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

Exhibit 99.1

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

OPERATING RESULTS FOR FISCAL YEAR 2011

ISSAQUAH, Wash., May 25, 2011 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) announced today its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2011, both ended May 8, 2011.

Net sales for the quarter increased 16 percent, to $20.19 billion, from $17.39 billion during the third quarter of fiscal 2010. Net sales for the first thirty-six weeks increased 13 percent, to $59.46 billion, from $52.66 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 beginning with its 2011 fiscal year. Mexico sales accounted for approximately three percentage points of the increase for the quarter and the year-to-date sales.

Comparable sales for the third quarter and first thirty-six weeks of fiscal 2011, including Mexico operations for this year and last year, were as follows:

	12 Weeks			36 Weeks
U.S.		10	%		6	%
International		18	%		15	%
Total		12	%		9	%

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			36 Weeks
U.S.		6	%		4	%
International		11	%		10	%
Total		7	%		6	%

Net income for the quarter was $324 million, or $.73 per diluted share, compared to $306 million, or $.68 per diluted share, last year. Net income for the first thirty-six weeks was $984 million, or $2.22 per diluted share, compared to $871 million, or $1.95 per diluted share, last year. The consolidation of the Mexico joint venture had no impact on net income or earnings per share attributable to Costco. The quarter this year included a $49 million pre-tax LIFO charge ($.07 per diluted share). There was no LIFO charge in any quarter of fiscal 2010. The prior year’s third-quarter results were positively affected by a $14 million pretax benefit ($.02 per diluted share) related to a partial reversal of a Canadian tax liability.

Costco currently operates 581 warehouses, including 425 in the United States and Puerto Rico, 80 in Canada, 32 in Mexico, 22 in the United Kingdom, seven in Korea, six in Taiwan, eight in Japan, and one in Australia. 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 up to eleven additional warehouses prior to the end of its 2011 fiscal year on August 28, 2011.

A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 25, 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), 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.

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						36 Weeks Ended
	May 8, 2011			May 9, 2010			May 8, 2011			May 9, 2010
REVENUE
Net sales	$	20,188		$	17,385		$	59,460		$	52,663
Membership fees		435			395			1,277			1,158
Total revenue		20,623			17,780			60,737			53,821
OPERATING EXPENSES
Merchandise costs		18,067			15,494			53,059			46,971
Selling, general and administrative		1,991			1,789			5,970			5,439
Preopening expenses		8			3			24			17
Provision for impaired assets and closing costs, net		1			3			7			5
Operating income		556			491			1,677			1,389
OTHER INCOME (EXPENSE)
Interest expense		(27	)		(27	)		(80	)		(77	)
Interest income and other, net		5			10			14			58
INCOME BEFORE INCOME TAXES		534			474			1,611			1,370
Provision for income taxes		193			163			569			484
Net income including noncontrolling interests		341			311			1,042			886
Net income attributable to noncontrolling interests		(17	)		(5	)		(58	)		(15	)
NET INCOME ATTRIBUTABLE TO COSTCO	$	324		$	306		$	984		$	871
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic	$	0.74		$	0.69		$	2.26		$	1.98
Diluted	$	0.73		$	0.68		$	2.22		$	1.95
Shares used in calculation (000’s)
Basic		436,977			440,973			435,913			439,306
Diluted		443,570			448,391			442,727			446,709
Dividends per share	$	0.24		$	0.205		$	0.65		$	0.565

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions)

(unaudited)

Subject to Reclassifications

	May 8, 2011		August 29, 2010
ASSETS
Cash and cash equivalents	$	4,082	$	3,214
Short-term investments		2,133		1,535
Receivables, net		948		884
Merchandise inventories		6,396		5,638
Deferred income taxes and other current assets		510		437
Total current assets		14,069		11,708
Property and equipment, net		12,300		11,314
Other assets		605		793
TOTAL ASSETS	$	26,974	$	23,815
LIABILITIES AND EQUITY
Accounts payable	$	6,800	$	5,947
Short-term borrowings		1		26
Other current liabilities		5,693		4,090
Total current liabilities		12,494		10,063
Long-term debt, excluding current portion		1,247		2,141
Deferred income taxes and other liabilities		692		681
Total liabilities		14,433		12,885
Total Costco stockholders’ equity		11,963		10,829
Noncontrolling interests		578		101
Total equity		12,541		10,930
TOTAL LIABILITIES AND EQUITY	$	26,974	$	23,815