COST Costco Wholesale Corporation

Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2021, ended November 22, 2020.

Net sales for the first quarter increased 16.9 percent, to $42.35 billion from $36.24 billion last year.

Comparable sales for the first quarter fiscal 2021 were as follows:

		12 Weeks		12 Weeks
				Adjusted*
	U.S.	14.6%		17.0%
	Canada	16.2%		16.8%
	Other International	18.7%		17.7%
	Total Company	15.4%		17.1%
	E-commerce	86.4%		86.2%
*Excluding the impacts from changes in gasoline prices and foreign exchange.

Net income for the quarter was $1,166 million, or $2.62 per diluted share, compared to $844 million, or $1.90 per diluted share, last year. This year’s first quarter included tax benefits of $145 million or $0.33 per diluted share, $0.16 of which was due to the deductibility of the $10 per share special cash dividend, to the extent received by the Company’s 401(k) plan participants; and $0.17 cents related to stock-based compensation. Last year’s first quarter included a $77 million or $0.17 per diluted share tax benefit related to stock-based compensation. This year’s results reflect an expense for COVID-19 premium wages of $212 million pre-tax or $0.35 per diluted share.

Costco currently operates 803 warehouses, including 558 in the United States and Puerto Rico, 102 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 14 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, December 10, 2020, 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. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. 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 (generally including health-care costs), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, COVID-19 related factors and challenges, including (among others) the duration of the pandemic, the unknown long-term economic impact, reduced shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforces due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, capacity constraints of third-party logistics suppliers, 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 the Company does not undertake to update these statements, except as required by law.

CONTACTS:	Costco Wholesale Corporation
	Richard Galanti, 425/313-8203
	Bob Nelson, 425/313-8255
	David Sherwood, 425/313-8239
	Josh Dahmen, 425/313-8254

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

	12 Weeks Ended
	November 22, 2020				November 24, 2019
REVENUE
Net sales	$	42,347			$	36,236
Membership fees	861				804
Total revenue	43,208				37,040
OPERATING EXPENSES
Merchandise costs	37,458				32,233
Selling, general and administrative	4,298				3,732
Preopening expenses	22				14
Operating income	1,430				1,061
OTHER INCOME (EXPENSE)
Interest expense	(39		)		(38		)
Interest income and other, net	29				35
INCOME BEFORE INCOME TAXES	1,420				1,058
Provision for income taxes	239				202
Net income including noncontrolling interests	1,181				856
Net income attributable to noncontrolling interests	(15		)		(12		)
NET INCOME ATTRIBUTABLE TO COSTCO	$	1,166			$	844
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic	$	2.63			$	1.91
Diluted	$	2.62			$	1.90
Shares used in calculation (000’s):
Basic	442,952				441,818
Diluted	444,386				443,680

COSTCO WHOLESALE CORPORATION CONSOLIDATED BALANCE SHEETS (amounts in millions, except par value and share data) (unaudited)

Subject to Reclassification

			November 22, 2020				August 30, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	13,590			$	12,277
Short-term investments			833				1,028
Receivables, net			1,646				1,550
Merchandise inventories			14,901				12,242
Other current assets			1,126				1,023
Total current assets			32,096				28,120
OTHER ASSETS
Property and equipment, net			22,288				21,807
Operating lease right-of-use assets			2,785				2,788
Other long-term assets			3,048				2,841
TOTAL ASSETS			$	60,217			$	55,556
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable			$	17,014			$	14,172
Accrued salaries and benefits			3,586				3,605
Accrued member rewards			1,451				1,393
Deferred membership fees			1,985				1,851
Current portion of long-term debt			96				95
Other current liabilities			8,535				3,728
Total current liabilities			32,667				24,844
OTHER LIABILITIES
Long-term debt, excluding current portion			7,529				7,514
Long-term operating lease liabilities			2,574				2,558
Other long-term liabilities			2,138				1,935
TOTAL LIABILITIES			44,908				36,851
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding			—				—
Common stock $0.01 par value; 900,000,000 shares authorized; 442,955,000 and 441,255,000 shares issued and outstanding			4				4
Additional paid-in capital			6,725				6,698
Accumulated other comprehensive loss			(1,101		)		(1,297		)
Retained earnings			9,232				12,879
Total Costco stockholders’ equity			14,860				18,284
Noncontrolling interests			449				421
TOTAL EQUITY			15,309				18,705
TOTAL LIABILITIES AND EQUITY			$	60,217			$	55,556