Costco Wholesale Corporation Reports April Sales Results

Costco Wholesale Corporation reported net sales of $5.83 billion for the month of April, the four weeks ended May 2, 2010, an increase of 13 percent from $5.18 billion in the same four-week period last year. This year's four-week period for April included 28 days of sales compared to 27 last year; Easter fell in the reporting month of April last year. This calendar shift positively impacted this year's April total and comparable sales by approximately two to three percent.

For the thirty-five weeks ended May 2, 2010, the Company reported net sales of $51.04 billion, an increase of 9 percent from $46.66 billion during the similar period last year. Inflation in gasoline prices and strengthening foreign currencies had a positive impact on comparable sales.

Additional discussion of these sales results is available in a pre-recorded telephone message. You can access the recording by dialing 1-800-642-1687 (conference ID 44186110). This message will be available today through 5:00 p.m. (PT) on Friday, May 7, 2010.

Costco currently operates 567 warehouses, including 414 in the United States and Puerto Rico, 77 in Canada, 21 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 up to six additional new warehouses prior to the end of its fiscal year on August 29, 2010.

Certain statements contained in this document and the pre-recorded telephone message-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.

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South-side Costco seems a sure thing

South-side residents could be shopping at a new Costco Wholesale by March 2011, after development plans for the site were approved by the city last week. The developer - Eastbourne Investments Ltd. and Retail West - still need city approval for grading and building plans, but both sides anticipate final construction approval by March.

Costco representatives did not return calls for comment on Monday. But Cindy Ayala, president of the nearby Pueblo Gardens Neighborhood Association, who was involved in talks with the company, said she was told opening is planned for March 2011, a date that was confirmed by other sources.

The new Costco - the third in the Tucson region - would be on 14 acres at Interstate 10 and South Kino Parkway. It is part of a larger commercial project that would cover about 115 acres from I-10 and Kino west to South Park Avenue. The other Costcos are at East Grant Road near East Tanque Verde Road, and off North Thornydale Road near West Orange Grove Road.

That retail "power center" is the anchor of a larger 350-acre project called "The Bridges," bounded roughly by I-10, East 36th Street, Park and Kino. In addition to a retail development, plans for the site include a 65-acre biosciences park to be developed by the University of Arizona at Kino and East 36th Street, and 110 acres for an upscale housing development.

The new Costco would measure 180,000 square feet, which is a "big-box" under Tucson code that classifies every store of more than 100,000 square feet as a big-box store that has to follow special rules.

After years of city debate about the property, the City Council voted 6-1 in March 2007 to allow a big box on site, but with extra conditions put on Eastbourne, including $2 million to pay for job training, business-assistance programs, neighborhood improvements, economic-improvement grants to area nonprofit organizations, and improvements for pedestrian access and roads. That money will be matched with $4.5 million the city expects from construction sales taxes at the site.

Jim Portner, a consultant for the project's developers, said the 14 acres will be sold to Costco after the final construction permits are obtained from the city. The remaining retail will be developed by Eastbourne and Retail West, he said, although there are no other stores currently signed on to move in. Portner said he expects interest to perk up once the Costco is under construction.

Developers said they are in talks with another major retail anchor but wouldn't name it, although there has been significant behind-the-scenes speculation a Walmart is coming.

The developers are doing several types of infrastructure work on the site, Portner said, adding that the county is doing major sewer line work as well. Ernie Duarte, city director of planning and development services, said he hopes the final permits for the project can be issued in March. Portner said that despite recent criticism charging the city is anti-business, the city has been a key partner.

"Our experience has been absolutely the opposite," Portner said. "It's really helped make a very clear review process." Although the project was finally approved by the council in 2007 after years of discussions, construction work was later delayed by county flood-control work that needed to be done on-site.

The new Costco can't come soon enough for local residents, including Ayala, who said the store will bring shopping and jobs to the south-side area. "The neighbors are all supporting this as something that we need," Ayala said. "Where the other Costco is, it's a pain. This is great. It's good for this side of town's economy."

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Costco Wholesale Corp. (COST) Chairman of the Board Jeffrey H Brotman sells 50,000 Shares

Chairman of the Board of Costco Wholesale Corp. (COST) Jeffrey H Brotman sells 50,000 shares of COST on 12/28/2009 at an average price of $60.54 a share.

Costco Wholesale Corp. operates membership warehouses based on the concept that offering members very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. This rapid inventory turnover enables Costco to operate profitably at significantly lower gross margins than traditional wholesalers, discount retailers and supermarkets. Costco Wholesale Corp. has a market cap of $26.4 billion; its shares were traded at around $60.56 with a P/E ratio of 24.2 and P/S ratio of 0.4. The dividend yield of Costco Wholesale Corp. stocks is 1.2%. Costco Wholesale Corp. had an annual average earning growth of 8.3% over the past 10 years. GuruFocus rated Costco Wholesale Corp. the business predictability rank of 5-star.

COST is in the portfolios of Chris Davis of Davis Selected Advisers, Bill Gates of Bill & Melinda Gates Foundation Trust, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Bruce Kovner of Caxton Associates, Richard Aster Jr of Meridian Fund, PRIMECAP Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Warren Buffett of Berkshire Hathaway, Paul Tudor Jones of The Tudor Group, George Soros of Soros Fund Management LLC, Tom Russo of Gardner Russo & Gardner, Tom Gayner of Markel Gayner Asset Management Corp, Ron Baron of Baron Funds, Jeremy Grantham of GMO LLC.

Directors and Officers Recent Trades:

• Sell:: Executive VP Dennis R Zook sold 5,000 shares of COST stock on 12/16/2009 at the average price of 59.09, the price of the stock has increased by 2.49% since.


• Sell:: Principal Accounting Officer David S Petterson sold 3,689 shares of COST stock on 11/09/2009 at the average price of 60, the price of the stock has increased by 0.93% since.


• Sell:: Principal Accounting Officer David S Petterson sold 1,838 shares of COST stock on 10/29/2009 at the average price of 57.68, the price of the stock has increased by 4.99% since.


• Sell:: Principal Accounting Officer David S Petterson sold 7,500 shares of COST stock on 10/14/2009 at the average price of 58.64, the price of the stock has increased by 3.27% since.