Costco Wholesale Corporation (COST)
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Monthly Sales Update June 2022

Jul 7, 2022

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

Hello, and thank you for calling Costco Wholesale Corporation. I'm David Sherwood, AVP 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 30th and ended on Sunday, July 3rd. This period is compared to the five weeks that began last year on Monday, May 31st and ended on Sunday, July 4th. This year in the U.S. we had 34 selling days with closure for Memorial Day and versus last year, we had 33 selling days with closures for both Memorial Day and July 4th. 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 them except as required by law. As reported in our release, net sales for June came in at $22.78 billion, an increase of 20.4% from $18.92 billion last year. Comparable sales were as follows. On a reported basis, in the U.S., the five weeks was at 21.5%. 44 weeks, 16.6%. In Canada, the five weeks is at 14.2%. 44 weeks, 15.9%.

Other international, the five weeks is at 4.7%, and the 44 weeks is at 7.4%. Total company, the five weeks is at 18.1%. 44 weeks, 15.3%. E-commerce, the five weeks is at 7.0%, and the 44 weeks is at 10.6%. Comparable sales, excluding the impacts from changes in gasoline prices and foreign exchange were as follows. In the U.S., the five weeks is at 13.2%. 44 weeks, 11.0%. Canada, the five weeks is at 13.7%. 44 weeks, 12.1%. Other international, the five weeks is at 11.9%. 44 weeks, 9.8%. Total company, the five weeks is at 13.0%. 44 weeks, 11.0%.

E-commerce for the five weeks is at 8.3%. 44 weeks, 10.8%. This year's five-week June retail month had one additional shopping day in the U.S. versus last year due to the timing of Independence Day. This benefited total company total and comparable sales by approximately 2% and U.S. total and comparable sales by approximately 3%. Our comp traffic or frequency for June was up 10.2% worldwide and 9.0% in the U.S., including the impact from the holiday shift. Foreign currencies year-over-year relative to the U.S. dollar negatively impacted total and comparable sales as follows: Canada by approximately 5.3%, other international by approximately 11.0%, and total company by approximately 2.3%. Gasoline price inflation positively impacted total reported comp sales by approximately 7.4%.

The average worldwide selling price per gallon was 57% higher versus last year. Worldwide, the average transaction was up 7.2%, which included the benefit from gasoline inflation and the negative impact from FX. In terms of regional and merchandising categories, the general highlights were as follows. US regions with the strongest comparable sales were the Midwest, San Diego and Texas. Other international and local currencies, we saw the strongest results in Spain, Australia and U.K. Overall inflation in June was generally consistent with what we saw in May. Food and sundries increased sequentially, while fresh foods inflation was lower versus last month. Moving to merchandise highlights, the following comparable sales results by category for the month exclude the impact of foreign exchange. Food and sundries were positive in the mid-teens. Cooler sundries and food were the strongest departments.

Fresh foods were up high single digits. Better performing departments included bakery and deli. Non-foods increased just under 10%. Better performing departments included garden, toys and seasonal, tires and automotive. Ancillary business sales were up high fifties. Gas and Food Court were the top performers. Looking ahead, the July sales reporting period began July 4 and ends July 31, compared to the four weeks that began last July 5 and ended August 1st, 2021. This year, July will have one fewer selling day, 27 versus 28 last year due to the shift in the timing of the Fourth of July. July sales will be announced Wednesday, August 3 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 425-313-8255, Josh Dahmen at 425-313-8254, or myself, David Sherwood, at 425-313-8239. This recording will be available until 5 P.M. Pacific Time, Thursday, July 14th. Thanks for calling Costco, and have a great day.

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