Costco Wholesale (COST) 8-K Costco Wholesale Corporation Reports Second Quarter and Year-to-date

Exhibit 99.1

COSTCO WHOLESALE CORPORATION REPORTS SECOND QUARTER AND YEAR-TO-DATE

OPERATING RESULTS FOR FISCAL YEAR 2011, AND FEBRUARY SALES RESULTS

ISSAQUAH, Wash., March 2, 2011 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) announced today its operating results for the second quarter (twelve weeks) and first half (24 weeks) of fiscal 2011, both ended February 13, 2011, and its February sales results for the four weeks ended February 27, 2011.

Net sales for the quarter increased eleven percent, to $20.45 billion, from $18.36 billion during the second quarter of fiscal 2010. Net sales for the first half increased eleven percent, to $39.27 billion, from $35.28 billion last year. This year’s results include sales from the Company’s 50% owned Mexico joint venture, as the Company began consolidating its Mexico operations on a prospective basis beginning with its 2011 fiscal year. Mexico sales accounted for approximately three percentage points of the increase for both the quarter and the year-to-date sales.

Comparable sales for the second quarter and first half of fiscal 2011, including Mexico operations for both this and last year, were as follows:

	12 Weeks			24 Weeks
U.S.		5	%		5	%
International		12	%		13	%
Total		7	%		7	%

Inflation in gasoline prices and strengthening foreign currencies had a positive impact on comparable sales. Excluding these effects, comparable sales were as follows:

	12 Weeks			24 Weeks
U.S.		3	%		3	%
International		8	%		9	%
Total		4	%		5	%

Net income for the quarter was $348 million, or $.79 per diluted share, compared to $299 million, or $.67 per diluted share, last year. Net income for the first half was $660 million, or $1.49 per diluted share, compared to $565 million, or $1.27 per diluted share, last year. The quarter last year included a $22 million pre-tax charge ($0.03 per diluted share) related to a change in employee benefits. The consolidation of the Mexico joint venture had no impact on net income or earnings per share attributable to Costco.

The Company today also reported net sales of $6.38 billion for the four weeks ended February 27, 2011, an increase of fourteen percent from $5.61 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-six weeks ended February 27, 2011, which includes the first two weeks of the Company’s fiscal third quarter, the Company reported net sales of $42.46 billion, an increase of twelve percent from $38.06 billion during the comparable period of the prior fiscal year. Mexico sales accounted for approximately three percentage points of the increase for both the four-week and twenty-six week periods.

Comparable sales for the 4-week retail-reporting month of February and the 26-week retail-reporting period of September through February, including Mexico operations for both this and last year, were as follows:

	4 Weeks			26 Weeks
U.S.		6	%		5	%
International		14	%		14	%
Total		8	%		7	%

Inflation in gasoline prices and strengthening foreign currencies had a positive impact on comparable sales. Excluding these effects, comparable sales were as follows:

	4 Weeks			26 Weeks
U.S.		4	%		4	%
International		7	%		9	%
Total		5	%		5	%

Costco currently operates 581 warehouses, including 424 in the United States and Puerto Rico, 80 in Canada, 22 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 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 an additional fifteen to sixteen new warehouses (including the relocation of a warehouse to a larger and better-located facility and the reopening of San Marcos, CA – closed for an onsite relocation) prior to the end of its 2011 fiscal year on August 28, 2011.

A conference call to discuss these second quarter operating results and February sales is scheduled for 8:00 a.m. (PT) today, March 2, 2011, 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, conditions affecting the acquisition, development, ownership or use of real estate, actions of vendors, rising costs associated with employees (including health care costs), 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.

CONTACTS: Costco Wholesale Corporation

Richard Galanti, 425/313-8203, Bob Nelson, 425/313-8255, Jeff Elliott, 425/313-8264

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)

	12 Weeks Ended						24 Weeks Ended
	February 13, 2011			February 14, 2010			February 13, 2011			February 14, 2010
REVENUE
Net sales	$	20,449		$	18,356		$	39,272		$	35,278
Membership fees		426			386			842			763
Total revenue		20,875			18,742			40,114			36,041
OPERATING EXPENSES
Merchandise costs		18,235			16,396			34,992			31,477
Selling, general and administrative		2,038			1,873			3,979			3,650
Preopening expenses		4			3			16			14
Provision for impaired assets and closing costs, net		2			—			6			2
Operating income		596			470			1,121			898
OTHER INCOME (EXPENSE)
Interest expense		(27	)		(26	)		(53	)		(50	)
Interest income and other, net		4			30			9			48
INCOME BEFORE INCOME TAXES		573			474			1,077			896
Provision for income taxes		204			169			376			321
Net income including noncontrolling interests		369			305			701			575
Net income attributable to noncontrolling interests		(21	)		(6	)		(41	)		(10	)
NET INCOME ATTRIBUTABLE TO COSTCO	$	348		$	299		$	660		$	565
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic	$	0.80		$	0.68		$	1.52		$	1.29
Diluted	$	0.79		$	0.67		$	1.49		$	1.27
Shares used in calculation (000’s)
Basic		436,682			439,786			435,385			438,475
Diluted		443,186			446,918			442,283			445,870
Dividends per share	$	0.205		$	0.18		$	0.41		$	0.36

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions)

(unaudited)

Subject to Reclassifications

	February 13, 2011		August 29, 2010
ASSETS
Cash and cash equivalents	$	3,355	$	3,214
Short-term investments		2,024		1,535
Receivables, net		1,116		884
Merchandise inventories		6,127		5,638
Deferred income taxes and other current assets		516		437
Total current assets		13,138		11,708
Property and equipment, net		12,102		11,314
Other assets		476		793
TOTAL ASSETS	$	25,716	$	23,815
LIABILITIES AND EQUITY
Accounts payable	$	5,970	$	5,947
Short-term borrowings		1		26
Other current liabilities		4,775		4,090
Total current liabilities		10,746		10,063
Long-term debt, excluding current portion		2,144		2,141
Deferred income taxes and other liabilities		702		681
Total liabilities		13,592		12,885
Total Costco stockholders’ equity		11,583		10,829
Noncontrolling interests		541		101
Total equity		12,124		10,930
TOTAL LIABILITIES AND EQUITY	$	25,716	$	23,815