1. Costco Wholesale Corporation (Costco)

2. Company Overview Industry: Discount Retailers Target Market: Small business owners & 100k earners 417 Warehouse Style Stores 6 countries 37 States 2 Territories

3. Stock Overview Current Price$45.25 52 Week High50.46 Low39.48 Per Share Earnings2.16 Revenue$111.691 Cash$8.454 Price/Book2.46 P/E20.94 Price/Sales0.42 Beta0.84 1.5 year market corr.0.627 (0.32 over life) Volume4,754,764 Relative risk3.83 Avg. Vol.3,084,340

4. Stock Performance Growth of $10,000 YTD through 10-12- 05 Stock: Costco Wholesale Industry: Discount Stores Index: S&P 500 Returns %20002001200220032004YTD Stock-12.511.1-36.832.531.2-5.8 +/- Industry1.4-1.7-22.021.916.42.6 +/- S&P 500-3.423.0-14.73.820.3-4.3

5. Competition WMT = Wal-Mart Stores Inc. TGT = Target BJ = BJ’s Wholesale Club Industry = Discount Stores COSTWMTBJTGT Industry Market Cap:21.87B185.57B1.78B46.2B291B Qtrly Rev Growth (yoy):10.10%10.20%9.8%13.6%10.0 Revenue (ttm):51.37B298.46B7.68B49.57BNA Gross Margin (ttm):1.96%23.06%1.55%4.82%3.4% EBITDA (ttm):1.97B22.39B104.22M5.28BNA Oper Margins (ttm):2.89%5.94%2.52%7.92%NA Net Income (ttm):1.01B10.72B121.41M10.72BNA Price/Book Value2.473.851.913.453.4 EPS (ttm):2.072.5361.712.5362.66 P/E (ttm):22.0717.0015.219.6218.4 PEG (5 yr expected):1.611.031.051.031.15 P/S (ttm):0.430.600.230.600.94

6. Recommendations Buy  Pros Highest sales/profit per square foot in the industry -Lowest labor costs in the industry -Steady/consistent growth -Better than market returns  Cons Heavy economic link – luxury goods -Big name competition - Wal-Mart -Long-term growth limitations possible