Costco Wholesale Corporation (COST)
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Monthly Sales Update October 2020

Nov 4, 2020

Speaker 1

Hello, and thank you for calling Costco Wholesale Corporation. I'm David Sherwood, AVP of Finance and Investor Relations, and will review our sales results for the 4 week retail month of October, which started on Monday, October 5 and ended on Sunday, November 1. This period is compared to the 4 weeks that began on Monday, October 7 and ended on Sunday, November 3, 2019. This call will include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause actual events, results and or performance to differ materially from those indicated by such statements.

The risks and uncertainties include, but are not limited to, those outlined in today's call and sales release as well as other risks identified from time to time in the company's public statements and reports filed with the SEC. Forward looking statements speak only as of the date they are made, and the company does not undertake to update some efforts as required by law. As reported in our release, net sales for the 4 week month of October came in at 13,820,000,000, an increase of 15.9 percent from $11,920,000,000 last year. Comparable sales were as follows: On a reported basis, in the U. S, the 4 weeks is at 13.6%.

For 9 weeks, it's 14.1%. Canada for the 4 weeks is at 13.9%. For 9 weeks, 15.9%. Other international for the 4 weeks, 19.6 percent 9 weeks, 19.0 percent total company, the 4 weeks is a 14.4 percent, 9 weeks, 15.0 percent and e commerce for the 4 weeks is a 91.1% and for the 9 weeks, 90.6%. Comparable sales, excluding the impacts from change in gasoline prices and foreign exchange, were as follows: In the U.

S, the 4 weeks was a 16.4 percent 9 weeks, 16.6 percent in Canada, the 4 weeks was a 15.2 percent 9 weeks, 16.7 percent. Other international, the 4 weeks is a 19.0 percent, 9 weeks, 18.2%. Total company in the 4 weeks was at 16.5 percent and the 9 weeks was at 16.8%. Ecommerce for the 4 weeks was at 91.0% and for the 9 weeks, 90.5%. Outbound traffic or frequency for Ocado was up 4.2% worldwide and 6.2% in the U.

S. Worldwide, average transaction was up 9.4%, which included a net negative impact of 2 10 basis points from gasoline deflation and FX. Foreign currencies year over year relative to the U. S. Dollar impacted October comp sales as follows: Canada, negatively by approximately 30 basis points other international, positively by approximately 140 basis points and total company positively by approximately 15 basis points.

Gasoline price deflation negatively impacted total reported comp sales by approximately 2 25 basis points. The average selling price was 21% lower year over year at $2.35 per gallon this year compared to $2.96 per gallon last year. Total gallons sold also continued to be lower year over year. In terms of regional and merchandising categories, the general highlights were as follows. US regions, the strongest results were the Northeast, Southeast and Texas.

Other international and local currencies, we saw the strongest results in Japan, Korea and UK. Moving to production as highlights, the following comparable sales results by category for the month exclude the impact of foreign exchange. Food and sundries were positive low 20s. Departments had the strongest results for frozen foods, liquor and foods. Fresh foods were up mid-20s.

Performing departments included meat and produce. Hardlines were positive mid-20s. Other performing departments included garden, major appliances, which includes consumer electronics and sporting goods. Softlines were positive mid teens. Home furnishings, housewares and small appliances were strong in the month.

Ancillary business sales were down mid teens. This was primarily a result of lower gasoline, food court and photo sales. Optical was up slightly and year end dates were flat. Looking ahead, the November reporting period will include the 4 weeks beginning November 2nd and ending November 29, compared to the 4 weeks beginning November 4th and ending December 1, 2019. November sales will be announced Wednesday, December 2 at 1:15 p.

M. Pacific Time. If you have any questions regarding our October sales results or any other Investor Relations questions, please call Bob Nelson at 425-313-8255, Josh Damon at 425-313-8254 or myself, David Sherwood at 425-313-8239. This recording will be available until 5 pm Pacific Time, Wednesday, November 11. Thanks for calling.

Have a great day. Thanks for calling and have a great day.

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