Costco Wholesale Corporation (COST)
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Monthly Sales Update October 2022

Nov 2, 2022

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

Hello, and thank you for calling Costco Wholesale Corporation. I'm David Sherwood, VP of Finance and Investor Relations, and I will review our sales results for the four-week retail month of October, which started on Monday, 3 October 2022, and ended on Sunday, 30 October 2022. This period is compared to the four weeks that began last year on Monday, 4 October 2021, and ended on Sunday, 31 October 2021. 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 October came in at $17.73 billion, an increase of 7.7% from $16.47 billion last year. Comparable sales were as follows. On a reported basis, in the US, the four weeks is at 9.2%. For the nine weeks, 10.3%. Canada, the four weeks is at 0.5%, nine weeks, 3.3%. Other international, the four weeks is at -5.4%, and the nine weeks is at -3.5%. Total company, the four weeks is at 6.0%, and nine weeks, 7.4%.

E-commerce, -0.7%, and the nine weeks, 0.3%. Comparable sales, excluding the impacts from changes in gasoline prices and foreign exchange, were as follows. In the US, the four weeks is at 6.1%, the nine weeks, 7.1%. Canada, the four weeks is at 8.8%, and the nine weeks, 9.2%. Other international, the four weeks is at 7.9%, nine weeks, 9.5%. Total company, the four weeks is at 6.7%, and nine weeks, 7.7%. E-commerce, the four weeks is at 1.6%, and the nine weeks, 2.2%. Our comp traffic or frequency for October was up 3.5% worldwide and 1.7% in the US.

Foreign currencies year over year relative to the US dollar negatively impacted total and comparable sales as follows. Canada by approximately 10%, other international by approximately 15%, and total company by approximately 3.5%. Gasoline price inflation positively impacted total reported comp sales by approximately 2.8%. The average worldwide selling price per gallon was 22% higher versus last year. Worldwide, the average transaction was up 2.5%, 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, Bay Area, and Northwest. Other international and local currencies, we saw the strongest results in Spain, Mexico, UK, and Australia.

Inflation in food and sundries was consistent with September, while inflation for fresh was lower year-over-year when compared to September. Moving into 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 sundries were the strongest departments. Fresh foods were up mid-single digits. Better-performing departments included bakery and produce.

Non-foods increased low single digits. Better-performing departments included automotive, tires, housewares, and health and beauty aids. Ancillary business sales were up low twenties. Gasoline and Food Court were the top performers. Looking ahead, the November reporting period will include the four weeks beginning 31 October 2022 and ending 27 November 2022, compared to the four weeks which began 1 November 2021 and ended 28 November 2021.

November sales will be announced Wednesday, 30 November 2022, at 1:15 PM 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 Dahmen at 425-313-8254, or myself, David Sherwood, at 425-313-8239. This recording will be available until 5:00 PM Pacific Time Wednesday, 9 November 2022. Thanks for calling Costco and have a great day.

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