourth quarter and fiscal year 2005 earnings per share figures were $.66 and $2.04, respectively.