Costco Wholesale Corporation (COST)
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Monthly Sales Update June 2021

Jul 8, 2021

David Sherwood
VP of Finance and Investor Relations, Costco Wholesale Corporation

Hello, and thank you for calling Costco Wholesale Corporation. I'm David Sherwood, a VP of Finance and Investor Relations, and I will review our sales results for the five-week retail month of June, which started on Monday, May 31st and ended on Sunday, July 4th. This period is compared to the five weeks that began last year on Monday, June 1st and ended on Sunday, July 5th. 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. The company does not undertake to update them except as required by law. As reported in our release, net sales for June came in at $18.92 billion, an increase of 16.9% from $16.18 billion last year. Comparable sales were as follows. On a reported basis, in the U.S., the five weeks was at 12.1%, 44 weeks, 14.9%. In Canada, the five weeks was at 23.4%, 44 weeks, 21.0%. Other international, the five weeks was at 15.4%, 44 weeks, 20.2%. Total company, five weeks, 14.1%. For the 44 weeks, 16.4%. E-commerce for the five weeks was at 20.8%. For the 44 weeks, 53.4%. Comparable sales excluding the impacts from changes in gasoline prices and foreign exchange were as follows. In the U.S., the five weeks was at 7.8%, 44 weeks, 14.4%.

In Canada, the five weeks was at 8.9%, 44 weeks, 13.5%. Other international, the five weeks was at 6.8%, 44 weeks, 14.5%. Total company, the five weeks was at 7.9%. The 44 weeks was at 14.3%. e-commerce for the five weeks, 18.0%, and for the 44 weeks, 51.5%. Our comp traffic or frequency for June was up 8.1% worldwide and up 6.9% in the U.S. This year's June retail month had one fewer shopping day versus last year due to the calendar shift of Memorial Day. This negatively impacted total and comparable sales as well as traffic by approximately 1.5%-2%. Foreign currencies year-over-year relative to the U.S. dollar impacted June comp sales as follows. Canada, positively by approximately 12%, other international, positively by approximately 7.5%, and total company, positively by approximately 2.6%. Gasoline price inflation positively impacted total reported comp sales by approximately 3.6%.

The average selling price was 41% higher year-over-year at $3.24 per gallon this year, compared to $2.30 last year. Comp gasoline volume was also up significantly relative to last year and was also positive versus 2019. Worldwide, the average transaction for June was up 5.5%, which included the positive impacts from gasoline inflation and FX. In terms of regional and merchandising categories, the general highlights were as follows. U.S. regions with the stronger sales increases were Texas, L.A., and Southeast. Other international and local currencies, we saw the strongest results in Mexico, Korea, and Taiwan. Moving to merchandise highlights, the following comparable sales results by category for the month exclude the positive impact of foreign exchange. Food and sundries were positive low single digits. Candy, sundries, and frozen foods were the strongest departments. Fresh foods were up mid-single digits. Better-performing departments included service deli and bakery.

Non-foods were positive low double digits. Better-performing departments included special events, kiosks, toys and seasonal, sporting goods, jewelry, and domestics. Ancillary business sales were up mid-40s. Gas, Food Court, and Optical were all significant drivers. Looking ahead, the July reporting period will include the four weeks beginning July 5th and ending August 1st, compared to the four weeks last year, beginning July 6th and ending August 2nd. July sales will be announced on Wednesday, August 4th at 1:15 P.M. Pacific Time. If you have any questions regarding our June sales results or any other investor relations questions, please call Bob Nelson at four twenty five three one three eight two five five, Josh Dahmen at four two five three one three eight two five four, or myself, David Sherwood at four two five three one three eight two three nine. This recording will be available until 5:00 P.M. Pacific Time, Thursday, July 15th. Thanks for calling, and have a great day.