Costco Wholesale (COST) 10-K risk factor changes: FY2024 vs FY2023

These Risk Factors should be carefully reviewed in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in [Item [removed: 7](#i4bf6d0bde838478985b72eb4052bc976_46)] [added: 7](#ied98cc882e5d481daeb0d876006a17ac_46)] and our consolidated financial statements and related notes in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report.

Our financial and operational performance is highly dependent on our U.S. and Canadian operations, which comprised [removed: 87%] [added: 86%] and [removed: 84%] [added: 85%] of net sales and operating income in [removed: 2023.][added: 2024.]

Within the U.S., we are highly dependent on our California operations, which comprised 27% of U.S. net sales in [removed: 2023.][added: 2024.]

We cannot ensure that new warehouses and new e-commerce [removed: websites] [added: sites] will be profitable and future profitability could be delayed or otherwise materially adversely affected.

Although we believe that our operations are efficient, disruptions due to [removed: fires, tornadoes, hurricanes, earthquakes,] [added: extreme weather,] pandemics or other [removed: extreme weather conditions or] catastrophic events, labor [removed: issues] [added: issues, work stoppage,] or other shipping problems may result in delays in the production and delivery of merchandise to [added: and the operation of] our warehouses, which could adversely affect sales and the satisfaction of our members.

Our e-commerce operations depend heavily on [removed: third-party and in-house] logistics [removed: providers] [added: providers, both internal] and [removed: is] [added: external, and are] negatively affected when [removed: these providers] [added: services] are unable to [removed: provide services] [added: be provided] in a timely fashion.

We may not timely identify or effectively respond to consumer [removed: trends,] [added: tastes and preferences,] which could negatively affect our relationship with our members, the demand for our products and services, and our market share.

Failure to identify timely or effectively respond to changing consumer tastes, preferences [removed: (including those relating to environmental, social] and [removed: governance practices) and] spending patterns [added: including those related to resource efficiency, environmental protection, human rights, and the transition to a low-carbon economy] could negatively affect our relationship with our members, the demand for our products and services, and our market share.

Availability and performance of our [removed: information technology (IT)] [added: IT] systems are vital to our business.

Given the high volume of transactions we process, it is important that we build strong digital resiliency to prevent disruption from events such as power outages, computer and telecommunications failures, viruses, internal or external security [removed: breaches,] [added: breaches and other cybersecurity incidents,] errors by employees, [added: extreme weather,] and catastrophic [removed: events such as fires, earthquakes, tornadoes and hurricanes.][added: events.]

[added: Any debilitating failure of our critical IT systems,] data centers and backup systems would require significant investments in resources to restore IT services and may cause serious impairment in our business operations including loss of business services, increased cost of moving merchandise and failure to provide service to our members.

We are currently making substantial investments in [added: technology and IT transformation projects, including] maintaining and enhancing our digital [removed: resiliency] [added: resiliency,] and failure or delay in these projects could be costly and harmful to our business.

We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with [added: increasing] privacy and data protection regulations globally.

[removed: Increased remote] [added: Remote] work has also [removed: increased] [added: expanded] the possible attack surfaces.

Further, the insurance coverage we maintain and indemnification arrangements with third parties may be inadequate to cover claims, costs, and liabilities relating to [removed: cybersecurity incidents.]

In addition, data we collect, store and process is subject to a variety of U.S. and international laws and [removed: regulations, such] [added: regulations (such] as the European [removed: Union's] [added: Union] General Data Protection Regulation, California Consumer Privacy Act, Health Insurance Portability and Accountability Act, and [added: China's Personal Information Protection Act), evolving rules concerning artificial intelligence, and] other privacy and cybersecurity laws [removed: across the various states] and [removed: around the globe,] [added: restrictions on use of member information that may also impair our ability to utilize data, consistent with member consents and preferences,] which may carry significant potential penalties for noncompliance.

[added: As we offer] new payment options to our members, we may be subject to additional rules, regulations, compliance requirements, and higher fraud losses.

[removed: We are making] investments in our websites and mobile applications.

[added: Our ability to control labor and benefit costs is subject to] numerous internal and external factors, including regulatory changes, prevailing wage rates, union relations and healthcare and other insurance costs.

Some competitors have greater financial resources and technology capabilities, [added: including the faster adoption of artificial intelligence,] better access to merchandise, and greater market penetration than we do.

General economic conditions can also be affected by events like the outbreak of [removed: hostilities, including but not limited to the Ukraine conflict,] [added: hostilities] or acts of terrorism.

Our suppliers (and those they depend upon for materials and services) are subject to risks, including labor disputes, union organizing activities, [added: human and animal rights violations,] financial liquidity, [added: climate change,] natural disasters, extreme weather conditions, [added: environmental degradation,] public health emergencies, supply constraints and general economic and political conditions and other risks similar to those we face that could limit their ability to timely provide us with acceptable merchandise.

One or more of our suppliers might not adhere to our quality control, packaging, legal, regulatory, labor, [added: human rights,] environmental or animal welfare standards.

[removed: This] failure could lead to recalls and litigation and otherwise damage our reputation and our brands, increase costs, and otherwise adversely impact our business.

During [removed: 2023,] [added: 2024,] our international operations, including Canada, generated [removed: 27%] [added: 28%] and [removed: 34%] [added: 33%] of our net sales and operating income.

Natural disasters and extreme weather conditions, including those impacted by climate change, such as [added: extreme temperatures,] hurricanes, typhoons, floods, earthquakes, wildfires, droughts; acts of terrorism or violence, including active shooter situations; and energy shortages; particularly in California or Washington state, where our centralized operating systems and administrative personnel are located, could negatively affect our operations and financial performance.

Such events could result in physical damage to our properties, [added: additional heating, cooling, and refrigeration costs,] limitations on store operating hours, less frequent visits by members to physical locations, the temporary closure of warehouses, depots, manufacturing or home office facilities, the temporary lack of an adequate work force, disruptions to our IT systems, the temporary or long-term disruption in the supply of products from some local or overseas suppliers, the temporary disruption in the transport of goods to or from overseas, [added: damage to buildings or inventory,] delays in the delivery of goods to our warehouses or depots, [removed: and] the temporary reduction in the availability of products in our [removed: warehouses.][added: warehouses, and long-term disruption or threats to the habitability of key markets in which we operate.]

Pandemics and other health [removed: crises, including COVID-19,] [added: crises] could affect our business, financial condition and results of operations in many respects.

A [removed: pandemic, such as COVID-19,] [added: pandemic] could affect certain business operations, demand for our products and services, in-stock positions, costs of doing business, availability of labor, access to inventory, supply chain operations, our ability to predict future performance, exposure to litigation, and our financial performance, among other things.

[removed: We use natural] [added: Natural] gas, diesel fuel, gasoline, and electricity [added: are used] in our [added: operations,] distribution [added: channels,] and [removed: warehouse operations.][added: value chain.]

Government regulations limiting carbon dioxide and other greenhouse gas emissions and other environmental restrictions may increase [removed: compliance] [added: compliance, operations,] and merchandise costs, and other [removed: regulation] [added: regulations] affecting energy inputs could materially affect our profitability.

[removed: As the economy transitions to lower carbon intensity we cannot guarantee that we will] [added: We may not] make adequate [added: and timely] investments or successfully implement strategies that will effectively achieve our [removed: climate-related] [added: sustainability-related] goals, which could lead to [removed: negative perceptions among] [added: reputational harm with] members and other [removed: stakeholders and result in reputational harm.][added: stakeholders.]

We [removed: also] sell a substantial amount of gasoline, the demand for which could be impacted by concerns [added: and regulation] about climate [removed: change and increased regulations.][added: change.]

More stringent fuel economy standards, changing public policies aimed at increasing the adoption of zero-emission and alternative fuel [removed: vehicles] [added: vehicles,] and other regulations related to climate [removed: change, and evolving consumer preferences will] [added: change may] affect our future [removed: operations and will] [added: operations,] adversely impact certain elements of our [removed: profitability] [added: profitability,] and require significant capital expenditures.

At the end of [removed: 2023,] [added: 2024,] we operated [removed: 270] [added: 276] warehouses outside of the U.S. (31% of all warehouse locations), and we plan to continue expanding our international operations.

Changes in or failure to comply with [added: environmental, social, or governance (ESG)] regulations [removed: relating to the use, storage, discharge and disposal of hazardous materials, hazardous and non-hazardous wastes and other environmental matters (such as recycling and extended producer responsibility requirements)] could adversely impact our business, financial condition and results of operations.

Failure to comply with these laws could result in harm to our members, [removed: employees] [added: employees, workers in the value chain] or others, significant costs to satisfy environmental compliance, remediation or compensatory requirements, or the imposition of severe penalties or restrictions on operations by governmental agencies or courts that could adversely affect our business, financial condition and results of operations.

cybersecurity incidents.

We are making

This

We are subject to a wide and increasingly broad array of laws and regulations globally relating to ESG matters, including disclosure and compliance requirements.

These laws and regulations, along with expanding voluntary reporting, are expanding the scope and complexity of matters that we are required to regulate, assess, and disclose and potentially limit our sourcing flexibility.

Failure or perceived failure to meet our ESG goals or expectations set by growing public interest and government regulation of ESG topics could result in reputational harm or adversely affect our business

Costco has set public targets and disclosed intentions for future action regarding sustainability.

There are dependencies outside of our control impacting our ability to meet our goals, including but not limited to: economic conditions, ability to access technology at an appropriate cost or scale, the ability to procure sufficient clean energy at competitive market rates to meet future operational and supplier needs, unforeseen operational and implementation challenges, termination or contraction of policies or systems which support our capital investments, and collaboration with third parties.

We are undertaking large technology and IT transformation projects.

The failure of these projects could adversely impact our business plans and potentially impair our day to day business operations.

Any debilitating failure of our critical IT systems,

As we offer

Our ability to control labor and benefit costs is subject to

Factors associated with climate change could adversely affect our business.

Climate change, extreme weather conditions, wildfires, droughts and rising sea levels could affect our ability to procure commodities at costs and in quantities we currently experience.

We are subject to a wide and increasingly broad array of federal, state, regional, local and international laws and regulations relating to the use, storage, discharge and disposal of hazardous materials, hazardous and non-hazardous wastes and other environmental matters.

Our exposure to market risk for changes in interest rates relates primarily to our investment holdings that are diversified among various instruments considered to be cash equivalents, as defined in [Note [removed: 1](#i4bf6d0bde838478985b72eb4052bc976_106)] [added: 1](#ied98cc882e5d481daeb0d876006a17ac_106)] to the consolidated financial statements included in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report, as well as short-term investments in government and agency securities with effective maturities of generally three months to five years at the date of purchase.

A 100 basis point change in interest rates as of the end of [removed: 2023] [added: 2024] would have had an immaterial incremental change in fair market value.

For those investments that are classified as available-for-sale, the unrealized gains or losses related to fluctuations in market volatility and interest rates are reflected [removed: within stockholders’ equity in accumulated other comprehensive income in the consolidated balance sheets.]

As of the end of [removed: 2023,] [added: 2024,] long-term debt with fixed interest rates was [removed: $6,484.][added: $5,919.]

See [Note [removed: 4](#i4bf6d0bde838478985b72eb4052bc976_118)] [added: 4](#ied98cc882e5d481daeb0d876006a17ac_118)] to the consolidated financial statements included in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report for more information on our long-term debt.

The contracts are intended primarily to economically hedge exposure to U.S. dollar merchandise inventory expenditures made by our [added: international subsidiaries.]

For additional information related to the Company's forward foreign-exchange contracts, see [Notes [removed: 1](#i4bf6d0bde838478985b72eb4052bc976_106)] [added: 1](#ied98cc882e5d481daeb0d876006a17ac_106)] and [removed: [3](#i4bf6d0bde838478985b72eb4052bc976_115)] [added: [3](#ied98cc882e5d481daeb0d876006a17ac_115)] to the consolidated financial statements included in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report.

A hypothetical 10% strengthening of the functional [removed: currency] [added: currencies] compared to the non-functional currency exchange rates at September [removed: 3, 2023,] [added: 1, 2024,] would have decreased the fair value of the contracts by [removed: $109] [added: approximately $120] and resulted in an unrealized loss in the consolidated statements of income for the same amount.

within stockholders’ equity in accumulated other comprehensive income in the consolidated balance sheets.

international subsidiaries.

Costco operated [added: 890,] 861, [removed: 838,] and [removed: 815] [added: 838] warehouses worldwide at September [added: 1, 2024, September] 3, 2023, [removed: August 28, 2022,] and August [removed: 29, 2021.][added: 28, 2022.]

The Company operates e-commerce [removed: websites] [added: sites] in the U.S., Canada, Mexico, the U.K., Korea, Taiwan, Japan, and Australia.

References to [removed: 2022] [added: 2024] and [removed: 2021] [added: 2022] relate to the 52-week fiscal years ended [removed: August 28, 2022,] [added: September 1, 2024,] and August [removed: 29, 2021.][added: 28, 2022.]

We operate membership warehouses and e-commerce [removed: websites] [added: sites] based on the concept that offering our members low prices on a limited selection of nationally-branded and private-label products in a wide range of categories will produce high sales volumes and rapid inventory turnover.

[added: Our e-commerce operations ship] merchandise through our depots and logistics operations, as well as through drop-ship and other delivery arrangements with our suppliers.

Because the hours of operation are shorter than many other retailers, and due to other efficiencies inherent in a warehouse-type operation, [added: we believe] labor costs are lower relative to the volume of sales.

We average anywhere from 9,000 to [removed: 11,000] [added: 10,000] SKUs online, some of which are [removed: also] available in our warehouses.

[removed: In keeping with our policy of] [added: To promote] member satisfaction, we generally accept returns of merchandise.

[removed: Core] [added: ■Core] Merchandise Categories (or core business):

- Non-Foods (including major appliances, [added: small] electronics, health and beauty aids, hardware, [removed: garden] [added: lawn] and [removed: patio,] [added: garden,] sporting goods, tires, toys and seasonal, office supplies, [removed: automotive care, postage,] [added: automotive, stamps,] tickets, apparel, [removed: small appliances,] furniture, domestics, housewares, special order kiosk, and jewelry)

[removed: Warehouse] [added: ■Warehouse] Ancillary (includes gasoline, pharmacy, optical, food court, hearing aids, and tire installation) [removed: and Other Businesses (includes e-commerce1, business centers1, travel, and other)]

Warehouse ancillary [removed: businesses] operate primarily within or next to our warehouses, encouraging members to shop more frequently.

The number of warehouses with gas stations varies significantly by country, and we have no gasoline business in [removed: Korea, China,] [added: Korea] or Sweden.

We operated [removed: 692] [added: 719] gas stations at the end of [removed: 2023.][added: 2024.]

Our gasoline business represented approximately [removed: 13%] [added: 12%] of total net sales in [removed: 2023.][added: 2024.]

Our other businesses sell products and services that complement our warehouse [removed: operations (core and warehouse ancillary businesses).][added: operations.]

Net sales for e-commerce represented approximately [removed: 6%] [added: 7%] of total net sales in [removed: 2023.][added: 2024.]

[added: Our business centers carry items] tailored specifically for food services, convenience stores and offices, and offer walk-in shopping and deliveries.

Costco Travel offers vacation packages, car rentals, [removed: cruises, hotels,] [added: cruises] and other travel products exclusively for Costco members (offered in the U.S., Canada, and the U.K.).

We have direct [removed: buying] relationships with many producers of brand-name merchandise.

Certain financial information for our segments and geographic areas is included in [Note [removed: 11](#i4bf6d0bde838478985b72eb4052bc976_139)] [added: 11](#ied98cc882e5d481daeb0d876006a17ac_139)] to the consolidated financial statements included in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report.

Our members may utilize their memberships at all of our warehouses and [removed: websites.][added: e-commerce sites.]

[removed: Our] [added: During fiscal 2024, our] annual fee for these memberships [removed: is] [added: was] $60 in the U.S. and varies in other countries.

Our member renewal rate was [removed: 92.7%] [added: 92.9%] in the U.S. and Canada and [removed: 90.4%] [added: 90.5%] worldwide at the end of [removed: 2023.][added: 2024.]

| | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Gold Star | | | [removed: 58,800] [added: 63,700] | | | | | | [removed: 54,000] [added: 58,800] | | | | | | [removed: 50,200] [added: 54,000] | | |

| Business, including affiliates | | | [removed: 12,200] [added: 12,500] | | | | | | [removed: 11,800] [added: 12,200] | | | | | | [removed: 11,500] [added: 11,800] | | |

| Total paid [removed: members] [added: members1] | | | [removed: 71,000] [added: 76,200] | | | | | | [removed: 65,800] [added: 71,000] | | | | | | [removed: 61,700] [added: 65,800] | | |

| Household cards | | | [removed: 56,900] [added: 60,600] | | | | | | [removed: 53,100] [added: 56,900] | | | | | | [removed: 49,900] [added: 53,100] | | |

| Total cardholders | | | [removed: 127,900] [added: 136,800] | | | | | | [removed: 118,900] [added: 127,900] | | | | | | [removed: 111,600] [added: 118,900] | | |

Paid [removed: cardholders] [added: members] (except affiliates) [removed: are] [added: were] eligible to upgrade to an Executive membership in the U.S., for an additional annual fee of $60.

The sales penetration of Executive members represented approximately [removed: 72.8%] [added: 73.3%] of worldwide net sales in [removed: 2023.][added: 2024.]

[removed: Our Code of Ethics requires that we] “Take Care of Our Employees,” [removed: which] is [added: a key component of our code of ethics and is] fundamental to [removed: the obligation] [added: our commitment] to “Take Care of Our Members.” We must also carefully control our selling, general and administrative (SG&A) expenses, so that we can sell high quality goods and services at low prices.

At the end of [removed: 2023,] [added: 2024,] we employed [removed: 316,000] [added: 333,000] employees worldwide.

Approximately 95% are employed in our membership warehouses and distribution [removed: channels, and approximately 5% are represented by unions.][added: channels.]

| United States | | | [removed: 208,000] [added: 219,000] | | | | | | [removed: 202,000] [added: 208,000] | | | | | | [removed: 192,000] [added: 202,000] | | |

| Canada | | | [removed: 51,000] [added: 53,000] | | | | | | [removed: 50,000] [added: 51,000] | | | | | | [removed: 47,000] [added: 50,000] | | |

| Other International | | | [removed: 57,000] [added: 61,000] | | | | | | [removed: 52,000] [added: 57,000] | | | | | | [removed: 49,000] [added: 52,000] | | |

| Total employees | | | [removed: 316,000] [added: 333,000] | | | | | | [removed: 304,000] [added: 316,000] | | | | | | [removed: 288,000] [added: 304,000] | | |

The more significant include: competitive compensation and [removed: benefits for those working in our membership warehouses and distributions channels;] [added: benefits;] a commitment to [added: employee development and] promoting from within; and a target ratio of at least 50% of our employee base being full-time employees.

■Other Businesses (includes e-commerce, business centers, travel, and other)

Digitally originated sales, which represents sales that a member initiates through a digitally enabled device, including e-commerce, business delivery, travel, and same-day grocery, represented approximately 9% of total net sales in 2024.

To ensure sufficient product supply for future growth, we pursue diversification in our supply-chain management and seek to expand in-country production.

_______________

(1)Executive members represented 35,400, 32,300, and 29,100 of total paid members in 2024, 2023, and 2022.

Effective September 1, 2024, we increased our membership fees in the U.S. and Canada for Gold Star, Business, and Business affiliates to $65 per year.

The Executive membership fee increased from $120 to $130 (membership fee of $65, plus Executive upgrade of $65), and the maximum annual 2% reward associated with the Executive Membership increased from $1,000 to $1,250.

Approximately 5% are represented by unions.

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

In July 2024, we increased the starting wage to at least $19.50 for all entry-level positions in the U.S. and Canada.

We also increased the top of wage scales by $1 per hour, and increased all other steps of the wage scales by $0.50 per hour, bringing our average hourly rate at the end of 2024 for hourly employees in the U.S. to approximately $31 per hour.

We continue to offer expansive benefits in the U.S. that provide physical, emotional and financial well-being support for employees and their dependents at little cost to our employees.

Most officers have over 25 years of service with the Company.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gary Millerchip | | | Executive Vice President and Chief Financial Officer. Mr. Millerchip previously served as Senior Vice President and Chief Financial Officer of The Kroger Co. from April 2019 to February 2024 and, prior to that, as Chief Executive Officer of Kroger Personal Finance since July 2010. | | | 2024 | | | 53 | | |

| Teresa Jones | | | Executive Vice President, Global Depots and Traffic. Ms. Jones was Senior Vice President, Depot Operations from August 2022 to July 2024, and Vice President, Depot Operations, from 2018 to 2022. | | | 2024 | | | 55 | | |

| Javier Polit | | | Executive Vice President, Chief Information and Digital Officer. Mr. Polit previously served as Chief Information Officer for Mondelez International (formerly Kraft Foods) from 2022 to 2024. From 2017 to 2022, he was Chief Information Officer for Procter & Gamble Company. Prior to that role, he served as Group Chief Information Officer for The Coca-Cola Company from 2007 to 2017. | | | 2023 | | | 60 | | |

Our e-commerce operations ship

This figure does not include other services we offer online in certain countries such as business delivery, travel, same-day grocery, and various other services.

Our business centers carry items

1 E-commerce and business centers are allocated to the appropriate merchandise categories in the Net Sales portion of Item 7.

This program offers services that vary by state and country and provide access to additional savings and benefits on various business and consumer services, such as auto and home insurance, the Costco auto purchase program, and check printing.

Executive members totaled 32.3 million and represented 45.4% of paid members.

In March 2023, we increased the top of the wage scales by 85 cents per hour in the U.S, Canada and Puerto Rico.

In September of 2023, we increased the starting wage to at least $18.50 for all entry-level positions in the U.S. We have also expanded our benefits in the U.S. to include additional mental health support for children and adults at little to no cost to our employees.

retailers, gasoline stations, hard discounters, department and specialty stores, and operators selling a single category or narrow range of merchandise.

All have over 25 years of service with the Company, with the exception of Mr. Sullivan who has 22 years of service.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Ron M. Vachris | | | | | | President and Chief Operating Officer. Mr. Vachris has been a director since February 2022. Mr. Vachris previously served as Executive Vice President of Merchandising from June 2016 to January 2022, as Senior Vice President, Real Estate Development, from August 2015 to June 2016, and Senior Vice President, General Manager, Northwest Region, from 2010 to July 2015. | | | | | | 2016 | | | | | | 58 | | |

See discussion of Legal Proceedings in [Note [removed: 10](#i4bf6d0bde838478985b72eb4052bc976_136)] [added: 10](#ied98cc882e5d481daeb0d876006a17ac_136)] to the consolidated financial statements included in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report.

For the fiscal year ended September [removed: 3, 2023][added: 1, 2024]

The aggregate market value of the voting stock held by non-affiliates of the registrant as of February [removed: 12, 2023] [added: 18, 2024] was [removed: $221,351,787,419.][added: $320,635,374,592.]

The number of shares outstanding of the registrant’s common stock as of October [removed: 3, 2023,] [added: 1, 2024,] was [removed: 442,740,572.][added: 443,073,537.]

Portions of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held on January [removed: 18, 2024,] [added: 23, 2025,] are incorporated by reference into [removed: [Part III](#i4bf6d0bde838478985b72eb4052bc976_154)] [added: Part III] of this Form 10-K.

ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER [removed: 3, 2023][added: 1, 2024]

| Item 1. | | | [removed: [Business](#i4bf6d0bde838478985b72eb4052bc976_16)] [added: [Business](#ied98cc882e5d481daeb0d876006a17ac_16)] | | | [removed: [3](#i4bf6d0bde838478985b72eb4052bc976_16)] [added: [3](#ied98cc882e5d481daeb0d876006a17ac_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i4bf6d0bde838478985b72eb4052bc976_19)] [added: Factors](#ied98cc882e5d481daeb0d876006a17ac_19)] | | | [removed: [8](#i4bf6d0bde838478985b72eb4052bc976_19)] [added: [9](#ied98cc882e5d481daeb0d876006a17ac_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i4bf6d0bde838478985b72eb4052bc976_22)] [added: Comments](#ied98cc882e5d481daeb0d876006a17ac_22)] | | | [removed: [17](#i4bf6d0bde838478985b72eb4052bc976_22)] [added: [18](#ied98cc882e5d481daeb0d876006a17ac_22)] | | |

| Item 2. | | | [removed: [Properties](#i4bf6d0bde838478985b72eb4052bc976_25)] [added: [Properties](#ied98cc882e5d481daeb0d876006a17ac_25)] | | | [removed: [17](#i4bf6d0bde838478985b72eb4052bc976_25)] [added: [19](#ied98cc882e5d481daeb0d876006a17ac_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i4bf6d0bde838478985b72eb4052bc976_28)] [added: Proceedings](#ied98cc882e5d481daeb0d876006a17ac_28)] | | | [removed: [18](#i4bf6d0bde838478985b72eb4052bc976_28)] [added: [20](#ied98cc882e5d481daeb0d876006a17ac_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i4bf6d0bde838478985b72eb4052bc976_31)] [added: Disclosures](#ied98cc882e5d481daeb0d876006a17ac_31)] | | | [removed: [18](#i4bf6d0bde838478985b72eb4052bc976_31)] [added: [20](#ied98cc882e5d481daeb0d876006a17ac_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i4bf6d0bde838478985b72eb4052bc976_37)] [added: Securities](#ied98cc882e5d481daeb0d876006a17ac_37)] | | | [removed: [18](#i4bf6d0bde838478985b72eb4052bc976_37)] [added: [20](#ied98cc882e5d481daeb0d876006a17ac_37)] | | |

| Item 6. | | | [removed: [Reserved](#i4bf6d0bde838478985b72eb4052bc976_43)] [added: [Reserved](#ied98cc882e5d481daeb0d876006a17ac_43)] | | | [removed: [19](#i4bf6d0bde838478985b72eb4052bc976_43)] [added: [21](#ied98cc882e5d481daeb0d876006a17ac_43)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i4bf6d0bde838478985b72eb4052bc976_46)] [added: Operations](#ied98cc882e5d481daeb0d876006a17ac_46)] | | | [removed: [20](#i4bf6d0bde838478985b72eb4052bc976_46)] [added: [22](#ied98cc882e5d481daeb0d876006a17ac_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i4bf6d0bde838478985b72eb4052bc976_73)] [added: Risk](#ied98cc882e5d481daeb0d876006a17ac_73)] | | | [removed: [28](#i4bf6d0bde838478985b72eb4052bc976_73)] [added: [30](#ied98cc882e5d481daeb0d876006a17ac_73)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: Data](#ied98cc882e5d481daeb0d876006a17ac_76)] | | | [removed: [30](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: [32](#ied98cc882e5d481daeb0d876006a17ac_76)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i4bf6d0bde838478985b72eb4052bc976_142)] [added: Disclosure](#ied98cc882e5d481daeb0d876006a17ac_142)] | | | [removed: [60](#i4bf6d0bde838478985b72eb4052bc976_142)] [added: [63](#ied98cc882e5d481daeb0d876006a17ac_142)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i4bf6d0bde838478985b72eb4052bc976_145)] [added: Procedures](#ied98cc882e5d481daeb0d876006a17ac_145)] | | | [removed: [60](#i4bf6d0bde838478985b72eb4052bc976_145)] [added: [63](#ied98cc882e5d481daeb0d876006a17ac_145)] | | |

| Item 9B. | | | [Other [removed: Information](#i4bf6d0bde838478985b72eb4052bc976_148)] [added: Information](#ied98cc882e5d481daeb0d876006a17ac_148)] | | | [removed: [61](#i4bf6d0bde838478985b72eb4052bc976_148)] [added: [64](#ied98cc882e5d481daeb0d876006a17ac_148)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i4bf6d0bde838478985b72eb4052bc976_151)] [added: Inspections](#ied98cc882e5d481daeb0d876006a17ac_151)] | | | [removed: [61](#i4bf6d0bde838478985b72eb4052bc976_151)] [added: [64](#ied98cc882e5d481daeb0d876006a17ac_151)] | | |

| [PART [removed: III](#i4bf6d0bde838478985b72eb4052bc976_154)] [added: III](#ied98cc882e5d481daeb0d876006a17ac_154)] | | | | | | | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i4bf6d0bde838478985b72eb4052bc976_157)] [added: Governance](#ied98cc882e5d481daeb0d876006a17ac_157)] | | | [removed: [61](#i4bf6d0bde838478985b72eb4052bc976_157)] [added: [64](#ied98cc882e5d481daeb0d876006a17ac_157)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i4bf6d0bde838478985b72eb4052bc976_160)] [added: Compensation](#ied98cc882e5d481daeb0d876006a17ac_160)] | | | [removed: [61](#i4bf6d0bde838478985b72eb4052bc976_160)] [added: [64](#ied98cc882e5d481daeb0d876006a17ac_160)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i4bf6d0bde838478985b72eb4052bc976_163)] [added: Matters](#ied98cc882e5d481daeb0d876006a17ac_163)] | | | [removed: [61](#i4bf6d0bde838478985b72eb4052bc976_163)] [added: [64](#ied98cc882e5d481daeb0d876006a17ac_163)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i4bf6d0bde838478985b72eb4052bc976_166)] [added: Independence](#ied98cc882e5d481daeb0d876006a17ac_166)] | | | [removed: [61](#i4bf6d0bde838478985b72eb4052bc976_166)] [added: [64](#ied98cc882e5d481daeb0d876006a17ac_166)] | | |

| Item 14. | | | [Principal Accounting Fees and [removed: Services](#i4bf6d0bde838478985b72eb4052bc976_169)] [added: Services](#ied98cc882e5d481daeb0d876006a17ac_169)] | | | [removed: [61](#i4bf6d0bde838478985b72eb4052bc976_169)] [added: [64](#ied98cc882e5d481daeb0d876006a17ac_169)] | | |

| [PART [removed: IV](#i4bf6d0bde838478985b72eb4052bc976_172)] [added: IV](#ied98cc882e5d481daeb0d876006a17ac_172)] | | | | | | | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#i4bf6d0bde838478985b72eb4052bc976_175)] [added: Schedules](#ied98cc882e5d481daeb0d876006a17ac_175)] | | | [removed: [62](#i4bf6d0bde838478985b72eb4052bc976_175)] [added: [65](#ied98cc882e5d481daeb0d876006a17ac_175)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i4bf6d0bde838478985b72eb4052bc976_178)] [added: Summary](#ied98cc882e5d481daeb0d876006a17ac_178)] | | | [removed: [65](#i4bf6d0bde838478985b72eb4052bc976_178)] [added: [68](#ied98cc882e5d481daeb0d876006a17ac_178)] | | |

| | | | [removed: [Signatures](#i4bf6d0bde838478985b72eb4052bc976_181)] [added: [Signatures](#ied98cc882e5d481daeb0d876006a17ac_181)] | | | [removed: [66](#i4bf6d0bde838478985b72eb4052bc976_181)] [added: [69](#ied98cc882e5d481daeb0d876006a17ac_181)] | | |

For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future and may relate to such matters as net sales growth, changes in comparable sales, cannibalization of existing locations by new openings, price or fee changes, earnings performance, earnings per share, stock-based compensation expense, warehouse openings and closures, capital spending, the effect of adopting certain accounting standards, future financial reporting, financing, margins, return on invested capital, [added: investments in technology,] strategic direction, expense controls, membership renewal rates, shopping frequency, litigation, [added: attainment of sustainability goals,] and the demand for our products and services.

Such forward-looking statements involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements, including, without limitation, the factors set forth in the section titled “[Item 1A-Risk [removed: Factors](#i4bf6d0bde838478985b72eb4052bc976_19)”,] [added: Factors](#ied98cc882e5d481daeb0d876006a17ac_19)”,] and other factors noted in the section titled “[Item 7-Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i4bf6d0bde838478985b72eb4052bc976_46)”] [added: Operations](#ied98cc882e5d481daeb0d876006a17ac_46)”] and in the consolidated financial statements and related notes in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report.

| [PART I](#ied98cc882e5d481daeb0d876006a17ac_13) | | | | | | | | |

| Item 1C. | | | [Cybersecurity](#ied98cc882e5d481daeb0d876006a17ac_549755815428) | | | [18](#ied98cc882e5d481daeb0d876006a17ac_549755815428) | | |

| [PART II](#ied98cc882e5d481daeb0d876006a17ac_34) | | | | | | | | |

| [PART I](#i4bf6d0bde838478985b72eb4052bc976_13) | | | | | | | | |

| [PART II](#i4bf6d0bde838478985b72eb4052bc976_34) | | | | | | | | |

Risk Management and Global Strategy

We have implemented processes, technologies, and controls to seek to assess, identify, and manage risks associated with cybersecurity threats.

Management considers cybersecurity risks within our overall approach to enterprise risk management.

We evaluate these risks based on several frameworks, including the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), Center for Internet Security (CIS) 18 Critical Security Controls, and the Payment Card Industry Data Security Standard (PCI DSS).

Our governance policies, including our Information Security Policy, outline high-level objectives designed to meet compliance and regulatory requirements.

We undertake a bi-annual NIST CSF and CIS 18 Critical Security Controls assessment, conducted by a third-party, to measure our program maturity.

We have implemented a variety of technologies, leveraging third-party security providers for some, and engage in multiple activities to seek to identify and mitigate vulnerabilities and risks in systems.

These include, among other activities, scanning for common vulnerabilities and exposures, penetration tests on internal and external networks, code scans on applications, allowed application listing, configuration management tools, employee awareness and training, and internal and external audits.

We also review, with various frequencies, on a risk-based priority select third parties with whom we do business, in an effort to reduce the likelihood of security incidents or business interruptions.

We maintain cybersecurity insurance that would apply to certain losses arising from significant security incidents.

We maintain a security operations center, supported by external providers and our employees, which provides threat detection and incident response capabilities.

We maintain cyber incident response plans and related playbooks, for execution by our information security team, in coordination with stakeholders (including legal counsel).

Significant incidents will be escalated to a Cybersecurity Materiality Committee to assess materiality based on qualitative and quantitative factors.

The Committee is composed of a cross-divisional group of executives representing the core business functions of Information Technology and Security, Operations, Administration, Finance and Accounting, and Legal.

We conduct periodic tabletop exercises, including at the executive level, to test our response processes and incident management procedures.

Governance

Our Board of Directors has delegated certain responsibilities to the Audit Committee of the Board.

The Audit Committee reviews and discusses with management the identification and mitigation of cybersecurity risks, including (among other things) the effectiveness of risk-management policies and practices designed to help safeguard our operations, financial systems, and data.

Our Vice President of Information Security and Chief Information Security Officer (CISO) presents cybersecurity-related topics, including program maturity progress, regularly to the Audit Committee.

The Internal Audit team, in its periodic compliance and risk assessment updates to the Audit Committee, also reports on its reviews of certain of our cybersecurity risk exposures, controls, and management actions.

The full Board also receives cybersecurity evaluations from time to time.

Our information security organization is led by our CISO, who has over eighteen years of relevant experience, serving in leadership roles across the retail and technology sectors.

The CISO is responsible for all aspects of our cybersecurity program, including cybersecurity engineering and architecture, cybersecurity operations, incident response, threat intelligence, identity and access management, cybersecurity risk and compliance, and vulnerability management.

Our CISO reports to our Chief Information and Digital Officer (CIDO), who has more than thirty years' experience in which he has led global digital responsibilities, including leading global cyber teams.

Our CIDO reports to the Chief Executive Officer.

Risks from Material Cybersecurity Threats

We and our third-party service and merchandise providers have experienced cybersecurity incidents and threats.

Based on the information available as of the date of this Form 10-K, we are not aware of any risks from actual cybersecurity incidents that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.

It is possible that there have been intrusions into our systems that have not been identified by our controls and procedures and that might manifest in significant events at a later time.

There can be no guarantee that the actions and controls we and our third-party service providers have implemented and are implementing will be sufficient to protect our systems, information or other property.

See “Risk Factors” in [Item 1A](#ied98cc882e5d481daeb0d876006a17ac_19) of this Form 10-K for more information on our cybersecurity-related risks.

At September [removed: 3, 2023,] [added: 1, 2024,] we operated [removed: 861] [added: 890] membership warehouses:

| United States and Puerto Rico | | | [removed: 477] [added: 499] | | | | | | [removed: 114] [added: 115] | | | | | | [removed: 591] [added: 614] | | |

[removed: (1)132] [added: (1)134] of the [removed: 184] [added: 187] leases are land-only leases, where Costco owns the building.

At the end of [removed: 2023,] [added: 2024,] our warehouses contained approximately [removed: 126.3] [added: 130.9] million square feet of operating floor space: [removed: 87.6] [added: 91.1] million in the U.S.; [removed: 15.3] [added: 15.5] million in Canada; and [removed: 23.4] [added: 24.3] million in Other International.

Total square feet associated with distribution and logistics facilities were approximately [removed: 33.1] [added: 31.9] million.

| Canada | | | 91 | | | | | | 17 | | | | | | 108 | | |

| Other International | | | 113 | | | | | | 55 | | | | | | 168 | | |

| Total | | | 703 | | | | | | 187 | | | | | | 890 | | |

| Canada | | | 90 | | | | | | 17 | | | | | | 107 | | |

| Other International | | | 110 | | | | | | 53 | | | | | | 163 | | |

| Total | | | 677 | | | | | | 184 | | | | | | 861 | | |

Our common stock is traded on the NASDAQ Global Select Market under the symbol “COST.” On October [removed: 3, 2023,] [added: 1, 2024,] we had [removed: 10,331] [added: 10,471] stockholders of record.

The following table sets forth information on our common stock repurchase activity for the fourth quarter of [removed: 2023] [added: 2024] (dollars in millions, except per share data):

| Total fourth quarter | | | | | | | | | [removed: 433,000] [added: 255,000] | | | | | | $ | [removed: 530.67] [added: 840.12] | | | | | [removed: 433,000] [added: 255,000] | | | | | | | | |

[removed: (1)The] [added: (1)Our share] repurchase program is conducted under a $4,000 authorization approved by our Board of Directors in January 2023, which expires in January 2027.

The following graph compares the cumulative total shareholder return assuming reinvestment of dividends on an investment of $100 in Costco common stock, S&P 500 Index, [removed: S&P Retail Select Index,] and the [removed: previously selected] S&P [removed: 500] Retail [added: Select] Index over the five years from September [removed: 2, 2018,] [added: 1, 2019,] through September [removed: 3, 2023.][added: 1, 2024.]

[removed: ][added: ]

| 2023 | | | 23 | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: $] | [added: 151] | | [removed: $] [added: 166] | [removed: 151] | |

| 2022 | | | 23 | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | |] $ | 150 | | 158 | | | [added: 179 | | |]

| 2021 | | | 20 | | | | | | | | | | | | | | | | | | | | | [removed: | | |] $ | 140 | | 158 | | | 172 | | | [added: 187 | | |]

| 2020 | | | 13 | | | | | | | | | | | | | | | | | | [removed: | | |] $ | 132 | | 152 | | | 184 | | | 193 | | | [added: 215 | | |]

| 2019 | | | 20 | | | | | | | | | | | | | | | [removed: | | |] $ | 129 | | 138 | | | 172 | | | 208 | | | 216 | | | [added: 226 | | |]

| 2018 | | | 21 | | | | | | | | | | | | [removed: | | |] $ | 116 | | 119 | | | 141 | | | 172 | | | 202 | | | 214 | | | [added: 231 | | |]

| 2017 | | | 26 | | | | | | | | | [removed: | | |] $ | 121 | | 142 | | | 158 | | | 176 | | | 206 | | | 237 | | | 247 | | | [added: 262 | | |]

| 2016 | | | 29 | | | | | | [removed: | | |] $ | 87 | | 97 | | | 118 | | | 131 | | | 145 | | | 173 | | | 204 | | | 212 | | | [added: 222 | | |]

| Totals | | | [removed: 861 | | | $] [added: 890] | [removed: 164] | | $ | 162 | | $ | 159 | | $ | 163 | | $ | 176 | | $ | 182 | | $ | 192 | | $ | 217 | | $ | 245 | | $ | 252 | | [added: $ | 260 | |]

| | | | | | | [removed: 2014 | | |] 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | 2023 | | | [added: 2024 | | |]

| 2017 and 2023 were 53-week fiscal years but have been normalized for purposes of [removed: comparability] [added: comparability.] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| May 13—June 9, 2024 | | | | | | | | | 66,000 | | | | | | $ | 806.79 | | | | | 66,000 | | | | | | $ | 3,026 | |

| June 10—July 7, 2024 | | | | | | | | | 46,000 | | | | | | 854.00 | | | | | | 46,000 | | | | | | 2,987 | | |

| July 8—August 4, 2024 | | | | | | | | | 55,000 | | | | | | 828.14 | | | | | | 55,000 | | | | | | 2,941 | | |

| August 5—September 1, 2024 | | | | | | | | | 88,000 | | | | | | 865.39 | | | | | | 88,000 | | | | | | 2,865 | | |

The S&P Retail Select Index comprises stocks in the S&P Total Market Index that are classified in the GICS Apparel Retail, Automotive Retail, Broadline Retail, Computer & Electronic Retail, Consumer Staples Merchandise Retail, Drug Retail, Food Retailers and Other Specialty Retail sub-industries.

| 2024 | | | 29 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 170 | |

| 2015 & Before | | | 686 | | | $ | 162 | | 162 | | | 168 | | | 181 | | | 189 | | | 199 | | | 225 | | | 256 | | | 266 | | | 276 | | |

| May 8—June 4, 2023 | | | | | | | | | 107,000 | | | | | | $ | 498.28 | | | | | 107,000 | | | | | | $ | 3,740 | |

| June 5—July 2, 2023 | | | | | | | | | 102,000 | | | | | | 523.05 | | | | | | 102,000 | | | | | | 3,687 | | |

| July 3—July 30, 2023 | | | | | | | | | 97,000 | | | | | | 548.20 | | | | | | 97,000 | | | | | | 3,634 | | |

| July 31—September 3, 2023 | | | | | | | | | 127,000 | | | | | | 550.58 | | | | | | 127,000 | | | | | | 3,563 | | |

This authorization revoked previously authorized but unused amounts, totaling $2,568.

The S&P Retail Select Index will prospectively replace in the graph the S&P 500 Retail Index to show a broader representation of industry performance and a broader index of peers.

| 2015 | | | 23 | | | | | | $ | 83 | | 85 | | | 94 | | | 112 | | | 122 | | | 136 | | | 163 | | | 189 | | | 199 | | |

| 2014 & Before | | | 663 | | | $ | 164 | | 165 | | | 165 | | | 170 | | | 184 | | | 191 | | | 201 | | | 228 | | | 259 | | | 268 | | |

[removed: The following] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the results of operations and financial condition.

MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Form 10-K).

This section generally discusses the results of operations for [removed: 2023] [added: 2024] compared to [removed: 2022.][added: 2023.]

For discussion related to the results of operations and changes in financial condition for [removed: 2022] [added: 2023] compared to [removed: 2021] [added: 2022] refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal year [removed: 2022] [added: 2023] Form 10-K, which was filed with the United States Securities and Exchange Commission (SEC) on October [removed: 5, 2022.][added: 11, 2023.]

Comparable sales is defined as net sales from warehouses open for more than one year, including remodels, relocations and expansions, and sales related to e-commerce [removed: websites] [added: sites] operating for more than one year.

The measure is intended as supplemental information and is not a substitute for net sales presented in accordance with U.S. generally accepted accounting principles (U.S. [removed: GAAP).][added: GAAP) and should be reviewed in conjunction with results reported in accordance with U.S. GAAP.]

Sales comparisons can also be particularly influenced by certain factors that are beyond our control: fluctuations in currency exchange rates (with respect to our international [removed: operations);] [added: operations) and] inflation or deflation [removed: and changes] in the cost of gasoline and associated competitive conditions.

Generating comparable sales growth is foremost a question of making available [removed: to our members] the right merchandise at the right prices, a skill that we believe we have repeatedly demonstrated over the long-term.

[removed: The impact to our] [added: Our] net sales and gross margin [removed: is] [added: are] influenced in part by our merchandising and pricing strategies in response to cost increases.

Our investments in merchandise pricing may include reducing prices on merchandise to drive sales or meet competition and holding prices steady despite cost increases instead of passing the increases on to our members, [removed: all] negatively impacting gross margin and gross margin as a percentage of net sales (gross margin [removed: percentage).][added: percentage) in the near term.]

We believe our gasoline business enhances traffic in our [removed: warehouses, but] [added: warehouses;] it generally has a lower gross margin percentage and lower SG&A [removed: expense,] [added: expense] relative to our non-gasoline businesses.

[removed: The negative] [added: Negative] aspects of such [removed: growth, however, including] [added: growth include] lower initial operating profitability relative to existing warehouses and cannibalization of sales at existing warehouses when openings occur in existing [removed: markets, are continuing to decline in significance as they relate to the results of our total operations.][added: markets.]

Our e-commerce business, domestically and internationally, [removed: generally] has a lower [removed: gross margin] [added: gross-margin] percentage than our warehouse operations.

The membership format is an integral part of our business and [removed: has a significant effect on our] profitability.

The extent to which we achieve growth in our membership base, increase the penetration of [removed: our] Executive [removed: members,] [added: memberships,] and sustain high renewal rates materially influences our profitability.

Rather, we believe that achieving our longer-term objectives of reducing employee [removed: turnover] [added: turnover, increasing productivity] and enhancing employee satisfaction requires maintaining compensation levels that are better than the industry average for much of our workforce.

Our operating model is generally the same across our U.S., Canadian, and Other International operating segments (see [Note [removed: 11](#i4bf6d0bde838478985b72eb4052bc976_139)] [added: 11](#ied98cc882e5d481daeb0d876006a17ac_139)] to the consolidated financial statements included in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report).

In discussions of our consolidated operating results, we refer to the impact of changes in foreign currencies relative to the U.S. dollar, which are differences between the [removed: foreign-exchange] [added: foreign exchange] rates we use to convert the financial results of our international operations from local currencies into U.S. dollars.

This impact [removed: of foreign-exchange rate changes] is calculated based on the difference between the current and prior period's [removed: currency] exchange rates.

Results expressed excluding the impacts of foreign exchange and gasoline prices [added: are intended as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP and] should be reviewed in conjunction with results reported in accordance with U.S. GAAP.

References to [removed: 2022] [added: 2024] and [removed: 2021] [added: 2022] relate to the 52-week fiscal years ended [removed: August 28, 2022,] [added: September 1, 2024] and August [removed: 29, 2021.][added: 28, 2022.]

Highlights for [removed: 2023 versus 2022] [added: 2024] include:

- We opened [removed: 26] [added: 30] new warehouses, including [removed: three relocations: 13] [added: one relocation: 23] net new in the [removed: U.S.] [added: U.S., one new in our Canadian segment,] and [removed: 10] [added: five] new in our Other International [removed: segment.][added: segment, compared to 26 new warehouses, including three relocations, in 2023;]

- Net sales increased [removed: 7%] [added: 5%] to [removed: $237,710,] [added: $249,625,] driven by [removed: a 3%] [added: an] increase in comparable [removed: sales,] sales [added: and sales] at new warehouses opened in [removed: 2022 and 2023,] [added: 2023] and [removed: the benefit of] [added: 2024, partially offset by] one [removed: additional] [added: less] week of sales in [removed: 2023;][added: 2024;]

[removed: -] Membership fee revenue increased [removed: 8% to $4,580,] [added: 5% in 2024,] driven by new member [removed: sign-ups,] [added: sign-ups and] upgrades to Executive [removed: membership, and one additional week of membership fees in 2023;][added: Membership.]

- SG&A expenses as a percentage of net sales increased [removed: 20] [added: six] basis points, [added: primarily] due to [removed: increased costs in] warehouse operations and other businesses, [removed: primarily] [added: which included the impact of] wage increases [removed: effective] in March and [removed: July 2022,] [added: September 2023] and [removed: March 2023, as well as lower] [added: July 2024, partially offset by] sales [removed: growth;][added: leverage and improved productivity;]

- The effective tax rate in [removed: 2023] [added: 2024] was [removed: 25.9%,] [added: 24.4%,] compared to [removed: 24.6%] [added: 25.9%] in [removed: 2022;][added: 2023;]

- Net income increased [removed: 8%] [added: 17%] to [removed: $6,292,] [added: $7,367,] or [removed: $14.16] [added: $16.56] per diluted share compared to [removed: $5,844,] [added: $6,292,] or [removed: $13.14] [added: $14.16] per diluted share in [removed: 2022;][added: 2023;]

[removed: - In] [added: On] January [added: 19,] 2023, the Board of Directors authorized a [removed: new] share repurchase program in the amount of [removed: $4,000; and][added: $4,000, which expires in January 2027.]

- In [removed: April 2023,] [added: April,] the Board of Directors approved a [removed: 13%] [added: 14%] increase in the quarterly cash dividend.

| | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Net Sales | | | $ | [removed: 237,710] [added: 249,625] | | | | | $ | [removed: 222,730] [added: 237,710] | | | | | $ | [removed: 192,052] [added: 222,730] | |

| U.S. | | | [removed: 7] [added: 4] | | % | | | | [removed: 17] [added: 7] | | % | | | | [removed: 16] [added: 17] | | % |

| Canada | | | [removed: 4] [added: 6] | | % | | | | [removed: 16] [added: 4] | | % | | | | [removed: 22] [added: 16] | | % |

| Other International | | | 9 | | % | | | | [removed: 10] [added: 9] | | % | | | | [removed: 23] [added: 10] | | % |

| Total Company | | | [removed: 7] [added: 5] | | % | | | | [removed: 16] [added: 7] | | % | | | | [removed: 18] [added: 16] | | % |

| Changes in comparable [removed: sales:] [added: sales(1):] | | | | | | | | | | | | | | | | | |

| U.S. | | | [removed: 3] [added: 4] | | % | | | | [removed: 16] [added: 3] | | % | | | | [removed: 15] [added: 16] | | % |

| Canada | | | [removed: 2] [added: 7] | | % | | | | [removed: 15] [added: 2] | | % | | | | [removed: 20] [added: 15] | | % |

| Other International | | | [removed: 3] [added: 8] | | % | | | | [removed: 7] [added: 3] | | % | | | | [removed: 19] [added: 7] | | % |

E-commerce and business center sales are allocated to the appropriate merchandise categories in the Net Sales discussion.

Our worldwide renewal rate may be adversely impacted by lower renewal rates in newer markets.

- We paid a special cash dividend of $15 per share in January 2024; and

_______________

(1)Comparable sales for 2024 were calculated using comparable retail weeks.

Sales increased $10,639, or 6% in core merchandise categories, increasing in all categories.

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

These increases were partially offset by one less week of membership fee income in 2024.

Renewal rates benefited from higher penetration of Executive members.

Effective September 1, 2024, we increased our membership fees in the U.S. and Canada for Gold Star (individual), Business, and Business affiliates to $65 per year.

The Executive membership fee increased from $120 to $130 (membership fee of $65, plus Executive upgrade of $65), and the maximum annual 2% reward associated with the Executive Membership increased from $1,000 to $1,250.

We expect these fee changes to increase revenues approximately $370 over the next two years, $190 of which will benefit fiscal 2025, primarily in the latter half of the year.

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

| Net sales | | | $ | 249,625 | | | | | $ | 237,710 | | | | | $ | 222,730 | |

This increase was positively impacted by: 19 basis points due to warehouse ancillary and other businesses, primarily e-commerce and gasoline; 16 basis points due to the absence of charges related to the discontinuation of our charter shipping activities that were recorded in the first and third quarters of 2023; and three basis points due to a LIFO benefit.

This increase was partially offset by four basis points in our core merchandise categories and three basis points due to increased 2% rewards.

The increase was primarily due to non-foods, partially offset by fresh foods and foods and sundries.

Our U.S. segment performed similarly to the consolidated results above.

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

SG&A expenses as percentage of net sales were lower in our Canadian and Other International operations.

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

The effective tax rate for 2024 was favorably impacted by discrete tax benefits of $94 related to the portion of the special dividend payable through our 401(k) plan, a net non-recurring tax benefit of $63 related to a transfer pricing settlement and certain true-ups of tax reserves, and $45 of excess tax benefits related to stock compensation.

The Organization of Economic Cooperation and Development (OECD) has introduced a framework to implement a global minimum corporate tax of 15% (referred to as Pillar 2) which is effective for fiscal 2025.

We will continue to evaluate the impacts of Pillar 2, but do not currently expect a material impact on our consolidated financial statements.

| | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

*Capital Expenditure Plans*

open up to 29 additional new warehouses, including three relocations, in 2025.

On May 18, 2024, we paid the $1,000 outstanding principal balance on the 2.750% Senior Notes, using cash and cash equivalents and short-term investments.

Cash flow provided by financing activities included proceeds from short-term borrowings and four Guaranteed Senior Notes totaling approximately $500, at fixed interest rates ranging from 1.400% to 2.120%, issued by our Japan subsidiary.

Dividends in 2024 included a special dividend of $15 per share, resulting in a payment of approximately $6,655.

*Share Repurchase Program*

See discussion of Recent Accounting Pronouncements in [Note 1](#ied98cc882e5d481daeb0d876006a17ac_106) to the consolidated financial statements included in [Item 8](#ied98cc882e5d481daeb0d876006a17ac_76) of this Report.

Merchandise costs in 2023 continued to be impacted by inflation, however at a lower rate than what we experienced in 2022.

Rapidly changing gasoline prices may significantly impact our near-term net sales growth.

Unless otherwise noted, references to net income relate to net income attributable to Costco.

We opened the same number of new warehouses, including relocations, in 2022;

- Gross margin percentage increased nine basis points, driven primarily by a smaller LIFO charge in 2023 compared to 2022 and our core merchandise categories.

This was partially offset by charges of $391, predominantly related to the discontinuation of our charter shipping activities;

Sales increased $12,761, or 7% in core merchandise categories, led by foods and sundries and fresh foods; while non-foods decreased.

Changes in foreign currencies relative to the U.S. dollar negatively impacted membership fees by $76 compared to 2022.

More members auto renewing and higher penetration of Executive members benefit renewal rates.

This two basis point increase was positively impacted by: 18 basis points due to a smaller LIFO charge in 2023 compared to 2022, and seven basis points due to core merchandise categories, predominantly foods and sundries.

Changes in foreign currencies relative to the U.S. dollar negatively impacted gross margin by approximately $349, compared to 2022, attributable to our Canadian and Other International Operations.

All segments were negatively impacted by increased 2% rewards.

Central operating costs were also higher by six basis points.

SG&A was positively impacted by eight basis points due to the prior year's write-off of information technology assets and a charge related to granting our employees additional vacation.

Changes in foreign currencies relative to the U.S. dollar decreased SG&A expenses by approximately $281 compared to 2022, attributable to our Canadian and Other International Operations.

Excluding discrete net tax benefits, the tax rate was 26.6%.

The effective tax rate for 2022 was impacted by net discrete tax benefits of $130, primarily due to excess tax benefits related to stock compensation.

Excluding discrete net tax benefits, the tax rate was 26.2%.

We believe that our U.S. current and projected asset position is sufficient to meet our U.S. liquidity requirements.

*Capital Expenditures*

Capital is also required for information systems, manufacturing and distribution facilities, initial warehouse operations, and working capital.

In 2022, cash flow used in financing activities included

payments to our former joint-venture partner for a dividend and the purchase of their equity interest in Taiwan, totaling $1,050 in the aggregate, and repayments of our 2.300% Senior Notes.

*Stock Repurchase Programs*

On January 19, 2023, the Board of Directors authorized a new share repurchase program in the amount of $4,000, which expires in January 2027.

wholly-owned captive insurance subsidiary, and participate in a reinsurance program.

We do not expect that any recently issued accounting pronouncements will have a material effect on our financial statements.

| [Reports of Independent Registered Public Accounting [removed: Firm](#i4bf6d0bde838478985b72eb4052bc976_82)] [added: Firm](#ied98cc882e5d481daeb0d876006a17ac_82)] | | | [removed: [31](#i4bf6d0bde838478985b72eb4052bc976_82)] [added: [33](#ied98cc882e5d481daeb0d876006a17ac_82)] | | |

| [Consolidated Statements of [removed: Income](#i4bf6d0bde838478985b72eb4052bc976_85)] [added: Income](#ied98cc882e5d481daeb0d876006a17ac_85)] | | | [removed: [34](#i4bf6d0bde838478985b72eb4052bc976_85)] [added: [36](#ied98cc882e5d481daeb0d876006a17ac_85)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i4bf6d0bde838478985b72eb4052bc976_88)] [added: Income](#ied98cc882e5d481daeb0d876006a17ac_88)] | | | [removed: [35](#i4bf6d0bde838478985b72eb4052bc976_88)] [added: [37](#ied98cc882e5d481daeb0d876006a17ac_88)] | | |

| [Consolidated Balance [removed: Sheets](#i4bf6d0bde838478985b72eb4052bc976_91)] [added: Sheets](#ied98cc882e5d481daeb0d876006a17ac_91)] | | | [removed: [36](#i4bf6d0bde838478985b72eb4052bc976_91)] [added: [38](#ied98cc882e5d481daeb0d876006a17ac_91)] | | |

| [Consolidated Statements of [removed: Equity](#i4bf6d0bde838478985b72eb4052bc976_97)] [added: Equity](#ied98cc882e5d481daeb0d876006a17ac_97)] | | | [removed: [37](#i4bf6d0bde838478985b72eb4052bc976_97)] [added: [39](#ied98cc882e5d481daeb0d876006a17ac_97)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i4bf6d0bde838478985b72eb4052bc976_100)] [added: Flows](#ied98cc882e5d481daeb0d876006a17ac_100)] | | | [removed: [38](#i4bf6d0bde838478985b72eb4052bc976_100)] [added: [40](#ied98cc882e5d481daeb0d876006a17ac_100)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i4bf6d0bde838478985b72eb4052bc976_103)] [added: Statements](#ied98cc882e5d481daeb0d876006a17ac_103)] | | | [removed: [39](#i4bf6d0bde838478985b72eb4052bc976_103)] [added: [41](#ied98cc882e5d481daeb0d876006a17ac_103)] | | |

We have audited the accompanying consolidated balance sheets of Costco Wholesale Corporation and subsidiaries (the Company) as of September [added: 1, 2024 and September] 3, 2023, [removed: and August 28, 2022,] the related consolidated statements of income, comprehensive income, equity, and cash flows for [added: each of] the [removed: 53-week] [added: fiscal years in the three-year] period ended September [removed: 3, 2023, and the 52-week periods ended August 28, 2022, and August 29, 2021,] [added: 1, 2024,] and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September [added: 1, 2024 and September] 3, 2023, and [removed: August 28, 2022, and] the results of its operations and its cash flows for each of the [removed: 53-week] [added: fiscal years in the three-year] period ended September [removed: 3, 2023, and the 52-week periods ended August 28, 2022, and August 29, 2021,] [added: 1, 2024,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September [removed: 3, 2023,] [added: 1, 2024,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated October [removed: 10, 2023,] [added: 8, 2024] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in [Note [removed: 1](#i4bf6d0bde838478985b72eb4052bc976_106)] [added: 1](#ied98cc882e5d481daeb0d876006a17ac_106)] to the consolidated financial statements, the Company estimates its self-insurance liabilities by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions.

The estimated self-insurance liabilities as of September [removed: 3, 2023,] [added: 1, 2024,] were [removed: $1,513] [added: $1,612] million, a portion of which related to workers’ compensation self-insurance liabilities for the United States operations.

We have audited Costco Wholesale Corporation and subsidiaries*’* (the Company) internal control over financial reporting as of September [removed: 3, 2023,] [added: 1, 2024,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September [removed: 3, 2023,] [added: 1, 2024,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September [added: 1, 2024 and September] 3, 2023, [removed: and August 28, 2022,] the related consolidated statements of income, comprehensive income, equity, and cash flows for [added: each of] the [removed: 53-week] [added: fiscal years in the three-year] period ended September [removed: 3, 2023, and the 52-week periods ended August 28, 2022, and August 29, 2021,] [added: 1, 2024,] and the related notes (collectively, the consolidated financial statements), and our report dated October [removed: 10, 2023,] [added: 8, 2024] expressed an unqualified opinion on those consolidated financial statements.

| | | | [removed: 53] [added: 52] Weeks Ended | | | | | | [removed: 52] [added: 53] Weeks Ended | | | | | | 52 Weeks Ended | | |

| | | | September [removed: 3, 2023] [added: 1, 2024] | | | | | | [removed: August 28, 2022] [added: September 3, 2023] | | | | | | August [removed: 29, 2021] [added: 28, 2022] | | |

| Net sales | | | $ | [removed: 237,710] [added: 249,625] | | | | | $ | [removed: 222,730] [added: 237,710] | | | | | $ | [removed: 192,052] [added: 222,730] | |

| Membership fees | | | [removed: 4,580] [added: 4,828] | | | | | | [removed: 4,224] [added: 4,580] | | | | | | [removed: 3,877] [added: 4,224] | | |

| Total revenue | | | [removed: 242,290] [added: 254,453] | | | | | | [removed: 226,954] [added: 242,290] | | | | | | [removed: 195,929] [added: 226,954] | | |

| Merchandise costs | | | [removed: 212,586] [added: 222,358] | | | | | | [removed: 199,382] [added: 212,586] | | | | | | [removed: 170,684] [added: 199,382] | | |

| Selling, general and administrative | | | [removed: 21,590] [added: 22,810] | | | | | | [removed: 19,779] [added: 21,590] | | | | | | [removed: 18,537] [added: 19,779] | | |

| Operating income | | | [removed: 8,114] [added: 9,285] | | | | | | [removed: 7,793] [added: 8,114] | | | | | | [removed: 6,708] [added: 7,793] | | |

| Interest expense | | | [removed: (160)] [added: (169)] | | | | | | [removed: (158)] [added: (160)] | | | | | | [removed: (171)] [added: (158)] | | |

| Interest income and other, net | | | [removed: 533] [added: 624] | | | | | | [removed: 205] [added: 533] | | | | | | [removed: 143] [added: 205] | | |

| INCOME BEFORE INCOME TAXES | | | [removed: 8,487] [added: 9,740] | | | | | | [removed: 7,840] [added: 8,487] | | | | | | [removed: 6,680] [added: 7,840] | | |

| Provision for income taxes | | | [removed: 2,195] [added: 2,373] | | | | | | [removed: 1,925] [added: 2,195] | | | | | | [removed: 1,601] [added: 1,925] | | |

| Net income including noncontrolling interests | | | [removed: 6,292] [added: 7,367] | | | | | | [removed: 5,915] [added: 6,292] | | | | | | [removed: 5,079] [added: 5,915] | | |

| Net income attributable to noncontrolling interests | | | — | | | | | | [removed: (71)] [added: —] | | | | | | [removed: (72)] [added: (71)] | | |

| NET INCOME ATTRIBUTABLE TO COSTCO | | | $ | [removed: 6,292] [added: 7,367] | | | | | $ | [removed: 5,844] [added: 6,292] | | | | | $ | [removed: 5,007] [added: 5,844] | |

| Basic | | | $ | [removed: 14.18] [added: 16.59] | | | | | $ | [removed: 13.17] [added: 14.18] | | | | | $ | [removed: 11.30] [added: 13.17] | |

| Diluted | | | $ | [removed: 14.16] [added: 16.56] | | | | | $ | [removed: 13.14] [added: 14.16] | | | | | $ | [removed: 11.27] [added: 13.14] | |

| Basic | | | [removed: 443,854] [added: 443,914] | | | | | | [removed: 443,651] [added: 443,854] | | | | | | [removed: 443,089] [added: 443,651] | | |

| Diluted | | | [removed: 444,452] [added: 444,759] | | | | | | [removed: 444,757] [added: 444,452] | | | | | | [removed: 444,346] [added: 444,757] | | |

| NET INCOME INCLUDING NONCONTROLLING INTERESTS | | | $ | [removed: 6,292] [added: 7,367] | | | | | $ | [removed: 5,915] [added: 6,292] | | | | | $ | [removed: 5,079] [added: 5,915] | |

| Foreign-currency translation adjustment and other, net | | | [removed: 24] [added: (23)] | | | | | | [removed: (721)] [added: 24] | | | | | | [removed: 181] [added: (721)] | | |

| Comprehensive income | | | [removed: 6,316] [added: 7,344] | | | | | | [removed: 5,194] [added: 6,316] | | | | | | [removed: 5,260] [added: 5,194] | | |

| Less: Comprehensive income attributable to noncontrolling interests | | | — | | | | | | [removed: 36] [added: —] | | | | | | [removed: 93] [added: 36] | | |

| COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO | | | $ | [removed: 6,316] [added: 7,344] | | | | | $ | [removed: 5,158] [added: 6,316] | | | | | $ | [removed: 5,167] [added: 5,158] | |

| | | | September [added: 1, 2024 | | | | | | September] 3, 2023 | | | | | | August 28, 2022 | | |

October 8, 2024

October 8, 2024

| | | | 52 Weeks Ended | | | | | | 53 Weeks Ended | | | | | | 52 Weeks Ended | | |

| | | | September 1, 2024 | | | | | | September 3, 2023 | | |

| Repurchases of common stock | | | (1,004) | | | | | | — | | | | | | (18) | | | | | | — | | | | | | (680) | | | | | | (698) | | | | | | — | | | | | | (698) | | |

| BALANCE AT SEPTEMBER 1, 2024 | | | 443,126 | | | | | | $ | 2 | | | | | $ | 7,829 | | | | | $ | (1,828) | | | | | $ | 17,619 | | | | | $ | 23,622 | | | | | $ | — | | | | | $ | 23,622 | |

| | | | 52 Weeks Ended | | | | | | 53 Weeks Ended | | | | | | 52 Weeks Ended | | |

| | | | September 1, 2024 | | | | | | September 3, 2023 | | | | | | August 28, 2022 | | |

| Proceeds from issuance of long-term debt | | | 498 | | | | | | — | | | | | | — | | |

| Financing lease payments and other financing activities, net | | | (137) | | | | | | (291) | | | | | | (180) | | |

| | | | 2024 | | | | | | 2023 | | |

To the

| | | | | | | | | | 46,950 | | | | | | 43,369 | | |

finance and operating leases based on the discounted future minimum lease payments over the term.

| Balance at September 1, 2024 | | | $ | 953 | | | | | $ | 26 | | | | | $ | 15 | | | | | $ | 994 | |

estimated using historical claims experience, demographic factors, severity factors, and other actuarial assumptions.

functional currency.

The Company is the principal when it has control of the merchandise or service before it is transferred to the member.

See [Note 7](#ied98cc882e5d481daeb0d876006a17ac_127) for additional information.

*Recent Accounting Pronouncements Not Yet Adopted*

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, which is intended to improve reportable segment disclosure requirements, primarily about significant segment expenses.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

In December 2023, the FASB issued ASU 2023-09, which focuses on income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, provide information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid.

The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied on a prospective basis.

Retrospective application is permitted.

The Company is evaluating both standards.

| Total | | | $ | 689 | | | | | $ | 688 | | | | | $ | 550 | |

| | | | 2024 | | | | | | 2023 | | |

There were no material fair value adjustments to these items during 2024.

In November 2023, the Company’s Japan subsidiary issued four Guaranteed Senior Notes, totaling approximately $500, at fixed interest rates ranging from 1.400% to 2.120%.

Interest is payable semi-annually, and maturity dates range from November 7, 2033, to November 7, 2043.

On May 18, 2024, the Company paid the $1,000 outstanding principal balance and interest on the 2.750% Senior Notes using cash and cash equivalents and short-term investments.

| | | | 2024 | | | | | | 2023 | | |

_____________

| 2029 | | | 150 | | |

| Thereafter | | | 3,340 | | |

| Total | | | $ | 5,919 | |

| | | | 2024 | | | | | | 2023 | | |

October 10, 2023

| | | | | | | | | | | | | | | | | | |

| Noncontrolling interests | | | — | | | | | | 5 | | |

| TOTAL EQUITY | | | 25,058 | | | | | | 20,647 | | |

| BALANCE AT AUGUST 30, 2020 | | | 441,255 | | | | | | $ | 4 | | | | | $ | 6,698 | | | | | $ | (1,297) | | | | | $ | 12,879 | | | | | $ | 18,284 | | | | | $ | 421 | | | | | $ | 18,705 | |

| Repurchases of common stock | | | (1,358) | | | | | | — | | | | | | (23) | | | | | | — | | | | | | (472) | | | | | | (495) | | | | | | — | | | | | | (495) | | |

| Financing lease payments | | | (291) | | | | | | (176) | | | | | | (67) | | |

| Other financing activities, net | | | — | | | | | | (4) | | | | | | 188 | | |

The estimated fair

| | | | | | | | | | 43,369 | | | | | | 39,932 | | |

| Balance at August 29, 2021 | | | $ | 953 | | | | | $ | 28 | | | | | $ | 15 | | | | | $ | 996 | |

predominantly through self-insurance.

The Company is the principal when it has control of the merchandise or service before it is transferred to the member, which generally is established when Costco is primarily responsible for merchandising decisions, pricing discretion, and maintains the relationship with the member, including assurance of member service and satisfaction.

The fair value of RSUs is calculated as the market value of the

See [Note 7](#i4bf6d0bde838478985b72eb4052bc976_127) for additional information on the Company’s stock-based compensation plans.

| Total | | | $ | 650 | | | | | $ | 633 | | | | | $ | 901 | |

_______________

| 2024 | | | $ | 1,081 | |

| Thereafter | | | 2,974 | | |

| Total | | | $ | 6,484 | |

| 2024 | | | $ | 277 | | | | | $ | 180 | | | | | | | |

| 2025 | | | 230 | | | | | | 175 | | | | | | | | |

| 2026 | | | 226 | | | | | | 100 | | | | | | | | |

| 2027 | | | 206 | | | | | | 91 | | | | | | | | |

| 2028 | | | 191 | | | | | | 92 | | | | | | | | |

| Thereafter | | | 2,271 | | | | | | 1,579 | | | | | | | | |

| Total(2) | | | 3,401 | | | | | | 2,217 | | | | | | | | |

| 2021 | | | 1,358 | | | | | | 364.39 | | | | | | 495 | | |

Purchases are made

This determination occurred in September 2023, at which time at least 33% of the units vested, as a result of the long service of all executive officers, with the exception of one executive officer who has less than 25 years of service.

| Outstanding at the end of 2022 | | | 3,449 | | | | | | $ | 338.41 | |

| Granted | | | 1,814 | | | | | | 471.47 | | |

| Forfeited | | | (116) | | | | | | 398.31 | | |

The Company recognized total net tax benefits of $62, $130 and $163 in 2023, 2022 and 2021.

During 2021, there was a net tax benefit of $70 related to the portion of the special dividend paid through the Company's 401(k) plan.

| Gross decreases—settlements | | | — | | | | | | (12) | | |

respect to certain matters described below, in addition to other immaterial accruals for matters not described below.

The Company is a defendant in an action commenced in July 2013 under the California Labor Code Private Attorneys General Act (PAGA) alleging violation of California Wage Order 7-2001 for failing to provide seating to employees who work at entrance and exit doors in California warehouses.

*Canela v.

The complaint sought relief under the California Labor Code, including civil penalties and attorneys’ fees.

The Chief Executive Officer and the Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of September [removed: 3, 2023,] [added: 1, 2024,] and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date.

Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of September [removed: 3, 2023,] [added: 1, 2024,] using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).

Based on its assessment, management has concluded that our internal control over financial reporting was effective as of September [removed: 3, 2023.][added: 1, 2024.]

The attestation of KPMG LLP, our independent registered public accounting firm, on the effectiveness of our internal control over financial reporting is included with the consolidated financial statements in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of this Report.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of [removed: 2023] [added: 2024] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

During the fiscal quarter ended September [removed: 3, 2023,] [added: 1, 2024,] no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or [added: a] non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Securities Exchange Act of 1934, as amended.

During 2023 we had three individual cardholders under a business membership in the name of the Embassy of the Islamic Republic of Iran at our subsidiary in Mexico.

Gross revenue during 2023 attributable to the membership was approximately $1,276, and our estimated profit on these transactions was approximately $100.

The membership was canceled during the second quarter of 2023.

The Company does not intend to continue these activities.

Information relating to the availability of our code of ethics for senior financial officers and a list of our executive officers appear in Part I, [Item [removed: 1](#i4bf6d0bde838478985b72eb4052bc976_16)] [added: 1](#ied98cc882e5d481daeb0d876006a17ac_16)] of this Report.

The information required by this Item concerning our directors and nominees for director is incorporated herein by reference to the sections entitled “Proposal 1: Election of Directors,” “Directors” and “Committees of the Board” in Costco’s Proxy Statement for its [removed: 2024] [added: 2025] annual meeting of shareholders, which will be filed with the SEC within 120 days of the end of our fiscal year (“Proxy Statement”).

We have adopted an Insider Trading Policy governing the purchase, sale and other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations and any applicable listing standards.

A copy of our policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

See the listing of Financial Statements included as a part of this Form 10-K in [Item [removed: 8](#i4bf6d0bde838478985b72eb4052bc976_76)] [added: 8](#ied98cc882e5d481daeb0d876006a17ac_76)] of Part II.

| 3.2 | | | | | | [Bylaws as amended of Costco Wholesale [removed: Corporation](https://www.sec.gov/Archives/edgar/data/909832/000090983223000034/costex328-k8923.htm)] [added: Corporation](https://www.sec.gov/Archives/edgar/data/909832/000090983224000039/costex328-k91624.htm)] | | | | | | | | | | | | 8-K | | | | | | | | | | | | [removed: 8/10/2023] [added: 9/20/2024] | | |

| 10.1* | | | | | | [Costco Wholesale Executive Health [removed: Plan](http://www.sec.gov/Archives/edgar/data/909832/000119312512428890/d388097dex101.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/909832/000119312512428890/d388097dex101.htm)] | | | | | | | | | | | | 10-K | | | | | | 9/2/2012 | | | | | | 10/19/2012 | | |

| 10.2* | | | | | | [2019 Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/909832/000090983218000018/costproxy2018.htm#sD1A6C6E2B97792177C11C8F81F35ABA5)] [added: Plan](https://www.sec.gov/Archives/edgar/data/909832/000090983218000018/costproxy2018.htm#sD1A6C6E2B97792177C11C8F81F35ABA5)] | | | | | | | | | | | | DEF 14 | | | | | | | | | | | | 12/17/2019 | | |

| 10.3* | | | | | | [Seventh Restated 2002 Stock Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/909832/000090983214000028/costdefproxy2014.htm#sADEFC67A06AE143EB0AD50BB166A9871)] [added: Plan](https://www.sec.gov/Archives/edgar/data/909832/000090983214000028/costdefproxy2014.htm#sADEFC67A06AE143EB0AD50BB166A9871)] | | | | | | | | | | | | DEF 14A | | | | | | | | | | | | 12/19/2014 | | |

| 10.4* | | | | | | [Fiscal [removed: 2023] [added: 2024] Executive Bonus [removed: Plan](https://www.sec.gov/Archives/edgar/data/909832/000119312522281298/d352180dex101.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/909832/000090983223000049/costex1018-k111723.htm)] | | | | | | | | | | | | 8-K | | | | | | | | | | | | [removed: 11/9/2022] [added: 11/24/2023] | | |

| 10.5* | | | | | | [Executive Employment Agreement, effective January 1, 2017, between W. Craig Jelinek and Costco Wholesale [removed: Corporation](http://www.sec.gov/Archives/edgar/data/909832/000090983216000040/costex10110q112016.htm)] [added: Corporation](https://www.sec.gov/Archives/edgar/data/909832/000090983216000040/costex10110q112016.htm)] | | | | | | | | | | | | 10-Q | | | | | | 11/20/2016 | | | | | | 12/16/2016 | | |

| 10.5.1* | | | | | | [Extension of the Term of the Executive Employment Agreement, effective January 1, 2019, between W. Craig Jelinek and Costco Wholesale [removed: Corporation](http://www.sec.gov/Archives/edgar/data/909832/000090983218000022/costex10210q112518.htm)] [added: Corporation](https://www.sec.gov/Archives/edgar/data/909832/000090983218000022/costex10210q112518.htm)] | | | | | | | | | | | | 10-Q | | | | | | 11/25/2018 | | | | | | 12/20/2018 | | |

| 10.6 | | | | | | [Form of Indemnification [removed: Agreement](http://www.sec.gov/Archives/edgar/data/909832/000103221099001718/0001032210-99-001718.txt)] [added: Agreement](https://www.sec.gov/Archives/edgar/data/909832/000103221099001718/0001032210-99-001718.txt)] | | | | | | | | | | | | 14A | | | | | | | | | | | | 12/13/1999 | | |

| 10.7* | | | | | | [Deferred Compensation [removed: Plan](http://www.sec.gov/Archives/edgar/data/909832/000144530513002422/costex10510k2013.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/909832/000144530513002422/costex10510k2013.htm)] | | | | | | | | | | | | 10-K | | | | | | 9/1/2013 | | | | | | 10/16/2013 | | |

| 10.8 | | | | | | [Citibank, N.A. Co-Branded Credit Card [removed: Agreement](http://www.sec.gov/Archives/edgar/data/909832/000090983215000012/costex10110qa51015.htm)] [added: Agreement](https://www.sec.gov/Archives/edgar/data/909832/000090983215000012/costex10110qa51015.htm)] | | | | | | | | | | | | 10-Q/A | | | | | | 5/10/2015 | | | | | | 8/31/2015 | | |

| 10.8.1 | | | | | | [First Amendment to Citi, N.A. Co-Branded Credit Card [removed: Agreement](http://www.sec.gov/Archives/edgar/data/909832/000090983215000017/costex10210q112215.htm)] [added: Agreement](https://www.sec.gov/Archives/edgar/data/909832/000090983215000017/costex10210q112215.htm)] | | | | | | | | | | | | 10-Q | | | | | | 11/22/2015 | | | | | | 12/17/2015 | | |

| 10.8.2 | | | | | | [Second Amendment to Citi, N.A. Co-Branded Credit Card [removed: Agreement](http://www.sec.gov/Archives/edgar/data/909832/000090983216000023/costex10110q21416.htm)] [added: Agreement](https://www.sec.gov/Archives/edgar/data/909832/000090983216000023/costex10110q21416.htm)] | | | | | | | | | | | | 10-Q | | | | | | 2/14/2016 | | | | | | 3/9/2016 | | |

| 10.8.3 | | | | | | [Third Amendment to Citi, N.A. Co-Branded Credit Card [removed: Agreement](http://www.sec.gov/Archives/edgar/data/909832/000090983216000032/costex105310k82816.htm)] [added: Agreement](https://www.sec.gov/Archives/edgar/data/909832/000090983216000032/costex105310k82816.htm)] | | | | | | | | | | | | 10-K | | | | | | 8/28/2016 | | | | | | 10/12/2016 | | |

| 10.8.4 | | | | | | [Fourth Amendment to Citi, N.A. Co-Branded Credit Card [removed: Agreement](http://www.sec.gov/Archives/edgar/data/909832/000090983218000002/costex10110q21818.htm)] [added: Agreement](https://www.sec.gov/Archives/edgar/data/909832/000090983218000002/costex10110q21818.htm)] | | | | | | | | | | | | 10-Q | | | | | | 2/18/2018 | | | | | | 3/15/2018 | | |

| 10.8.5 | | | | | | [Fifth Amendment to Citi, N.A. Co-Branded Credit Card [removed: Agreement](http://www.sec.gov/Archives/edgar/data/909832/000090983219000003/costex10210q21719.htm)] [added: Agreement](https://www.sec.gov/Archives/edgar/data/909832/000090983219000003/costex10210q21719.htm)] | | | | | | | | | | | | 10-Q | | | | | | 2/17/2019 | | | | | | 3/13/2019 | | |

| 10.8.12# | | | | | | [Twelfth Amendment to Citi, N.A. Co-Branded Credit Card Agreement](https://www.sec.gov/Archives/edgar/data/909832/000090983223000042/costex1081210k9323.htm) | | | | | | [removed: x] | | | | | | [added: 10-K] | | | | | | [added: 9/3/2023] | | | | | | [added: 10/11/2023] | | |

| 21.1 | | | | | | [Subsidiaries of the [removed: Company](https://www.sec.gov/Archives/edgar/data/909832/000090983223000042/costex21110k9323.htm)] [added: Company](https://www.sec.gov/Archives/edgar/data/909832/000090983224000049/costex21110k9124.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/909832/000090983223000042/costex23110k9323.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/909832/000090983224000049/costex23110k9124.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 31.1 | | | | | | [Rule 13a – 14(a) [removed: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983223000042/costex31110k9323.htm)] [added: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983224000049/costex31110k9124.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 32.1 | | | | | | [Section 1350 [removed: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983223000042/costex32110k9323.htm)] [added: Certifications](https://www.sec.gov/Archives/edgar/data/909832/000090983224000049/costex32110k9124.htm)] | | | | | | x | | | | | | | | | | | | | | | | | | | | |

# Certain information in this exhibit has been omitted because it is [removed: both] (i) [removed: not material] [added: immaterial] and (ii) customarily and actually treated by the registrant as private or confidential.

| 10.9* | | | | | | [Executive Employment Agreement effective January 1, 2024, between Ron Vachris and Costco Wholesale Corporation](https://www.sec.gov/Archives/edgar/data/909832/000090983223000065/costex10210q112623.htm) | | | | | | | | | | | | 10-Q | | | | | | 11/26/2023 | | | | | | 12/20/2023 | | |

| 19.1 | | | | | | [Insider Trading Policy](https://www.sec.gov/Archives/edgar/data/909832/000090983224000049/costex19110k9124.htm) | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| 97.1 | | | | | | [Costco Wholesale Corporation Incentive Compensation Clawback Policy](https://www.sec.gov/Archives/edgar/data/909832/000090983224000049/costex97110k9124.htm) | | | | | | x | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [added: By] | | | [added: | | | /s/ HELENA B. FOULKES | | | | | |] By | | | | | | /s/ RICHARD A. GALANTI | | |

| | | | | | | [added: Helena B. Foulkes *Director*] | | | [added: | | | | | | | | |] Richard A. Galanti *Executive Vice [removed: President, Chief Financial Officer] [added: President] and Director* | | |

| | | | | | | [removed: W. Craig Jelinek] [added: Ron M. Vachris] *Chief Executive [removed: Officer] [added: Officer, President] and Director* | | | | | | | | | | | | Hamilton E. James *Chairman of the Board* | | |

| | | | | | | [removed: Richard A. Galanti] [added: Gary Millerchip] *Executive Vice [removed: President,] [added: President and] Chief Financial Officer [removed: and Director] (Principal Financial Officer)* | | | | | | | | | | | | Daniel M. Hines *Senior Vice President and Corporate Controller (Principal Accounting Officer)* | | |

| | | | | | | [removed: Kenneth D. Denman] [added: Susan L. Decker] *Director* | | | | | | | | | | | | [removed: Sally Jewell] [added: Kenneth D. Denman] *Director* | | |

| | | | | | | [removed: Charles T. Munger] [added: Jeffrey S. Raikes] *Director* | | | | | | | | | | | | [removed: Jeffrey S. Raikes] [added: John W. Stanton] *Director* | | |

| By | | | | | | /s/ [removed: JOHN W. STANTON] [added: MARY (MAGGIE) A. WILDEROTTER] | | | | | | [removed: By] | | | | | | [removed: /s/ MARY (MAGGIE) A. WILDEROTTER] | | |

| | | | | | | [removed: John W. Stanton] [added: Mary (Maggie) A. Wilderotter] *Director* | | | | | | | | | | | | [removed: Mary (Maggie) A. Wilderotter *Director*] | | |

October 8, 2024

| | | | By | | | | | | /s/ GARY MILLERCHIP | | |

| | | | | | | | | | Gary Millerchip *Executive Vice President and Chief Financial Officer* | | |

October 8, 2024

| By | | | | | | /s/ RON M. VACHRIS | | | | | | By | | | | | | /s/ HAMILTON E. JAMES | | |

| By | | | | | | /s/ GARY MILLERCHIP | | | | | | By | | | | | | /s/ DANIEL M. HINES | | |

| By | | | | | | /s/ SUSAN L. DECKER | | | | | | By | | | | | | /s/ KENNETH D. DENMAN | | |

| By | | | | | | /s/ W. CRAIG JELINEK | | | | | | By | | | | | | /s/ SALLY JEWELL | | |

| | | | | | | W. Craig Jelinek *Director* | | | | | | | | | | | | Sally Jewell *Director* | | |

| By | | | | | | /s/ JEFFREY S. RAIKES | | | | | | By | | | | | | /s/ JOHN W. STANTON | | |

| | | | | | | | | | | | | | | | | | | | | |

October 10, 2023

| By | | | | | | /s/ W. CRAIG JELINEK | | | | | | By | | | | | | /s/ HAMILTON E. JAMES | | |

| By | | | | | | /s/ RICHARD A. GALANTI | | | | | | By | | | | | | /s/ DANIEL M. HINES | | |

| By | | | | | | /s/ RON M. VACHRIS | | | | | | By | | | | | | /s/ SUSAN L. DECKER | | |

| | | | | | | Ron M. Vachris *President, Chief Operating Officer and Director* | | | | | | | | | | | | Susan L. Decker *Director* | | |

| By | | | | | | /s/ KENNETH D. DENMAN | | | | | | By | | | | | | /s/ SALLY JEWELL | | |

| By | | | | | | /s/ CHARLES T. MUNGER | | | | | | By | | | | | | /s/ JEFFREY S. RAIKES | | |