Costco Wholesale Corporation (COST)
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Monthly Sales Update September 2022

Oct 5, 2022

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

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 September, which started on Monday, August 29 and ended on Sunday, October 2. This period is compared to the five weeks that began last year on Monday, August 30 and ended on Sunday, October 3. 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 September came in at $21.46 billion, an increase of 10.1% from $19.50 billion last year. Comparable sales were as follows. On a reported basis, the five weeks in the US was 11.2%, Canada 5.7%, other international negative 1.9%, total company 8.5%, e-commerce 0.7%. Comparable sales excluding the impacts from changes in gasoline prices and foreign exchange were as follows.

For the five weeks in the US was an 8.0%, Canada 9.6%, other international 11.0%, total company 8.6%, and e-commerce 2.3%. Our comp traffic or frequency for September was up 4.7% worldwide and 2.6% in the US. There was a slight negative impact to traffic from Hurricane Ian and no material impact for the month for the shift of the Chuseok Moon Festival holiday. Foreign currencies year-over-year relative to the US dollar negatively impacted total and comparable sales as follows. Canada by approximately 5.3%, other international by approximately 14.7%, and total company by approximately 2.8%. Gasoline price inflation positively impacted total reported comp sales by approximately 2.7%.

The average worldwide selling price per gallon was 21% higher versus last year. Worldwide, the average transaction was up 3.7%, 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, Northwest, and San Diego. Other international and local currencies, we saw the strongest results in Australia, Spain, UK, and Mexico. Inflation in food and sundries was consistent with August, while inflation for fresh was lower year-over-year when compared to August. Moving to merchandise highlights, the following comparable sales results by category for the month exclude the negative impact of foreign exchange. Food and sundries were positive in the low double digits. Cooler, candy, and frozen foods were the strongest departments.

Fresh foods were up mid- to high single digits. Better performing departments included bakery and produce. Non-foods increased mid-single digits. Better performing departments included toys and seasonal, tires, home furnishings, and health and beauty aids. Ancillary business sales were up low twenties. Gas and food court were the top performers. Looking ahead, the October reporting period will include the four weeks beginning October 3 and ending October 30, compared to the four weeks beginning October 4 and ending October 31, 2021. October sales will be announced Wednesday, November 2 at 1:15PM Pacific Time.

If you have any questions regarding our September 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 5:00PM Pacific Time Wednesday, October twelfth. Thanks for calling. Have a great day.

Operator

Goodbye.

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