SecProbe.io

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 May 20, 2025

Gary Millerchip
Executive Vice President and Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

 Re: Costco Wholesale Corporation
 Form 10-K for Fiscal Year Ended September 1, 2024
 File No. 000-20355
Dear Gary Millerchip:

 We have completed our review of your filing. We remind you that the
company and
its management are responsible for the accuracy and adequacy of their
disclosures,
notwithstanding any review, comments, action or absence of action by the staff.

 Sincerely,

 Division of Corporation
Finance
 Office of Trade &
Services
</TEXT>
</DOCUMENT>

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 Document Writer’s Direct Number: (425) 313-2060 Fax: (425) 313-6800 May 15, 2025 BY EDGAR Patrick Kuhn and Lyn Shenk Division of Corporation Finance Office of Trade & Services Securities and Exchange Commission 100 F Street N.E. Washington, D.C. 20549 Re: Costco Wholesale Corporation -- Form 10-K for the Fiscal Year Ended September 1, 2024, Response dated April 21, 2025 -- File No. 000-20355 Dear Mr. Kuhn and Mr. Shenk: In response to your letter of May 12, 2025 (the “Letter”), please see the discussion below, which corresponds to the paragraph in your letter. Form 10-K for the Fiscal Year Ended September 1, 2024 Business Memberships, page 5 1. We note your response to prior comment 1 and 3. Please clarify your disclosure so users have better understanding of your rational behind the methodology of your renewal rate calculation and active memberships. Response: We will revise our disclosures in our next Annual Report on Form 10-K to clarify the rationale behind the methodology of our renewal rate calculation and active memberships. Please contact me if you have any questions or further comments. Sincerely,      COSTCO WHOLESALE CORPORATION /s/    GARY MILLERCHIP Gary Millerchip Executive Vice President and Chief Financial Officer

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 May 12, 2025

Gary Millerchip
Executive Vice President and Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

 Re: Costco Wholesale Corporation
 Form 10-K for Fiscal Year Ended September 1, 2024
 Response dated April 21, 2025
 File No. 000-20355
Dear Gary Millerchip:

 We have reviewed your April 21, 2025 response to our comment letter and
have the
following comment(s).

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.
Unless we note otherwise, any references to prior comments are to comments in
our March
19, 2025 letter.

Form 10-K for the Fiscal Year Ended September 1, 2024
Business
Memberships, page 5

1. We note your response to prior comment 1 and 3. Please clarify your
disclosure so
 users have better understanding of your rational behind the methodology
of your
 renewal rate calculation and active memberships.
 May 12, 2025
Page 2

 Please contact Patrick Kuhn at 202-551-3308 or Lyn Shenk at 202-551-3380
if you
have questions regarding comments on the financial statements and related
matters.

 Sincerely,

 Division of Corporation
Finance
 Office of Trade &
Services
</TEXT>
</DOCUMENT>

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 Document Writer’s Direct Number: (425) 313-2060 Fax: (425) 313-6800 FOIA CONFIDENTIAL TREATMENT REQUESTED April 21, 2025 BY EDGAR Patrick Kuhn and Lyn Shenk Division of Corporation Finance Office of Trade & Services Securities and Exchange Commission 100 F Street N.E. Washington, D.C. 20549 Re: Costco Wholesale Corporation -- Form 10-K for the Fiscal Year Ended September 1, 2024, filed October 8, 2024 -- File No. 000-20355 Dear Mr. Kuhn and Mr. Shenk: In response to your letter of March 19, 2025 (the “Letter”), please see the discussion below, which corresponds to the paragraph in your letter. Form 10-K for the Fiscal Year Ended September 1, 2024 Business Membership, page 6 1. You disclose your membership renewal rate is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date. Please further describe your renewal rate calculation to us, including why you use this time period. Response: We received a Comment Letter dated January 22, 2014, concerning our Form 10-K for the fiscal year ended September 1, 2013, filed October 16, 2013, with a similar question regarding our membership renewal rate calculation. The following response is consistent with the response to that letter (dated February 4th, 2014), as to which the staff had no follow up. Our subsequent disclosures for the past decade have been consistent, and renewal patterns were comparable during that period. Historical data show that most members renew prior to expiration; the vast majority of those who renew late do so within six months of expiration. As such, measuring renewals only at Confidential Treatment Requested by Costco Wholesale Corporation C-001 [*] - Information omitted and provided under separate cover to the Staff pursuant to Rule 83 (17 C.F.R. § 200.83) the point of expiration would not provide investors an accurate picture of our renewal activity. Memberships that have an expiration date in the six months prior to the end of our reporting period are excluded from this calculation, regardless of whether or not they have been renewed. For example, our renewal rate calculation as of September 1, 2024, included all memberships that had expired between March 2023 and February 2024. These represented the base (i.e., denominator) of memberships used to evaluate the renewal rate. Using that same membership base, to the extent the membership has been renewed as of the most recent month-end prior to the reporting date, it is included in the renewal count used as the numerator. This calculation yields the reported renewal rate. 2. Please revise to clarify whether the membership figures in the table are as of a point in time or for a period of time. Response: The membership figures in the table are as of a point in time, at the end of years 2024, 2023, and 2022. We will conform our future disclosures accordingly. 3. You state membership counts include active memberships as well as memberships that have not renewed within the 12 months prior to the reporting date. Please tell us your basis for including memberships that have not renewed within the 12 months prior to the reporting date. Response: As noted above, a substantial number of our members renew after expiration and renewal timing can be impacted by seasonal trends, membership promotions and concentrations of new warehouse openings in a given period. Internal reports to management utilize the methodology reflected in our public filings regarding a membership count that includes members that have not renewed within the twelve months prior to the reporting date (to capture a full annual cycle). In our Forms 10-K since 2020 we have advised investors that the membership counts include those that have not renewed within the twelve months prior to the reporting date. Management's Discussion and Analysis of Financial Conditions and Results of Operations Results of Operations, page 25 4. Please revise to quantify factors to which changes are attributed. For example, you state the increase in net sales was attributable to an increase in comparable sales and the opening of new warehouses, partially offset by one less week of sales. As another example, you cite wage increases as impacting SG&A expenses. Please also revise to quantify impacts of changes in price and volume on revenue. Refer to Item 303(b)(2) of Regulation S-K. Confidential Treatment Requested by Costco Wholesale Corporation C-002 [*] - Information omitted and provided under separate cover to the Staff pursuant to Rule 83 (17 C.F.R. § 200.83) Response: Our 2024 Form 10-K disclosed the factors contributing to the increase in net sales as an increase in comparable sales and sales at new warehouses opened in 2023 and 2024, partially offset by the impact of one less week of sales. These drivers show the impact of changes in volume on revenue. Within the comparable sales discussion of MD&A, we also disclose that shopping frequency was the significant driver of comparable sales growth. In future filings, we will further quantify the drivers that we believe are material factors within our MD&A (acknowledging the examples you cite above for net sales and wage increases). For the period covered by the Form 10-K we concluded that the impact of changes in prices was immaterial, except for changes in the price of gasoline, which we disclosed, along with the change in the volume of gasoline gallons sold. Presented below for illustrative purposes is an excerpt from MD&A marked to show an example of the quantitative descriptions we intend to provide in our future filings (additions to existing language are in brackets): Net Sales Net sales increased $11,915 or 5% during 2024. The improvement was attributable to an increase in comparable sales [of $12,141 or 5%] and sales at new warehouses opened in 2023 and 2024 [of $4,252 or 2%], partially offset by the impact of one less week of sales in 2024 [estimated to be approximately 2%]. Notes to Consolidated Financial Statements Note 1 - Summary of Significant Accounting Policies Revenue Recognition, page 46 5. We note your disclosure that you derive a portion of your revenue from Citibank, including a royalty on purchases made on the co-branded card outside of Costco. Please tell us the amounts of revenue you recognized from Citibank, including such royalties, in each of the last three fiscal years and latest interim period. Please also tell us the nature and extent of any direct costs associated with this revenue. Finally, please tell us how you categorize this revenue in your table of disaggregated revenue in Note 11 on page 62. Response (dollars in millions): Under our Citibank, N.A. Co-Branded Credit Card Agreement, Citibank remitted to Costco revenues that totaled [*] in 2024, 2023 and 2022 and [*] during the first half of 2025. Direct costs associated with the agreement consisted of funds the Company contributed to cover a portion of the rebate that cardholders receive. These amounts totaled [*] in 2024, 2023 and 2022 and [*] during the first half of 2025 and are reflected within revenue in Confidential Treatment Requested by Costco Wholesale Corporation C-003 [*] - Information omitted and provided under separate cover to the Staff pursuant to Rule 83 (17 C.F.R. § 200.83) accordance with revenue-recognition guidance. These amounts include adjustments to the estimated breakage associated with the redemption of the rebate that cardholders earn, as disclosed in Note 1 to our financial statements. [*] Revenues related to the agreement are disclosed within the Warehouse Ancillary and Other Businesses line in the Disaggregated Revenue table in Note 11, similar to where we categorize other revenues that are not directly associated with our core merchandise categories or that have an immaterial impact on net sales. Please contact me if you have any questions or further comments. Sincerely,      COSTCO WHOLESALE CORPORATION /s/ G ARY M ILLERCHIP________________ Gary Millerchip Executive Vice President and Chief Financial Officer Confidential Treatment Requested by Costco Wholesale Corporation C-004 [*] - Information omitted and provided under separate cover to the Staff pursuant to Rule 83 (17 C.F.R. § 200.83)

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 Document Writer’s Direct Number: (425) 313-8792 VIA EDGAR April 15, 2025 Mr. Lyn Shenk Division of Corporate Finance Office of Trade & Services U.S. Securities and Exchange Commission 100 F Street N.E. Washington, DC 20549 Re:    Costco Wholesale Corporation     10-K for Fiscal Year Ended September 1, 2024     File No. 000-20355 Dear Mr. Shenk: Thank you for our call this morning. Per our call, Costco Wholesale Corporation has received an extension to April 21, 2025 to respond to your comments in your March 19, 2025 letter to our 10-K referenced above. Sincerely, COSTCO WHOLESALE CORPORATION /s/    A LEJANDRO C. T ORRES Alejandro C. Torres Corporate Counsel      999 Lake Drive ∙ Issaquah, WA 98027 ∙ (425) 313-8100 ∙ www.costco.com

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 Document Writer’s Direct Number: (425) 313-8792 VIA EDGAR March 21, 2025 Mr. Patrick Kuhn Division of Corporation Finance Office of Trade & Services U.S. Securities and Exchange Commission 100 F Street N.E. Washington, D.C. 20549 Re:    Costco Wholesale Corporation 10-K for Fiscal Year Ended September 1, 2024 File No. 000-20355 Dear Mr. Kuhn: Thank you for our call this morning. Per our call, Costco Wholesale Corporation has received a ten business-day extension to respond to your comments in your March 19, 2025, letter to our 10-K referenced above. We plan to submit our comments by April 16, 2025. Sincerely,      COSTCO WHOLESALE CORPORATION /s/    A LEJANDRO C. T ORRES Alejandro C. Torres Corporate Counsel

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<TEXT>
 March 19, 2025

Gary Millerchip
Executive Vice President and Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

 Re: Costco Wholesale Corporation
 Form 10-K for Fiscal Year Ended September 1, 2024
 File No. 000-20355
Dear Gary Millerchip:

 We have limited our review of your filing to the financial statements
and related
disclosures and have the following comment(s).

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.

Form 10-K for Fiscal Year Ended September 1, 2024
Business
Membership, page 6

1. You disclose your membership renewal rate is a trailing calculation that
captures
 renewals during the period seven to eighteen months prior to the
reporting date. Please
 further describe your renewal rate calculation to us, including why you
use this time
 period.
2. Please revise to clarify whether the membership figures in the table are
as of a point in
 time or for a period of time.
3. You state membership counts include active memberships as well as
memberships
 that have not renewed within the 12 months prior to the reporting date.
Please tell us
 your basis for including memberships that have not renewed within the 12
months
 prior to the reporting date.
 March 19, 2025
Page 2

Management's Discussion and Analysis of Financial Conditions and Results of
Operations
Results of Operations, page 25

4. Please revise to quantify factors to which changes are attributed. For
example, you
 state the increase in net sales was attributable to an increase in
comparable sales and
 the opening of new warehouses, partially offset by one less week of
sales. As another
 example, you cite wage increases as impacting SG&A expenses. Please also
revise to
 quantify impacts of changes in price and volume on revenue. Refer to
Item 303(b)(2)
 of Regulation S-K.
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies
Revenue Recognition, page 46

5. We note your disclosure that you derive a portion of your revenue from
Citibank,
 including a royalty on purchases made on the co-branded card outside of
Costco.
 Please tell us the amounts of revenue you recognized from Citibank,
including such
 royalties, in each of the last three fiscal years and latest interim
period. Please also tell
 us the nature and extent of any direct costs associated with this
revenue. Finally,
 please tell us how you categorize this revenue in your table of
disaggregated revenue
 in Note 11 on page 62.
 In closing, we remind you that the company and its management are
responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review,
comments,
action or absence of action by the staff.

 Please contact Patrick Kuhn at 202-551-3308 or Lyn Shenk at 202-551-3380
with any
questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Trade
& Services
</TEXT>
</DOCUMENT>

United States securities and exchange commission logo
April 28, 2022
Richard Galanti
Executive Vice President and Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027
Re:Costco Wholesale Corporation
Form 10-K for the Fiscal Year Ended August 29, 2021
Filed October 6, 2021
File No. 000-20355
Dear Mr. Galanti:
            We have completed our review of your filing.  We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Trade & Services

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Document

                                                                                                                        Writer’s Direct Number:  (425) 313-8203

                                                                                                                                                     Fax:  (425) 313-6593

April 22, 2022

BY EDGAR

Robert Shapiro and Theresa Brillant

Division of Corporation Finance

Office of Trade & Services

Securities and Exchange Commission

100 F Street N.E.

Washington, D.C.  20549

Re: Costco Wholesale Corporation -- Form 10-K for the Fiscal Year Ended August 29, 2021, filed

October 6, 2021 -- File No. 000-20355

Dear Mr. Shapiro and Ms. Brillant:

In response to your letter of April 18, 2022 (the “Letter”), please see the discussion below, which corresponds to the paragraph in your letter.

Form 10-K for the Fiscal Year Ended August 29, 2021

Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Net Sales, page 25

We note per page 23 of your Form 10-K that the inflationary impact to net sales and gross margin is influenced in part by your merchandising and pricing strategies in response to cost increases. We note discussion of these strategies in your Q4 2021, Q1 2022 and Q2 2022 Earnings calls. Please explain and discuss these strategies, similar to the discussion in your earnings calls, as deemed appropriate, in future filings. Refer to Item 303(b) or Regulation S-K.

Response:

We will revise our future disclosure to explain and discuss our merchandising and pricing strategies in response to cost increases.

Please contact me if you have any questions or further comments.

Sincerely,

COSTCO WHOLESALE CORPORATION

/s/    RICHARD A. GALANTI

Richard A. Galanti

Executive Vice President, Chief Financial Officer and Director

United States securities and exchange commission logo
April 18, 2022
Richard Galanti
Executive Vice President and Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027
Re:Costco Wholesale Corporation
Form 10-K for the Fiscal Year Ended August 29, 2021
Filed October 6, 2021
File No. 000-20355
Dear Mr. Galanti:
            We have limited our review of your filing to the financial statements and related
disclosures and have the following comment.  In our comment, we may ask you to provide us
with information so we may better understand your disclosure.
            Please respond to the comment within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to the comment, we may have additional comments.
Form 10-K for the Fiscal Year Ended August 29, 2021
Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Net Sales, page 25
1.We note per page 23 of your Form 10-K that the inflationary impact to net sales and gross
margin is influenced in part by your merchandising and pricing strategies in response to
cost increases.  We note discussion of these strategies in your Q4 2021, Q1 2022, and Q2
2022 Earnings calls.  Please explain and discuss these strategies, similar to the discussion
in your earnings calls, as deemed appropriate, in future filings.  Refer to Item 303(b) or
Regulation S-K.
            In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.

 FirstName LastNameRichard Galanti
 Comapany NameCostco Wholesale Corporation
 April 18, 2022 Page 2
 FirstName LastName
Richard Galanti
Costco Wholesale Corporation
April 18, 2022
Page 2
            You may contact Robert Shapiro at 202-551-3273 or Theresa Brillant at 202-551-3307
with any questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services

Mail Stop 3561

May 31, 2016

Richard A. Galanti
Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 30, 2015
Filed October 14, 2015
File No. 0 -20355

Dear Mr. Galanti :

We have completed our review of your filing .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We u rge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Jennifer Thompson

Jennifer Thompson
Accounting Branch Chief
Office of Consumer Products

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 Writer’s Direct Number: (425) 313-8203

Fax: (425) 313-6593

May 18, 2016

 BY EDGAR

 Jennifer Thompson

Accounting Branch Chief

 Office
of Consumer Products

 United States Securities and Exchange Commission

Mail Stop 3561

 Washington, D.C.
20549

 Re:

 Costco Wholesale Corporation — Form 10-K for the Fiscal Year Ended August 30, 2015, filed
October 14, 2015 — File No. 0-20355

 Dear Ms. Thompson:

In response to your letter of May 9 (the “Letter”), please see the discussion below, which corresponds to the paragraphs in
your letter.

 Form 10-K for the Fiscal Year Ended August 30, 2015

Financial Statements for the Fiscal year Ended August 30, 2015

Note 8 – Income Taxes, page 59

We have read your response to comment 3. Please address the following:

 •

 We note you had historically asserted that foreign undistributed earnings were indefinitely reinvested, and
your response states that as a general matter you had considered the earnings of the Canadian subsidiaries to be permanently reinvested. Explain to us in more detail what specific evidence you had historically relied on to support your assertion
that your Canadian undistributed earnings were indefinitely reinvested. In this regard, tell us whether you had documented plans for reinvestment of your Canadian earnings, such as working capital forecasts, long-term liquidity plans, capital
improvement programs, investment plans, or other plans you relied on;

 Jennifer Thompson, Accounting Branch Chief

United States Securities and Exchange Commission

May 18, 2016

 •

 Also tell us in more detail at what point you determined that these Canadian earnings would not be
indefinitely reinvested, and explain what changed from your previous plans to cause this change in conclusion. As part of your response, tell us the amount of each Canadian repatriation you made and explain in detail the underlying reasons for each
repatriation, including explaining which of your operations received or will receive each repatriation; and

 •

 Please tell us how you concluded that the remaining $371 million of Canadian earnings and any future
Canadian earnings should be considered permanently reinvested in light of your repatriation of amounts in previous years. Please address your specific plans for reinvestment for these undistributed earnings that demonstrate remittance of the
earnings would be postponed indefinitely.

 Response:

Under ASC 740-30-25-17, Costco Wholesale may overcome the presumption in ASC 740-30-25-3 that all undistributed earnings of a subsidiary will
be transferred to the parent entity and such undistributed earnings included in consolidated income generally shall be accounted for as a temporary difference and therefore will not have to accrue United States (U.S.) income taxes on the
undistributed earnings of its subsidiary if sufficient evidence shows that the subsidiary has invested or will invest the undistributed earnings indefinitely or that the earnings will be remitted in a tax-free liquidation. This
includes a situation where repatriation of earnings would result in no recognition of a U.S. deferred tax liability. Although we have historically asserted that foreign undistributed earnings will be permanently reinvested, we may repatriate
undistributed earnings to the extent we can do so without adverse tax consequence. Repatriation of undistributed earnings without adverse tax consequence is consistent with generally accepted accounting principles. The Company evaluates our
positions regarding permanent reinvestment on at least a quarterly basis.

 The Company has operated foreign subsidiaries for decades and
has generally taken the position that its undistributed earnings of foreign affiliates were permanently reinvested. The primary factor supporting the determination of permanent reinvestment, as previously discussed in our response to the Staff dated
April 15, 2016, is the ability of the Company’s U.S. operations to not only meet but significantly exceed its cash requirements without accessing foreign undistributed earnings.

 2

 Jennifer Thompson, Accounting Branch Chief

United States Securities and Exchange Commission

May 18, 2016

 During the relevant periods, the Company consistently generated cash flow in the U.S. more
than sufficient to support the ongoing U.S. operations and expansion. At the end of fiscal 2013, the Company held cash and cash equivalents in the U.S. of nearly $2.7 billion and short-term investments of over $1 billion. In fiscal 2014 the U.S.
operations generated excess cash. At the end of fiscal 2014, the Company held cash and cash equivalents in the U.S. of over $2.7 billion and short-term investments of over $1.4 billion. In fiscal 2015 the U.S. operations generated excess cash. At
the end of fiscal 2015, notwithstanding having paid a special cash dividend of $2.2 billion (less than half of which was financed by external borrowing) the Company held cash and cash equivalents in the U.S. of over $2.8 billion and short-term
investments of over $1.4 billion. Expectations at the end of fiscal 2015 were that in fiscal 2016 the U.S. operations would continue to generate excess cash. In addition, through these periods, the Company maintained a balance sheet with the
capacity to borrow amounts well beyond existing borrowings while still maintaining a high credit rating.

 In addition to the cash needs in
the U.S. not requiring repatriation of foreign earnings, with particular reference to Canada, the Company has earned higher returns for invested cash as compared to the U.S. (with comparable risk profiles). For fiscal years 2013-2015, the yields on
cash invested in Canada were three to five times those of the U.S. In light of the lack of need for cash in the U.S., the investment plans to seek superior returns for Canadian investments further buttressed the position that Canadian earnings were
permanently reinvested.

 Of even greater significance, as indicated in our prior letter, is the projected need for investments in certain
of the Company’s foreign subsidiaries other than Canada which the Company has planned to fund with excess cash that may be generated in Canada. Nascent operations in France, Iceland, and Spain and more developed operations in Australia and
Japan are projected to be net users of cash in the coming years. The investment plans for these countries generally involve acquisition of real estate for and construction of buildings for new membership warehouse locations. In addition, the Company
is continually reviewing prospects for opening membership warehouses in other countries. In 2013 and 2014 the Company took steps to establish a foreign corporate vehicle to, at the appropriate time if desired, take ownership of our Canadian
subsidiaries to facilitate the receipt of cash from Canada to invest in other foreign operations.

 The two repatriations in fiscal 2014
and fiscal 2015 from Canada to the U.S. were fully consistent with ASC 740-30-25-17 because, due to fluctuations in exchange rates and other factors, these repatriations were accomplished without adverse tax consequences and provided the Company
with greater financial flexibility. Neither event represented a change in the Company’s position on permanent reinvestment. The amounts of the repatriations were $904 million in fiscal 2015 and $685 million in fiscal 2016; both amounts went to
the Company’s U.S.

 3

 Jennifer Thompson, Accounting Branch Chief

United States Securities and Exchange Commission

May 18, 2016

operations. At the times of these repatriations the U.S. operations had, consistent with historical positions, a surplus of cash and did not require or need this cash for its own use.

Neither event implies that there has been or should be a change in the Company’s position concerning the $371 million of earnings
remaining in Canada at the end of fiscal 2015 or for future Canadian earnings. This balance of $371 million was necessary to meet the operating cash needs in Canada during fiscal 2016 when the actual cash balances have been as low as $105 million.
The Company’s intention continues to be that unremitted earnings will be utilized for short-term cash needs in Canada (working capital and the opening of new membership warehouse locations) or for other foreign operations. In any case, the
Company does not project to need any undistributed Canadian earnings to meet cash needs in the U.S. Should the opportunity arise to repatriate some of these or future earnings without adverse tax consequences, as occurred during 2014 and 2015 (as
explained), the Company may again choose to do that which is consistent with the principles of ASC 740-30-25-17.

 Please contact me if you
have any questions or further comments.

 Sincerely,

 COSTCO WHOLESALE CORPORATION

 /s/ Richard A. Galanti

 Richard A. Galanti

 Executive Vice President and

 Chief Financial Officer

 4

Mail Stop 3561

May 9, 2016

Richard A. Galanti
Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for  the Fiscal Year Ended August 30, 2015
 Response Dated April 18 , 2016
File No. 0 -20355

Dear Mr. Galanti :

We have reviewed  your April 18 , 2016  response to our comment  letter  and have the
following comment .  In our comment , we may ask you to provide us with information so we may
better understand your disclosure.

Please respond to this comment  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you  do not believe our
comment  applies  to your facts and circumstances, please tell us why in your response.

After reviewing your response to this comment, we may have additional comments.
Unless we note otherwise, our references to our prior comment  are to comments in our April 5 ,
2016  letter.

Form 10 -K for the Fiscal Year Ended August 30, 2015

Financial Statements for the Fiscal Year Ended August 30, 2015

Note 8 – Income Taxes, page 59

We have read your response to comment 3.  Please address the following:

 We note you had histo rically asserted that foreign undistributed earnings were
indefinitely reinvested, and your response states that as a general matter you had
considered the earnings of the Canadian subsidiaries to be permanently reinvested.
Explain to us in more detail wh at specific evidence you had historically relied on to
support your assertion that your Canadian undistributed earnings were indefinitely
reinvested.  In this regard, tell us whether you had documented plans for reinvestment of

Richard A. Galanti
Costco Wholesale Corporation
May 9, 2016
Page 2

 your Canadian earnings, such  as working capital forecasts, long -term liquidity plans,
capital improvement programs, investment plans, or other plans you relied on;

 Also tell us in more detail at what point you determined that these Canadian earnings
would not be indefinitely reinvested, and explain what changed from your previous plans
to cause this change in conclusion.  As part of your response, tell us the amount of each
Canadian repatriation you made and explain in detail the underlying reasons for each
repatriation, inclu ding explaining which of your operations received or will receive each
repatriation; and

 Please tell us how you concluded that the remaining $371 million of Canadian earnings
and any future Canadian earnings should be considered permanently reinvested in light of
your repatriation of amounts in previous years.  Please address your specific plans for
reinvestment for these undistributed earnings that demonstrate remittance of the earnings
would be postponed indefinitely.

You may contact  Robert Babula, Staff Accountant  at (202) 551 -3339 , if you have
questions regarding comments on the financial statements and re lated matters.  Please contact me
at (202) 551 -3737 with any other questions.

Sincerely,

 /s/ Jennifer Thompson

Jennifer Thompson
Accounting Bran ch Chief
Office of Consumer Products

CORRESP
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 Writer’s Direct Number: (425) 313-8203

Fax: (425) 313-6593

 April 18, 2016

BY EDGAR

 Jennifer Thompson

Accounting Branch Chief

 Office of Consumer Products

United States Securities and Exchange Commission

 Mail Stop 3561

 Washington, D.C. 20549

Re:
Costco Wholesale Corporation — Form 10-K for the Fiscal Year Ended August 30, 2015, filed October 14, 2015 — File No. 0-20355

Dear Ms. Thompson:

 In response to your letter of
April 5 (the “Letter”), please see the discussion below, which corresponds to the numbered paragraphs in your letter.

 Form 10-K for the
Fiscal Year Ended August 30, 2015

 Item 9B – Other Information, page 33

1.
We note the discussion of your co-branded credit card transition. Your disclosure only addresses the benefits that you will receive from the new Program Agreement once it is implemented. Please tell us any negative
impacts you experienced during fiscal 2015 from this credit card transition and how you considered discussing such impacts in your analysis of results of operations. As part of your response, please tell us the extent to which new credit card
sign-ups slowed or ceased during fiscal 2015 and explain why your analysis of results did not discuss a decrease in bounty revenue and its impact on your gross margin or net income.

Response:

 In preparing our
fiscal 2015 Form 10-K, we evaluated the impact of the credit card transition on our sales, gross margin, and selling, general and administrative expenses. Although there

 Jennifer Thompson, Accounting Branch Chief

United States Securities and Exchange Commission

 April 18, 2016

 was a slowdown in co-branded credit card sign-ups due to the impending credit card
transition, the negative impact was immaterial to our results of operations for fiscal 2015 and therefore not separately discussed in our Management’s Discussion and Analysis (MD&A).

We did not stop actively signing up members for credit cards until the first quarter of our fiscal 2016. The resulting negative impact of lower
bounty revenue was disclosed in our Forms 10-Q for the first and second quarters:

 Gross Margin

Q1 2016

 The decrease in core was
primarily driven by a reduction in the sales penetration in food and sundries and a decrease in the bounty revenue earned for new co-branded credit card signs-ups in the U.S. We expect to be negatively impacted by the decrease in bounty revenue
until we transition to our new co-branded credit card arrangement (at p. 22).

 Q2 2016

These increases were partially offset by a decrease in our core merchandise categories of three basis points, primarily as a result of lower
bounty revenue earned for new co-branded credit card sign-ups in the U.S. We expect to be negatively impacted by the decrease in bounty revenue until we transition to our new co-branded credit card arrangement (at p. 24).

2.
We note your statement that loyalty rewards earned by co-branded cardholders are expected to be in the form of certificates redeemable at Costco, for cash or merchandise. We have the following comments:

•

Please confirm our assumption, if true, that Citi will reimburse you for the face value of those certificates.

•

Please tell us the basis for your statement that you expect most cardholders will redeem the certificates for merchandise. If you make a similar disclosure in future filings, please disclose the basis for this
belief including whether reward certificates were historically redeemable for cash.

•

Also tell us how you will account for certificates that are redeemed for cash.

Response:

 We will accept these
certificates as a form of payment from our members and receive reimbursement from Citi for the total dollar value of reward certificates redeemed. As

 2

 Jennifer Thompson, Accounting Branch Chief

United States Securities and Exchange Commission

 April 18, 2016

disclosed in the 2015 Form 10-K, Item 9B, loyalty rewards provided to cardholders under the program will primarily be funded by Citi, but also partially funded by Costco, under certain
circumstances.

 Our statement that we expect that most cardholders will redeem certificates for merchandise was based on historical
redemption data available from our system, which identifies whether certificates are redeemed for cash or used for merchandise purchases. We will revise our future disclosure, to the extent it is made, to state: “Under the previous co-brand
credit card program, reward certificates were redeemable for merchandise or cash. Based on historical redemption patterns, Costco expects that most cardholders will redeem reward certificates for merchandise.”

Redeemed reward certificates will be recorded as a receivable, whether the redemption is for cash or used for merchandise purchases. Citi
will then reimburse Costco for reward certificates redeemed.

 Note 8 – Income Taxes, page 59

3.
We note you changed your position in the fourth quarters of 2014 and 2015 regarding the undistributed earnings of your Canadian operations such that a portion of the earnings were no longer considered permanently
reinvested. Please tell us in significantly more detail the facts and circumstances which led to the changes in your position and the underlying reasons for repatriating these earnings. Further, tell us in detail how you evaluated the criteria for
the exception to recognition of a deferred tax liability in accordance with ASC 740-30-25-17 and 18 for the remaining Canadian undistributed earnings that are intended to be indefinitely reinvested. In this regard, describe the type of evidence that
sufficiently demonstrates that remittance of the remaining Canadian earnings will be postponed indefinitely. As part of your response, please quantify the amount of cumulative undistributed earnings from your Canadian operations for which you have
not provided for U.S. deferred taxes and quantify the amount of cash and cash equivalents and short-term investments held by your Canadian operations.

Response:

 ASC 740-30-25-17
provides that a parent entity may overcome the presumption in ASC 740-30-25-3 that all undistributed earnings of a subsidiary will be transferred to the parent entity and such undistributed earnings included in consolidated income generally shall be
accounted for as a temporary difference and therefore will not have to accrue income taxes

 3

 Jennifer Thompson, Accounting Branch Chief

United States Securities and Exchange Commission

 April 18, 2016

on the undistributed earnings of its subsidiary if sufficient evidence shows that the subsidiary has invested or will invest the undistributed earnings indefinitely or that the earnings
will be remitted in a tax-free liquidation. This would include a situation where repatriation of earnings would result in no recognition of a deferred liability.

On a regular basis, Costco evaluates various criteria in accordance with ASC 740-30-25-17 and 18. These have included the following: the vast
majority of Costco’s operations are located in the United States (U.S.), and the United States operations historically have been able to meet their cash needs without the need to draw upon cash from non-U.S. subsidiaries; conversely, most of
our foreign subsidiaries are less mature than the operations in the United States and Canada and generally have a high ratio of cash needs to cash generation capacity, making it likely that Costco would seek to use any excess cash generated in
Canada in one or more of these other countries, rather than repatriating those earnings to the United States. With particular respect to Canada, investments in securities of like kind and risk have historically generated higher returns in Canada
than in the United States.

 Based on these factors, as well as the cash needs of the Canadian subsidiaries, as a general matter Costco has
considered the earnings of the Canadian subsidiaries to be permanently reinvested. Accordingly, no accrual was made historically for United States income tax concerning those earnings.

Although we have historically asserted that foreign undistributed earnings will be permanently reinvested, we may repatriate undistributed
earnings to the extent we can do so without adverse tax consequence.

 With respect to fiscal 2014 and 2015, Costco determined that a
portion of Canadian earnings could be repatriated without adverse tax consequences. The determination in both cases was based in part on substantial weakening of the Canadian dollar versus the U.S. dollar, which directly impacted the foreign tax
credit associated with the partial repatriation of these earnings, resulting in immaterial tax consequences for each change in our position on permanent reinvestment as disclosed in our Form 10-K for 2014 and 2015. Neither event, however,
changed the fundamental premises of our analysis under ASC 740-30-25-17 and 18, as described above.

 As of the end of fiscal 2015, our
Canadian subsidiaries had $1,015 million of cumulative undistributed earnings and basis on which U.S. deferred taxes have not been provided and $1,047 million of cash and cash equivalents. At that time, Costco had unremitted earnings and basis on
which U.S. taxes had been provided but which had not been distributed of $676 million. Net of this anticipated distribution, ending cash and cash equivalents at the end of

 4

 Jennifer Thompson, Accounting Branch Chief

United States Securities and Exchange Commission

 April 18, 2016

fiscal 2015 in Canada would have been $371 million. This balance continues to be subject to the premises of the Costco’s ASC 740-30-25-17 and 18, as described above: this cash is expected to
be used to fund operations in Canada (giving due consideration to cyclical cash needs) and needs of Costco subsidiaries outside the United States, to the extent not needed in Canada; and the cash needs of the United States operations will not
require access to those funds. At the end of fiscal 2015, the U.S. operations had $4.3 billion in cash and cash equivalents and short term investments.

As you requested, we acknowledge that: the Company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to
disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under
the federal securities laws of the United States.

 Please contact me if you have any questions or further comments.

Sincerely,

COSTCO WHOLESALE CORPORATION

 /s/ Richard A. Galanti

Richard A. Galanti

Executive Vice President and Chief Financial Officer

 5

Mail Stop 3561

April 5, 2016

Richard A. Galanti
Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 30 , 201 5
Filed October 14, 2015
File No. 0 -20355

Dear Mr. Galanti :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circums tances, please tell us why in your response.

After reviewing your response to these  comments, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended August 30, 2015

Item 9B – Other Information, page 33

1. We note the discussio n of your co -branded credit card transition.  Your disclosure only
addresses the benefits that you will receive from the new Program Agreement once it is
implemented.  Please tell us any negative impacts you experienced during fiscal 2015
from this credit card transition and how you considered discussing such impacts in your
analysis of results of operations.  As part of your response, please tell us the extent to
which new credit card sign -ups slowed or ceased during fiscal 2015 and explain why
your analys is of results did not discuss a decrease in bounty revenue and its impact on
your gross margin or net income.

2. We note your statement that loyalty rewards earned by co -branded cardholders are
expected to be in the form of certificates redeemable at Costco,  for cash or merchandise.
We have the following comments:

Richard A. Galanti
Costco Wholesale Corporation
April 5, 2016
Page 2

 Please confirm our assumption, if true, that Citi will reimburse you for the face value of
those certificates.

 Please tell us the basis for your statement that you expect most cardholders will redeem
the certificates for merchandise.  If you make a similar disclosure in future filings, please
disclose the basis for this belief including whether reward certificates were historically
redeemable for cash.

 Also tell us how you will account for certificates that are redeemed for cash.

Note 8 – Income Taxes, page 59

3. We note you changed your position in the fourth quarters of 2014 and 2015 regarding the
undistribut ed earnings of your Canadian ope rations  such that  a portion of the earnings
were no longer considered permanently reinvested.   Please tell us in significantly more
detail the facts and circumstances which led to the changes in your position and the
underly ing reasons for repatriating these earnings.  Further, tell us in detail how you
evaluated the criteria for the exception to recognition of a deferred tax liability in
accordance with ASC 740 -30-25-17 and 18 for the remaining Canadian undistributed
earning s that are intended to be indefinitely reinvested.   In this regard, d escribe the type
of evidence  that sufficiently demonstrates that remittance of  the remaining Canadian
earnings will be postponed indefinitely.   As part of your response, please quantify t he
amount of cumulative undistributed earnings from your Canadian operations for which
you have not provided for U.S. deferred taxes and quantify the amount of cash and cash
equivalents and short -term investments held by your Canadian operations.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and i ts management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

In responding to our comment s, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from  taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

Richard A. Galanti
Costco Wholesale Corporation
April 5, 2016
Page 3

 You may conta ct Robert Babula, Staff Accountant  at (202) -551-3339 , if you have
questions regarding the comment s on the financial statements and related matters.  Please contact
me at (202) 551 -3737 with any other questions.

Sincerely,

 /s/ Jennifer Thompson

Jennifer Thompson
Accounting Branch Chief
Office of Consumer Products

March 31, 2014

Via E -mail
Richard A. Galanti
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended September 1, 2013
Filed October 16, 2013
File No. 0 -20355

Dear Mr. Galanti :

We have completed our review of your filing .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are re sponsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

CORRESP

 Confidential treatment requested By Costco Wholesale Corporation

Portions of this document have been omitted pursuant to a request for confidential treatment under 17 C.F.R. § 200.83 and
have been marked with asterisks to indicate where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

Writer’s Direct Number: (425) 313-8203

Fax: (425) 313-6593

March 21, 2014

 BY EDGAR

James Allegretto

 Senior Assistant Chief Accountant

United States Securities and Exchange Commission

 Mail Stop 3561

 Washington, D.C. 20549

Re:
Costco Wholesale Corporation – Form 10-K for the Fiscal Year Ended September 1, 2013, filed October 16, 2013 – File No. 0-20355

 Dear Mr. Allegretto:

In response to your letter of March 10th (the “Letter”), please see the discussion below,
which corresponds to the numbered paragraphs in your letter. For the purpose of business confidentiality, the submission is accompanied by the Costco Wholesale Corporation’s request for confidential treatment of selected portions of this letter
pursuant to Rule 83, under the Freedom of Information Act, 17 C.F.R. § 200.83.

 Form 10-K for the Fiscal Year Ended September 1,
2013

 Results of Operations, page 19

Membership Fees, page 20

1.
We have read your response to comment 1 of our letter dated February 18, 2014, and your disclosure on page 21 where you state, “Executive Membership 2% reward program negatively impacted gross margin
by two basis points, due to increased spending by Executive Members.” Please show us how you calculated the two basis point margin effect related to the increased spending by the Executive Members. In this regard, we note on page 46 that
the incremental net reduction in sales for fiscal 2013 was $70 million. Please show us how such amount is utilized in the calculation of the basis effect on gross margin.

Response:

 We calculate the
basis point impact of our Executive Membership 2% reward program (reward program) as the difference between the ratio of the margin reduction for this program as a percentage of current year net sales compared to that same ratio in the prior year.
This impact is calculated using actual results prior to rounding as follows:

(Amounts in 000’s)

2013

2012

 Net sales

$
102,870,054

$
97,062,087

 Executive membership 2% reward impact on margin

970,425

899,858

 Ratio of reward program margin impact to net sales

.943
%

.927
%

 Difference in ratio year-over-year

.016
%

 Rounded basis point impact of reward program on gross margin as a percentage of net sales

2

basis points

 James Allegretto, Senior Assistant Chief Accountant

United States Securities and Exchange Commission

 March 21, 2014

 Selling, General and Administrative Expenses, page 22

2.
We have read your response to comment 3 of our letter dated February 18, 2014. Tell us and disclose the amounts recognized in the consolidated statements of income for the Co-Branded Agreement with Amex. Refer
to ASC 605-50-50-1. If not material, please quantify. For our understanding, please also explain the nature and calculation
of the rebates and other pay-for performance incentives you receive from Amex. As previously requested, please explain to us in detail your arrangement with American Express as it relates to the merchant discount fee structure.

 Response:

Under our Card Acceptance agreement with American Express (AMEX), we pay an [*]. Under our Co-Branded Card Program, AMEX remits to Costco a
rebate [*]. [*]1. [*] These amounts are recorded as bank fees within Selling, General and Administrative expense (SG&A).

Under our Co-Branded Card Program, which inaugurated in 2004, we receive [*]. We account for these amounts following the guidance in ASC
Subtopic 605-50, Revenue – Customer Payments and Incentives. [*]:

 Items recorded in SG&A:

•

[*] – [*]. [*].

•

[*] – [*]. [*].

 We disclosed in our 2013 Form 10-K, in our Selling, General and
Administrative Expenses policy, contained in Item 8, Financial Statements and Supplementary Data – Note 1 – Summary of Significant Accounting Policies, that bank charges are included in SG&A, as are many other items. We do not
disclose the absolute amounts of the various sub-components of SG&A, many of which are far larger than the AMEX charges [*], such as salaries, benefits, and workers’ compensation costs for warehouse employees. We do not believe those
absolute amounts are material to shareholders. We do, however, call out in MD&A changes, to the basis point, period over period in SG&A, with disclosure as to the sub-items that are the primary drivers of those changes.

1
We have arrangements with American Express in certain countries outside of the U.S. and Canada, but the amounts related to those arrangements are inconsequential as compared to the amounts discussed above.

*
Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions

 2

 James Allegretto, Senior Assistant Chief Accountant

United States Securities and Exchange Commission

 March 21, 2014

 Items Recorded in Net Sales:

•

[*] – [*]. [*]. [*]. [*]. [*].

•

[*] – [*]. [*]. [*].

•

[*] – [*]. [*].

 These amounts reported within net sales, separately and in the
aggregate, are clearly inconsequential on a standalone basis and as a component of net sales.

 Please contact me if you have any questions
or further comments.

Sincerely,

COSTCO WHOLESALE CORPORATION

/s/ Richard A. Galanti

 Richard A. Galanti

 Executive Vice President
and

 Chief Financial Officer

*
Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions

 3

March 10, 2014

Via E -mail
Richard A. Galanti
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended September 1, 2013
Filed October 16, 2013
Response dated March 3 , 2014
File No. 0 -20355

Dear Mr. Galanti :

We have reviewed your response dated March 3, 2014 and have the following additional
comments.  In some of our comments, we may ask you to provide us  with information so we
may better understand your disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing  and the information you provide in
response to these  comme nts, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended September 1, 2013

Results of Operations, page 19

Membership Fees, page 20

1. We have read your response to comment 1 of our letter dated February 18, 2014, and
your dis closure on page 21 where you state, “Executive Membership 2% reward program
negatively impacted gross margin by two basis points, due to increased spending by
Executive Members.”  Please show us how you calculated the two basis point margin
effect related to the increased spending by the Executive Members.  In this regard, we
note on page 46 that the incremental net reduction in sales for fiscal 2013 was $70
million.  Please show us how such amount is utilized in the calculation  of the basis effect
on gross  margin.

Richard A. Galanti
Costco Wholesale Corporation
March 10, 2014
Page 2

 Selling, General and Administrative Expenses, page 22

2. We have read your response to comment 3 of our letter dated February 18, 2014.  Tell us
and disclose the amounts recognized in the consolidated statements of income for the Co -
Branded Agree ment with Amex.  Refer to ASC 605 -50-50-1.  If not material, please
quantify.   For our understanding, please also explain the nature and calculation of the
rebates and other pay -for performance incentives you receive from Amex. As previously
requested, ple ase explain to us in detail your arrangement with American Express as it
relates to the merchant discount fee structure.

You may contact  Robert Babula, Staff Accountant,  at (202) 551 -3339 or me at (202) 551 -
3849  if you have questions regarding our comments or any other questions.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief Accountant

CORRESP
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		FY13 SEC Comment Letter (Second Response)

                                                                                                                        Writer’s Direct Number:  (425) 313-8203

                                                                                                                                                     Fax:  (425) 313-6593

March 3, 2014

BY EDGAR

James Allegretto

Senior Assistant Chief Accountant

United States Securities and Exchange Commission

Mail Stop 3561

Washington, D.C.  20549

Re:          Costco Wholesale Corporation -- Form 10-K for the Fiscal Year Ended September 1, 2013, filed

October 16, 2013 -- File No. 0-20355

Dear Mr. Allegretto:

In response to your letter of February 18, 2014 (the “Letter”), please see the discussion below, which corresponds to the numbered paragraphs in your letter.

Form 10-K for the Fiscal Year Ended September 1, 2013

Results of Operations, page 19

Membership Fees, page 20

1.

 We note your response to comment 1 of our letter dated January 22, 2014 as it relates to inclusion of the cost of the reward program in net sales.  Please quantify the rewards discount included in net sales in future discussion and analysis of net sales.

Response:

We disclosed in our 2013 Form 10-K the 2% executive rewards discount deducted from net sales in our Revenue Recognition policy, contained in Item 8, “Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies.” The reductions in sales for the 2% reward disclosed were $970 million, $900 million, and $790 million in 2013, 2012, and 2011, respectively, representing less than 1% of consolidated net sales. Because the changes in these amounts and the absolute amounts were immaterial to the analysis of net sales, they were not separately discussed in Management’s Discussion and Analysis. To the extent changes in these reductions were to be material to the overall change in sales in future periods, we will include commentary in our discussion and analysis of net sales.

2012 vs. 2011, page 21

2.

 We note your response to comment 2 of our letter dated January 22, 2014. In future filings, please elaborate to describe in further detail what you mean by investment in merchandise pricing.

Response:

In future filings, we will update our Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview section of our Form 10-Q and 10-K to the following effect as might be applicable:

Our investments in merchandise pricing 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.

James Allegretto, Senior Assistant Chief Accountant

United States Securities and Exchange Commission

March 3, 2014

Selling, General and Administrative Expenses, page 22

3.

 We note your response to comment 3 of our letter dated January 22, 2014 that a substantial portion of your SG&A is attributable to payroll and benefits for warehouse employees, credit card processing, bank charges and utilities.  While there may be some correlation between such items and the volume of sales, your relative discussion of SG&A fails to capture increases in SG&A that are not volume related such as salary and benefit increases for existing workforce and changes in non-warehouse employees, changes in other items of overhead, and fluctuations due to changes in energy prices. While your existing discussion of SG&A relative to sales is informative, we believe it would be more transparent to also discuss those items that do not exactly correlate with the volume of sales to the same extent as cost of sales. Please revise in future filings. With respect to your credit card processing and bank charges, please explain to us in detail your arrangement with American Express as it relates to the merchant discount fee structure. Please also advise whether Costco-issued AMEX cards that generate rewards are subject to the same merchant discount as non-proprietary cards and how the merchant discount is classified.  Please also tell us how the cash-back feature of these cards are recognized, measured and classified in your financial statements.

Response:

In our discussion and analysis, we focus on results as “seen through the eyes of those who manage [our] business.”1  As management, we analyze our selling, general, and administrative expense (SG&A) as a percentage of sales.  We believe that our historical SG&A discussion, which has followed this approach, has been transparent and informative.  Our disclosure (see examples below) includes both material components of SG&A in addition to unusual or non-recurring charges in the current period, which may only be one or two basis points as a percentage change in our net sales but we deem these charges important to discuss so that investors understand the overall changes in our SG&A costs.

Examples of these disclosures in our past filings include:

2014 vs. 2013

SG&A expenses as a percent of net sales increased seventeen basis points compared to the first quarter of 2013. Excluding the effect of gasoline price deflation on net sales, SG&A expenses increased seven basis points. This increase, driven by higher stock compensation expense of five basis points resulting primarily from appreciation in the trading price of the Company's common stock, occurred despite a 14% reduction in the average number of RSUs granted to each participant during the quarter.

2012 vs. 2011

SG&A expenses as a percent of net sales improved 17 basis points compared to 2011. Excluding the effect of gasoline price inflation, SG&A expenses improved nine basis points, primarily due to an eleven basis point improvement in our warehouse operating costs, largely payroll.  This improvement was partially offset by contributions to an initiative reforming alcohol beverage laws in Washington State and higher stock compensation expense, which had negative impacts of two basis points each. Higher costs related to the modernization of our information systems and related activities, which includes the re-platforming of our e-commerce sites, also adversely impacted our SG&A percentage.

2011 vs. 2010

SG&A expenses as a percent of net sales improved 31 basis points in 2011 compared to 2010. Excluding the effect of gasoline price inflation, SG&A expenses improved 11 basis points, primarily due to a 15 basis point improvement in our warehouse operating costs, largely payroll. This improvement was partially offset by a non-recurring benefit of $24, or three basis points, recorded in fiscal 2010 related to the refund of a previously recorded Canadian employee tax liability.

________________________________

1 Interpretation: Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations.  Securities and Exchange Commission.  17 CFR Parts 211, 231 and 241.  Release Nos. 33-8350; 34-48960; FR-72

2

James Allegretto, Senior Assistant Chief Accountant

United States Securities and Exchange Commission

March 3, 2014

In addition to being granular, these disclosures generally make self-evident whether the particular expense for which a change has been highlighted is one that would be expected to vary with sales.  As it happens, the changes highlighted recently have generally been of the type not varying substantially with the level of sales.  We believe further discussion in absolute dollar changes beyond what we have historically disclosed would not be beneficial to our investors nor provide them with meaningful information to further understand our results.

We have a Card Acceptance agreement with American Express (AMEX) for the acceptance of all AMEX branded cards, which would include the Costco co-branded AMEX card.  The contractual merchant discount rate applies to all AMEX cards accepted and the resulting fees are recorded in our SG&A.  In addition to the Card Acceptance agreement, we have a Co-Branded Card Program (Co-Branded Agreement) agreement with AMEX to issue the Costco co-branded card, to engage in joint promotional efforts, and to receive rebates and other pay-for performance incentives.  We account for the Co-Branded Agreement following the guidance in ASC Subtopic 605-50, Revenue- Customer Payments and Incentives.  Certain rebates and incentives are recorded as a reduction to SG&A, offsetting specific incremental expenses incurred by the Company; with the remainder accounted for as revenue and included in net sales, where we have determined that AMEX has received an identifiable benefit.

The reward earned by our members from use of the co-branded card is delivered to our members by AMEX in the form of a reward certificate. We accept these certificates as a form of payment from our members and receive reimbursement from AMEX for certificates redeemed.  There is no impact to our consolidated statements of operations for these rewards earned by members.  There is, therefore, no basis for discussing separately these issuances or redemptions in our financial statements.

Stock Repurchase Programs, page 49

4.

 We note your response to comment 6 of our letter dated January 22, 2014.  In future filings, please revise your stock repurchase program accounting policy footnote on page 49 to indicate how you allocate the cost of the repurchased shares to APIC and retained earnings.  In this regard, please disclose the method used, such as average cost or specific identification.  Refer to ASC 505-30-50-4 and ASC 235-10-50-3a.

Response:

In future filings, we will expand our stock repurchase program accounting policy disclosure to the following effect:

Repurchased shares of common stock are retired, in accordance with the Washington Business Corporation Act. The par value of repurchased shares is first deducted from common stock and the excess repurchase price over par value is then deducted by allocation to both additional paid-in capital and retained earnings. The amount allocated to additional paid-in-capital is calculated as the current value of additional paid-in-capital per share outstanding and is applied to the number of shares repurchased.  Any remaining amount is allocated to retained earnings.

Please contact me if you have any questions or further comments.

Sincerely,

COSTCO WHOLESALE CORPORATION

/s/ RICHARD A. GALANTI

Richard A. Galanti

Executive Vice President and

Chief Financial Officer

3

February 18, 2014

Via E -mail
Richard A. Galanti
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended  September 1, 2013
Filed October 16, 2013
Response dated February 4, 2014
File No. 0 -20355

Dear Mr. Galanti :

We have reviewed your response and have the following additional comments.  In some
of our comments, we may ask you to provide us with information so we may better understand
your disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not  believe our comments apply  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing  and the information you provide in
response to these  comments, w e may have  additional comments.

Form 10 -K for the Fiscal Year Ended September 1, 2013

Results of Operations, page 19

Membership Fees, page 20

1. We note your response to comment 1 of our letter dated January 22, 2014 as it relates to
inclusio n of the cost of the reward program in net sales.  Please quantify the rewards
discount included in net sales in future discussion and analysis of net sales.

2012 vs. 2011, page 21

2. We note your response to comment 2  of our letter dated January 22, 2014 .  In future
filings,  please elaborate to describe in further detail what you mean by investment in
merchandise pricing.

Richard A. Galanti
Costco Wholesale Corporation
February 18, 2014
Page 2

 Selling, General and Administrative Expenses, page 22

3. We note your response to comment 3 of our letter dated January 22, 2014 that a
substantial portion of your SG&A is attributable to payroll and benefits for warehouse
employees, credit card processing, bank charges and utilities. While there may be some
correlation between such items and the volume of sales, your relative discussion of
SG&A fails to capture increases in SG&A that are not volume related such as salary and
benefit increases for existing workforce and changes in non -warehouse employees,
changes in other items of overhead, and fluctuations due to changes in energy prices.
While your existing discussion of SG&A relative to sales is informative, we believe it
would be more transparent  to also discuss those items that do not exactly correlate with
the volume of sales to the same extent  as cost of sales.  Please revise in fut ure filings.
With respect to your credit card processing and bank charges, please explain to us in
detail your arrangement with American Express as it relates to the merchant discount fee
structure.  Pl ease also advise whether Costco -issued AMEX cards tha t generate rewards
are subject to the same merchant discount  as non -proprietary cards  and how  the merchant
discount is classified.  Please also tell us how  the cash -back feature of these cards are
recognized , measured  and classified in your financial statements.

Stock Repurchase Programs, page 49

4. We note your response to comment 6 of our letter dated January 22, 2014.  In future
filings, please revise your stock repurchase program accounting policy footnote on page
49 to indicate how you allocate the cost of the repurchased shares to APIC and retai ned
earnings.  In this regard, please disclose the method used, such as average cost or specific
identification.   Refer to ASC 505 -30-50-4 and ASC 235 -10-50-3a.

You may contact  Robert Babula, Staff Accountant,  at (202) 551 -3339 or me at (202) 551 -
3849  if you have questions regarding our comments or any other questions.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

		2013 SEC Comment Letter (Initial Response)

Writer’s Direct Number:  (425) 313-8203

Fax:  (425) 313-6593

February 4, 2014

BY EDGAR

James Allegretto

Senior Assistant Chief Accountant

United States Securities and Exchange Commission

Mail Stop 3561

Washington, D.C.  20549

Re:

 Costco Wholesale Corporation -- Form 10-K for the Fiscal Year Ended September 1, 2013, filed October 16, 2013 -- File No. 0-20355

Dear Mr. Allegretto:

In response to your letter of January 22 (the “Letter”), please see the discussion below, which corresponds to the numbered paragraphs in your letter.

Form 10-K for the Fiscal Year Ended September 1, 2013

Results of Operations, page 19

Membership Fees, page 20

1.

 Tell us what consideration you gave to disclosing your member renewal rates by class of membership and discussing the fees from executive memberships with the related amount of executive reward incurred in MD&A. In this regard, tell us why you offset executive reward rebates with sales as opposed to membership fees. If you don’t believe such an analysis of membership fees would be useful to your investors, please explain in detail. Given that membership fees fluctuations flow directly to pre-tax net income, please also ensure you discuss membership fee revenue changes between fee increases and changes in the volume of memberships. Lastly, explain to us how you calculate your membership renewal rates. In this regard, we read your disclosure on page 6 which states, “[T]he renewal rate is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date.” Explain to us why the renewals are being captured over a period of up to eighteen months prior to the reporting date. An example illustrating the calculation may be beneficial to our understanding.

Response:

Our membership renewal rates are not materially different between our two types of memberships, Goldstar and Business, which include Executive upgrades. Our worldwide renewal rate of 86% as disclosed in our 2013 Form 10-K was comprised of Business and Goldstar renewal rates of 90% and 85%, respectively. Therefore, we do not believe it would be meaningful to investors to disclose them separately.

We evaluate the 2% executive reward program (Program) based upon the guidance in Accounting Standards Codification (ASC) Topic 605-25, Revenue Recognition - Multiple-Element Arrangements. It states that “arrangement consideration shall be allocated among the separate units of accounting.” We have concluded that the Program represents an arrangement that includes the right to earn a 2% reward, up to an annual maximum reward amount, from making qualifying purchases at Costco.  The amounts earned under the Program by Costco executive members making qualifying purchases are not based on the annual executive membership fee, the reward that can be earned can be many multiples of the underlying annual membership fee.  Although the executive membership gives the member the opportunity to earn a reward under the Program, the reward itself is only earned

James Allegretto, Senior Assistant Chief Accountant

United States Securities and Exchange Commission

February 4, 2014

if the member makes qualifying purchases at Costco.  Furthermore, the executive membership does not need to be renewed in order to redeem any rewards previously earned under the Program.  We have therefore concluded that the separate units of accounting inherent in the Program include the initial qualifying merchandise purchase generating a reward, deemed to be the delivered item, and the earned reward, the undelivered item.  The consideration received from the qualifying merchandise purchase (i.e. sale) generating the reward is allocated between the two units of account, the sale and the reward, for the purposes of revenue recognition.  Since rewards earned impact sales and therefore gross margin, as disclosed in our 2013 Form 10-K, and management reviews the impact of this Program relative to gross margin, we discuss the financial impact of this Program in conjunction with our gross margin analysis.

We believe that we have discussed the impact of fee increases and changes in the volume of memberships.  We disclosed in our 2013 Form 10-K that the increase in membership fee revenue was primarily due to raising our annual membership fees (which occurred in November 2011 and January 2012 for new members and renewals, respectively) and membership sign-ups at both existing and new warehouses.  We further disclosed that the fee increases had a positive impact on membership fee revenues of approximately $119 million in 2013. The remainder of the revenue increase is primarily related to increases in volume of new members. In addition, we disclosed that the remaining impact of increasing the membership fee will be immaterial to our 2014 results to inform the reader that the impact in future reporting periods would be significantly different than the current reporting period.

We calculate our membership renewal rate using a trailing calculation as disclosed in our 2013 Form 10-K.  Based on historical data, we have determined that of the members who renew their annual Costco membership, nearly all do so within six months of the expiration date. As such, measuring renewals only at the point of expiration would not provide investors an accurate picture of our renewal activity.  Our calculation is designed to capture and quantify the percentage of those memberships that have had a full six months to renew. By using memberships expiring seven to eighteen months prior to the reporting date, we are able to capture a full annual membership cycle. Memberships that have an expiration date in the six months prior to the end of our reporting period are excluded from this calculation, regardless of whether or not they have been renewed.

For example, our renewal rate calculation as of September 1, 2013 included all memberships that had expired between March 2012 and February 2013.  These represented the base (i.e. denominator) of memberships used to evaluate the renewal rate.  Using that same membership base, to the extent the membership has been renewed as of the most recent month-end prior to the reporting date, it is included in the renewal count used as the numerator.  This calculation yields the reported renewal rate. We believe our methodology is the most effective method for measuring our membership renewal rate.  More importantly, it has been consistent in our reports, allowing investors to make accurate comparisons period over period.

2012 vs. 2011, page 21

2.

 Please tell us what is meant when you cite “investment in merchandise pricing” as the reason for the decrease in gross margin. If this represents price discounting, you should make that clear in future similar situations.

Response:

This phrase means 1) reducing prices on key items to drive sales and 2) holding prices steady in an environment of cost increases instead of passing the increases on to our members.  Accordingly, it would not be accurate to use the phrase “price discounting,” in addition to the fact that in some sense “price discounting” is what our entire business is about.

 Selling, General and Administrative Expenses, page 22

3.

 You state in your overview that “The higher our comparable sales exclusive of currency fluctuations, the more we can leverage certain of our selling, general and administrative expenses, reducing them as a percentage of sales and enhancing profitability.” Please discuss SG&A in MD&A on an absolute basis in addition to relative to sales.

2

James Allegretto, Senior Assistant Chief Accountant

United States Securities and Exchange Commission

February 4, 2014

Response:

A substantial portion of our selling, general, and administrative expense (SG&A) is attributable to payroll and benefits for our warehouse employees, credit card processing and bank charges, and utilities, which are largely variable and correlate to sales.  We believe that a discussion of the absolute dollar changes in these expenses is not meaningful without reference to the underlying change in sales.  By discussing deviations in these expenses relative to sales we are able to provide a clear and straightforward disclosure of the reason for such changes.

To the extent that there are material changes in our SG&A expenses that generally do not vary with sales, the most significant of which are depreciation and stock-based compensation, we have historically described the impact of those changes.  For example, we disclosed the negative impact of increases in stock compensation expense and higher central operating costs predominantly related to the modernization of our information systems.

We believe our discussion of SG&A as a percentage of sales provides a meaningful discussion which enables investors to understand our results.  We believe any further discussion of the absolute dollar changes beyond what we have historically disclosed would result in duplicative information and would not promote further understanding of our results.

 Consolidated Statements of Comprehensive Income, page 38

4.

 Please refer to your foreign currency translation adjustment and other, net line item. Please provide the disclosure required by ASC 220-10-45-12 in future filings or tell us why you believe such information is not required.

Response:

We considered the disclosure required by ASC 220-10-45-12 and determined the amounts potentially requiring disclosure to be immaterial, approximately $2.0 million, and are expected to be immaterial in future periods.

Revenue Recognition, page 46

5.

 You state in your description of business that “In keeping with our policy of member satisfaction, we generally accept returns of merchandise.” You further disclose in your financial statements that sales returns are net of the estimated net realizable value of merchandise inventories to be returned and any estimated disposition costs. Given your liberal return policy, please advise how value is realized from merchandise returned including whether you are able to pass on the costs of returns back to specific suppliers. Please also quantify the amount of sales returns netted against sales for the past 3 years and explain the reason for the 10% increase in the sales return reserve. Finally, tell us whether sales are reduced by amount of the estimated gross sales returns or the margin effect of such sales. We may have further comment.

Response:

There are three ways that value is realized from merchandise that is returned. The first is that many returned items are still saleable. For these items, we realize value by returning the product to inventory, and then selling the product again to our members. Second, certain inventory can be returned to the vendor that initially sold us the product. Many of our vendor agreements allow for returned items to be returned to the vendor for a full refund of our purchase price. The remainder of returns are disposed of. When possible, we sell these items to salvager companies, and recoup some portion of the initial cost of the items.

All merchandise returns reduce net sales at the time merchandise is returned.   In addition, we reduce net sales by the gross amount of the estimated future merchandise returns on sales recognized through the end of the reporting period.  At the end of fiscal years 2011, 2012, and 2013, the amounts netted against sales for expected future returns were $418 million, $467 million, and $493 million, respectively. The sales return reserve approximates the gross margin related to the expected future merchandise to be returned in addition to an estimate of disposition costs for merchandise that will be disposed of or salvaged.

The 10% increase in the sales returns reserve between fiscal 2012 and 2013 was primarily driven by the 6% increase

3

James Allegretto, Senior Assistant Chief Accountant

United States Securities and Exchange Commission

February 4, 2014

in net sales. In addition, our estimate of the percentage of returned merchandise to be disposed of or salvaged increased based on historical experience.

Stock Repurchase Programs, page 49

6.

 Please disclose the cost flow assumption by which shares repurchased are deducted from additional paid-in capital and returned earnings.

Response:

Repurchases of our common stock are made at market value as of the repurchase date. In accordance with ASC 505-30-30-8, the excess of the repurchase price over par value is allocated between additional paid-in capital and retained earnings. The amount allocated to additional paid-in-capital is based on the estimated price at which the shares had been sold, representing the total shares outstanding and the current value of additional paid-in-capital.  The remaining amount is recorded to retained earnings. We believe we have made all the disclosures required under ASC 505-30-50.

Note 12 - Segment Reporting, page 62

7.

 You disclose your business is classified by management into three reporting segments.  Further, we note your 2014 first quarter earnings transcript where you state, “[I]n terms of sales comparisons geographically, for the first quarter, the better performing regions in the U.S. were in the Southeast, Midwest, and Texas. Internationally, in local currencies, the better performing countries were Canada, Mexico, and Australia.” Please provide us with your analysis under ASC 280 that supported disclosing all operations as three reportable segments.

Please include the following information in your response:

•

 the operating segments you have identified in accordance with ASC 280-10-50-1 through 50-9,

•

 if applicable, the basis for aggregating identified operating segments into three reportable segments given the aggregation criteria in ASC 280-10-50-11 and quantitative thresholds in ASC 280-10-50-12.

•

 how the aggregation of all of your operations into three reportable segments complies with the aggregation criteria, and

•

 the process through which your chief operating decision maker reviews information to make decisions about resources to be allocated to your segments and assess their performance.

Response:

Our business model as described in our 2013 Form 10-K is consistently applied in each country in which we operate.  Within the U.S., we have eight regions that are consolidated into three U.S. divisions, each with an Executive Vice President (EVP) who reports directly to our President and CEO, who we have determined to be our chief operating decision maker (CODM).  We have two regions in Canada that consolidate into the Canadian division, which is managed by an EVP that reports directly to our CODM.  Finally, each of the other countries in which we operate is managed by a separate country manager who reports to an EVP that reports directly to our CODM. Each of these other countries represents a separate division. The EVP’s managing our divisions, along with the other country managers, execute our corporate strategy as determined by our CODM.  On a periodic basis, separate financial results for each division in the U.S., Canada, and in our other international divisions are provided to our CODM for purposes of assessing each division’s performance.

The use of three divisions for our U.S. operations allows for an efficient execution of the decisions and objectives of the CODM. The regional structure allows for more effective operational management, ensuring that our warehouses are given the appropriate support. Investment decisions are not made by region. Instead, investment decisions are made by our CODM regardless of region. For example, the decision to open a warehouse is made based upon a number of factors which include the availability of real estate (regardless of division, region or country) and projected rates of return regardless of location. Based upon the guidance in ASC 280-10-5-1 through

January 22, 2014

Via E -mail
Richard A. Galanti
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended September 1, 2013
Filed October 16, 2013
File No. 0 -20355

Dear Mr. Galanti :

We have reviewed your filing and have the following comments.  We have limited our
review to only your financial statements and related disclosures and do not intend to expand our
review to ot her portions of your documents.  In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your respons e.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended September 1, 2013

Results of Operations, page 19

Membership Fees, page 20

1. Tell us what consideration you gave to disclosing your member renew al rates by class of
membership and discussing the fees from executive memberships with the related amount
of executive reward incurred in MD&A.  In this regard, tell us why y ou offset executive
reward  rebates  with sales as opposed to membership fees. If you don’t believe such an
analysis of  membership fees  would be useful to your investors , please explain in detail .
Given that membership fees  fluctuations  flow directly to  pre-tax net income, pl ease also
ensure you discuss membership fee revenue changes between fee increases and changes
in the volume of memberships.   Lastly, explain to  us how you calculate your membership
renewal rates.  In this regard, we read your disclosure on page 6 which sta tes, “[T]he

Richard A. Galanti
Costco Wholesale Corporation
January 22, 2014
Page 2

 renewal rate is a trailing calculation that captures renewals during the period seven to
eighteen months prior to the reporting date.”  Explain to us why the renewals are being
captured over a period of up to eighteen months prior to the report ing date.  An example
illustrating the calculation may be beneficial to our understanding.

2012 vs. 2011, page 21

2. Please tell us what is meant when you cite “investment in merchandise pricing” as the
reason for the decrease in gross margin.  If this re presents price discounting, you should
make that clear in future similar situations.

Selling, General and Administrative Expenses, page 22

3. You state in your overview that “The higher our comparable sales exclusive of currency
fluctuations, the more we can leverage certain of our selling, general and administrative
expenses, reducing them as a percentage of sales and enhancing profitability.”  Please
discuss SG&A in MD&A on an absolute basis in addition to relative to sales.

Consolidated Statements of Comprehensive Income, page 38

4. Please refer to your foreign currency translation adjustment and other, net line item.
Please provide the disc losure required by ASC 220 -10-45-12 in future filings or tell us
why you believe such information is not required.

Revenue Recognition, page 46

5. You state in your description of business that “In keeping with our policy of member
satisfaction, we genera lly accept returns of merchandise.”  You further disclose in your
financial statements  that sales returns are net of the estimated net realizable value of
merchandise inventories to be returned and any estimated disposition costs. Given your
liberal return  policy, please advise how value is realized from merchandise returned
including whether you are able to pass on the costs of returns back to specific suppliers.
Please also quantify the amount of sales returns netted against sales for the past 3 years
and explain the reason for the 10% increase in the sales return reserve.  Finally, tell us
whether sales are reduced by amount of the estimated gross sales returns or the margin
effect of such sales.  We may have further comment.

Stock Repurchase Progra ms, page 49

6. Please disclose the cost flow assumption by which shares repurchased are deducted from
additional paid -in capital and returned earnings.

Richard A. Galanti
Costco Wholesale Corporation
January 22, 2014
Page 3

 Note 12 – Segment Reporting, page 62

7. You disclose your business is classified by management into thr ee reporting segments.
Further, we note your 2014 first quarter earnings transcript where you state , “[I]n terms
of sales comparisons geographically, for the first quarter, the better performing regions in
the U.S. were in the Southeast, Midwest, and Texa s. Internationally, in local currencies,
the better performing countries were Canada, Mexico, and Australia.”  Please provide us
with your analysis under ASC 280 that supported disclosing all operations as three
reportable segments.

Please include the following information in your response:

 the operating segments you have identified in accordance with ASC 280 -
10-50-1 through 50 -9,
 if applicable, the  basis for aggregating identified operating segments into three
reportable segments given the aggregation criteria in ASC 280 -10-50-11 and
quantitative thresholds in ASC 280 -10-50-12.
 how the aggregation of  all of your operations into three  reportable segm ents complies
with the aggregation criteria, and
 the process through which your chief operating decision maker reviews information
to make decisions about resources to be allocated to your segments and assess their
performance.

We urge all persons who are  responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

Richard A. Galanti
Costco Wholesale Corporation
January 22, 2014
Page 4

 You may contact  Robert Babula , Staff Accountant , at (202) 551 -3339  or me at (202) 55 1-
3849  if you have questions regarding our comments or any other questions.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief  Accountant

June 14, 2012

Via E -mail
Richard A. Galanti
Executive Vice President, Chief Financial Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027

Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 28, 2011
Filed October 14, 2011
File No. 0 -20355

Dear Mr. Galanti :

We have completed our review of your filing. We remind you that our comments or
changes  to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any pers on under the
federal securities laws of the United States. We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Andrew D. Mew

Andrew D. Mew
Accounting Branch Chief

CORRESP
1
filename1.htm

Correspondence

 Writer’s Direct Number: (425) 313-8203

Fax: (425) 313-6593

 June 8, 2012

 BY EDGAR

 Andrew D. Mew

 Accounting Branch Chief

 United
States Securities and Exchange Commission

 Division of Corporation Finance

 Washington, D.C. 20549

 Re:

Costco Wholesale Corp.—Form 10-K for the Fiscal Year Ended August 28, 2011, filed October 14, 2011. Response dated May 18, 2012—File No.
0-20355

 Dear Mr. Mew:

 In response to your letter of May 25, 2012 (the “Letter”), please see the discussion below, which corresponds to the numbered paragraph in your letter.

Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21

 Results of Operations, page 22

1.
We read your response to comment 1. We note you tracked merchandise inventory and the related cost of sales primarily using the first-in, first-out (FIFO) method,
and that you account for your US merchandise inventory on a last-in, first-out (LIFO) basis for financial reporting purposes by recording LIFO adjustments in an inflationary cost environment. In this regard, advise us how you compute the LIFO
adjustments in light of the different LIFO pools you have to maintain for LIFO inventory basis, but not for FIFO inventory basis. Provide us an example in your response to show how this process works. Further, please explain to us in detail how FIFO
costs are representative of market, especially in a deflationary environment where LIFO inventory cost would be higher than the FIFO inventory cost. In this regard, please clarify for us why you believe FIFO approximates market in a deflationary
environment in the lower of cost or market test in your situation. Please note that market, as defined in ASC 330-10-20, means current replacement cost provided it shall not exceed net realizable value and it shall not be less than net realizable
value reduced by allowance for an approximately normal profit margin. Please explain.

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 June 8, 2012

 Response:

 Advise us how you compute the LIFO adjustments in light of the different LIFO pools you have to maintain for LIFO inventory basis, but not for FIFO inventory basis.

We apply the “dollar value” method to valuing LIFO inventories. Under the dollar value method, inventory items are grouped by
“pools” and are priced in terms of each pool’s aggregate base year cost. The result is compared with each pool’s aggregate base year cost as of the end of the prior year to determine whether the inventory level of each LIFO pool
has increased or whether a portion (layer) of the inventory has been liquidated. We use the link chain computational technique in which the base year cost of ending inventory is determined by applying a cumulative index to the dollar value of the
ending inventory. The cumulative index is the relationship of the latest current year prices to those of the prior year based on double extension at the item level (“annual inflator/deflator percentage”) multiplied by the prior year’s
cumulative index, causing each year’s index to be characterized as a link in a chain of indexes back to the base year. The number of pools and use of the dollar value approach using the link chain computation technique have not changed since we
first adopted LIFO for financial reporting purposes in 1989.

 Provide us an example in your response to show how this process works.

 The following example demonstrates how this process works. The numbers presented are for illustrative purposes only.

 The annual inflator/deflator percentage is derived by comparing the latest cost of each item in ending inventory to the cost
of the same item at the end of the previous fiscal year; or, if a new item has been added, the cost when the first purchase occurred. The cost of all items in each pool is multiplied by the quantity in ending inventory and then totaled and used to
compute the current-year inflator/deflator percentage. Please note that each item’s cost is used for purposes of this calculation, which may differ from our FIFO cost calculation using the Retail Inventory Method (RIM), the method primarily
used to value our merchandise inventory.

 The following example demonstrates how the annual inflator/deflator is calculated.

POOL 1

 Total Cost of Items:

 Current year ending inventory valued at prior year cost

$
317,850,467

 Current year ending inventory valued at current year cost

340,100,000

 Percent Change

7.00
%

 Annual Inflator Pool 1

107.000
%

 This annual inflator/deflator is then multiplied by the prior-year cumulative LIFO index (“link
chain”) to develop a current-year cumulative index.

POOL 1

 Annual
Inflatdor/

Deflator

Cumulative
Inflator

 2007

118.000%

 2008

106.000%

125.080%

 2009

98.000%

125.578%

 2010

102.000%

125.030%

 2011

107.000%

133.782%

 2

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 June 8, 2012

 Current year ending inventory at current year cost using FIFO
RIM is then divided by the current-year cumulative inflator index to determine current-year ending inventory at base-year costs. This value is compared to the prior-year ending inventory at base-year costs to calculate the current year increment.
The current year increment is then multiplied by the current year cumulative inflator index to calculate the current year LIFO increment, which is then added to the prior year ending inventory at LIFO to derive the current-year ending inventory at
LIFO. This balance is then compared to the current year ending inventory at current year cost, primarily using FIFO RIM, to calculate the LIFO reserve amount. The example below illustrates this calculation.

Pool 1

 Current Year Ending Inventory at Current Year Cost (FIFO RIM*)

$
340,100,000

 Current Year Cumulative Inflator Index

133.782
%

 Current Year Ending Inventory at Base Year Cost

254,219,551

 Prior Year Ending Inventory at Base Year Cost

244,616,492

 Current Year Increment at Base Year Cost

$
9,603,059

 Increment Calculation

 Current Year Increment at Base Year Cost

$
9,603,059

 Current Year Cumulative Inflator Index

133.782
%

 Current Year LIFO Increment

12,847,164

 Prior Year Ending Inventory At LIFO

314,208,843

 Current Year Ending Inventory At LIFO

$
327,056,007

 LIFO Adjustment Calculation

 Current Year Ending Inventory at Current Year Cost (FIFO RIM*)

$
340,100,000

 Current Year Ending Inventory At LIFO

327,056,007

 LIFO Reserve

$
(13,043,993
)

*
primarily

 The resulting LIFO
reserve amount for our pools is combined to determine the required LIFO adjustment. We believe that our business model creates an integrated product relationship among all inventory items such that they are not significantly dissimilar and that
combining our pools to determine the required LIFO adjustment most clearly reflects our periodic income as required by ASC 330-10-30-9.

Please explain to us in detail how FIFO costs are representative of market, especially in a deflationary environment where LIFO inventory cost would
be higher than the FIFO inventory cost.

 We consider our FIFO inventory costs to be representative of market for the
following reasons:

•

 Our information systems account for the value of most of our inventory using FIFO RIM. RIM is used by many retailers for approximating the cost basis
of inventory, based on current market retail prices of inventory. Cost valuation is determined by multiplying the retail value of inventory by the cost-to-retail ratio to arrive at inventory at cost. Because RIM is based on the retail value of the
ending inventory, it automatically generates a lower of cost or market value, as our markdowns to the retail price of inventory are taken on a timely basis.

•

 We record any markdowns or losses for obsolescence or discontinued products at the item level on a timely basis, consistent with the guidance of ASC
330-10-35-7. Under RIM, when a markdown is taken, the full markdown for all on-hand inventory is recorded immediately at the time of the markdown.

 3

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 June 8, 2012

•

 Our inventory generally turns over rapidly; the overall average turnover for U.S. inventory is approximately 12 times per year.

•

 We do not experience a high degree of markdowns to the retail price of inventory or other losses for obsolete or discontinued products, due to our high
turnover and our merchandising philosophy of “early in, early out” on seasonal merchandise.

 Please clarify for
us why you believe FIFO approximates market in a deflationary environment in the lower of cost or market test in your situation.

 As described above FIFO RIM results in inventories being valued at the lower of FIFO cost or market. If the LIFO value for inventories is greater than its FIFO value, inventories are recorded at the FIFO
value.

 Based on the foregoing, we believe our computation of LIFO inventory and our policy for evaluating the lower of cost or market rule
are reasonable and consistent with generally accepted accounting principles in the United States.

 Please contact me if you have any questions
or further comments.

Sincerely,

COSTCO WHOLESALE CORPORATION

/s/ Richard A. Galanti

 Richard A. Galanti

Executive Vice President and

 Chief Financial
Officer

 4

May 25, 2012
 Via E-mail

Richard A. Galanti  Executive Vice President, Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027
Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 28, 2011
Filed October 14, 2011 Response dated May 18, 2012 File No. 0-20355

Dear Mr. Galanti:
 We have reviewed your response and have th e following additional comment.  In our
comment, we may ask you to provide us with information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comment applies to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to this comment, we may have additional comments.               Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7—Management’s Discussion and Analysis  of Financial Condition and Results of
Operations, page 21
Results of Operations, page 22

1. We read your response to comment 1.  We note you tracked merchandise inventory and
the related cost of sales primarily using the first-in, first-out (FIF O) method, and that you
account for your US merchandise inventory on a last-in, first-out (LIFO) basis for
financial reporting purposes by recording LI FO adjustments in an inflationary cost
environment.   In this regard, advise us how you compute the LIFO adjustments in light
of the different LIFO pools you have to mainta in for LIFO inventor y basis, but not for
FIFO inventory basis. Provide us an example in your response to show how this process

Richard A. Galanti Costco Wholesale Corporation  May 25, 2012 Page 2

 works. Further, please explain to us in de tail how FIFO costs ar e representative of
market, especially in a deflationary envir onment where LIFO inventory cost would be
higher than the FIFO inventory cost.  In this  regard, please clarify for us why you believe
FIFO approximates market in a deflationary en vironment in the lower of cost or market
test in your situation. Pleas e note that market, as defi ned in ASC 330-10-20, means
current replacement cost provided it shall not exceed net realizable value and it shall not be less than net realizable value reduced by allowance for an approximately normal profit
margin. Please explain.

You may contact Robert Babul a, Staff Accountant, at ( 202) 551-3339 or me at (202) 551-
3377 if you have questions regarding our  comment or any other questions.

Sincerely,
    /s/ Andrew D. Mew
 Andrew D. Mew Accounting Branch Chief

CORRESP
1
filename1.htm

Correspondence

 Writer’s Direct Number: (425) 313-8203

Fax: (425) 313-6593

 May 18, 2012

 BY EDGAR

 Andrew D. Mew

 Accounting Branch Chief

 United
States Securities and Exchange Commission

 Division of Corporation Finance

 Washington, D.C. 20549

Re:
Costco Wholesale Corp. – Form 10-K for the Fiscal Year Ended August 28, 2011, filed October 14, 2011. Response dated March 22, 2012 – File No. 0-20355

 Dear Mr. Mew:

 In
response to your letter of April 12, 2012 (the “Letter”), please see the discussion below, which corresponds to the numbered paragraph in your letter. We apologize for the delay in responding to your letter.

Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21

 Results of Operations, page 22

1.
We note your response to comment 2 and your discussion of significant LIFO adjustments at each period end to reflect the inflationary and deflationary trends in
explaining the change in gross profit margins. We also note from Note 1 on page 52 that you applied LIFO inventory in accounting for the US inventories and that you adjusted LIFO inventory to give effect to inflation or deflation at each period end.
In that regard, please explain to us in further detail how the adjustments work by providing us an example along with the journal entries in recording them. Also, the adjustments appear to write up your LIFO inventory to FIFO basis in an
inflationary cost environment. If so, explain to us why it is appropriate to do so under US GAAP.

 Response:

Our information systems account for our merchandise inventory and the related cost of sales primarily using the first-in, first-out (FIFO) method.
Separately, we perform a calculation of the value of substantially all of our U.S. merchandise inventory using the last-in, first-out (LIFO) method. If the LIFO value of these inventories is lower than its FIFO value (as in a merchandise
inflationary period), an adjustment is made to record the inventories at LIFO. If the LIFO value for these inventories is greater than its FIFO value, after considering the lower of cost or market principle, the inventories are recorded at the FIFO
value.

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 May 18, 2012

 At the end of fiscal 2010, as disclosed in our annual report on Form 10-K, U.S. merchandise inventories
valued at LIFO approximated FIFO after considering the lower of cost or market principle; thus there was no LIFO adjustment and these inventories were recorded at their FIFO value. At the end of fiscal 2011, an inflationary year, our inventory
values at LIFO were less than the FIFO values, resulting in a LIFO inventory charge of $87 million.

 The following table displays the value of
our U.S. merchandise inventory at the end of fiscal 2011 using the FIFO method, and the difference resulting from applying the LIFO method to substantially all of these inventories. The necessary adjustment for the fiscal 2011 year ended August 28,
2011 was calculated as follows:

2011
(in millions)

 US Merchandise Inventories valued at FIFO

$
4,635

 US Merchandise Inventories valued at LIFO

4,548

 Difference

$
(87
)

 When we refer to a LIFO adjustment, we are describing the adjustment necessary to reflect substantially all of our U.S.
merchandise inventory at LIFO from FIFO. The journal entry that was recorded is as follows (in millions):

 Merchandise Costs (Cost of Goods Sold)

$
87

 US Merchandise Inventories (LIFO Reserve)

($
87
)

 By recording this adjustment in an inflationary environment, we are adjusting the value of substantially all of our U.S.
merchandise inventory valued at FIFO to reflect the valuation using LIFO. We do not believe there is any question that this approach is appropriate under GAAP.

 Please contact me if you have any questions or further comments.

Sincerely,

COSTCO WHOLESALE CORPORATION

 /s/ Richard A. Galanti

 Richard A. Galanti

Executive Vice President and

Chief Financial Officer

 2

April 12, 2012
 Via E-mail

Richard A. Galanti  Executive Vice President, Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027
Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 28, 2011
Filed October 14, 2011 Response dated March 22, 2012 File No. 0-20355

Dear Mr. Galanti:
 We have reviewed your response and have th e following additional comment.  In our
comment, we may ask you to provide us with information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comment applies to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to this comment, we may have additional comments.               Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7—Management’s Discussion and Analysis  of Financial Condition and Results of
Operations, page 21
Results of Operations, page 22

1. We note your response to comment 2 a nd your discussion of significant LIFO
adjustments at each period end to reflect th e inflationary and deflationary trends in
explaining the change in gross profit margins.  We also note from Note 1 on page 52 that
you applied LIFO inventory in accounting for the US inventories and that you adjusted
LIFO inventory to give effect to inflation or  deflation at each period end.  In that regard,
please explain to us in further detail how the adjustments work by providing us an
example along with the journal en tries in recording them. Als o, the adjustments appear to

Richard A. Galanti Costco Wholesale Corporation  April 12, 2012 Page 2

 write up your LIFO inventory to FIFO basis in an inflationary cost environment. If so,
explain to us why it is appropr iate to do so under US GAAP.

You may contact Robert Babul a, Staff Accountant, at ( 202) 551-3339 or me at (202) 551-
3377 if you have questions regarding our  comment or any other questions.

Sincerely,
    /s/ Andrew D. Mew
 Andrew D. Mew Accounting Branch Chief

CORRESP
1
filename1.htm

Correspondence

 Writer’s Direct Number: (425) 313-8203

Fax: (425) 313-6593

March 22, 2012

 BY EDGAR

 Andrew D. Mew

 Accounting
Branch Chief

 United States Securities and Exchange Commission

 Division of Corporation Finance

 Washington, D.C. 20549

Re:
Costco Wholesale Corp. — Form 10-K for the Fiscal Year Ended August 28, 2011, filed October 14, 2011. Response dated February 29, 2012 — File
No. 0-20355

 Dear Mr. Mew:

 In response to your letter of March 8, 2012 (the “Letter”), please see the discussion below, which corresponds to the numbered paragraphs in your letter.

Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21

 Results of Operations, page 22

1.
We note your response to our prior comment 1, and continue to believe that you should provide a separate operating results’ discussion for your Canadian
operations so investors can better understand and evaluate the performance of your business. Further, we note your assertion that your Canadian operations, among all your operations are the most similar to your United States operations. However, it
appears the Canadian operations are economically dissimilar to the United States operations. We note from the segment footnote that since fiscal 2009 the Canadian operations have produced significantly higher revenue and operating income
growth as compared to the United States operations. In this regard, we remain uncertain how your results’ of operations discussion adequately explains the significant growth behind your Canadian operations. Accordingly, we continue to believe
you should revise to address your Canadian operations separately from your United States operations in future filings.

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 22, 2012

 Response:

 We note your comment above that since fiscal 2009, based upon the information disclosed in our segment footnote on page 80 of our fiscal 2011 Form 10-K, the Canadian operations have produced
significantly higher revenue and operating income growth as compared to the U.S. operations. The primary factor driving the disparate growth in our Canadian operations as compared to our U.S. operations was the effect of changes in the
Canadian dollar relative to the U.S. dollar year-over-year.

 Excluding the effect of changes in the Canadian dollar relative to
the U.S. dollar, fiscal 2011’s total revenue and operating income growth versus fiscal 2010 in the U.S. and Canada were as follows:

U.S.

Canada

 Total revenue growth

9
%

10
%

 Operating income growth

7
%

7
%

 Comparable sales growth (local currency)

7
%

8
%

 Throughout our 2011 MD&A, pages 22 through 25, we refer to the impact of changes in foreign currencies
relative to the U.S. dollar, which are references to the differences between the foreign-exchange rates we use to convert our international operations’ financial results from local currencies into U.S. dollars for financial reporting purposes.
This impact of foreign-exchange rate fluctuations is typically calculated as the difference between the current period’s currency exchange rates and the comparable prior-year period’s currency exchange rates.

While we disclose the total impact of foreign currencies on our consolidated results, we do not disclose the impact by individual
operating segments. For example, on pages 23 and 24, we state that foreign currencies strengthened against the U.S. dollar, which positively impacted net sales and membership fees during 2011 by approximately $1,308 and $30, respectively. Of this
combined $1,338 positive impact resulting from changes in foreign currencies on consolidated total revenue, $745 was attributable to the strengthening of the Canadian dollar.

 While we do not agree that providing separate operating results for Canada for each item in MD&A would be helpful to investors, material variations in particular components might be material in any
given quarter. For example, we agree that providing the impact of changes in foreign currencies relative to the U.S. dollar by operating segment in future filings, to the extent that the impact is material, will allow investors to better understand
and evaluate the performance of our business.

2.
We note your response to our prior comment 2, and we remain uncertain how you meet the requirements of Item 303 of Regulation S-K. In this regard, it appears
you are facing an inflationary merchandise cost environment. For example, we noted your gross margin as a percentage of net sales declined by 35 basis points in the first fiscal quarter of 2012 compared to 2011. Similarly, your 2011 fiscal gross
margin as a percent of net sales decreased 14 basis points compared to fiscal 2010. In this regard, cost of merchandise sales is a material component in determining your gross margin amount and we believe a discussion and analysis of this material
component will provide investors with the transparent information that is necessary for an understanding of your results of operation. Accordingly, we believe you should revise your disclosure in future filings.

 2

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 22, 2012

 Response:

 In our Form 10-K for fiscal 2011 (page 24), we reported that gross margin as a percent of net sales decreased 14 basis points, the majority of this impact, or 10 basis points, was due to an $87 million
LIFO inventory charge recorded in 2011. As disclosed, this charge resulted from higher costs for our merchandise inventories, primarily food and sundries and gasoline. In our first fiscal quarter of 2012 (page 24), the 35 basis point decline in
margin was due primarily to increased sales penetration of our lower margin gasoline business, resulting from a 26% increase in the average sales price per gallon (page 23). There was no LIFO inventory charge in the first quarter of fiscal 2012. We
will continue to discuss the impact of significant LIFO adjustments which are indicative of inflationary or deflationary trends and their impact on our gross margin.

 In our most recent Form 10-Q for the second fiscal quarter ended February 12, 2012, filed with the SEC on March 15, 2012, we expanded our quantitative summary table to include merchandise costs
within our MD&A “Gross Margin” discussion. The updated table indicates more clearly that gross margin is calculated by subtracting merchandise costs, or cost of goods sold, from net sales. Our updated quantitative summary table is as
follows:

12 Weeks Ended

24 Weeks Ended

February 12,
2012

February 13,
2011

February 12,
2012

February 13,
2011

 Net sales

$
22,508

$
20,449

$
43,689

$
39,272

 Less merchandise costs

20,139

18,235

39,070

34,992

 Gross margin

$
2,369

$
2,214

$
4,619

$
4,280

 Gross margin as a percent of net sales

10.53
%

10.83
%

10.57
%

10.90
%

 Given the relationship between the effects that changes in merchandise costs have on
changes in net sales, we continue to believe that an analysis of the changes in gross margin best provides investors the necessary information to understand changes in merchandise costs. The gross margin metric (gross margin as a percent of net
sales) is the primary tool used by our management in its analysis of merchandise costs and we believe the one most used by our investors and many of the equity research analysts who provide written research on Costco Wholesale and other retailers to
their client investors. In addition, a review of the top ten U.S. retailers’1 SEC filings will show that they too discuss gross margin or gross profit and do not have a separate discussion related to merchandise costs or cost of sales. By expanding our disclosure as we have done
in our second quarter Form 10-Q, we have provided investors additional information to more clearly understand the relationship between merchandise costs and net sales and the resulting impact on operations.

1
 Source: http://www.stores.org/2011/Top-100-Retailers

 3

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 22, 2012

 Note 1 – Summary of Significant Accounting Policies, page 48

Derivatives, page 55

3.
We note your response to our prior comment 5. Tell us whether the contracts you entered into to mitigate the cost of energy used for your warehouses and other
facilities can be net settled or are expected to be net settled, and tell us if you have ever net settled any of the contracts. If so, explain to us how you consider the guidance under paragraphs ASC 815-10-15-35 and 36 in your assessment on whether
they qualify for the normal purchase and sale scope exception. For electricity contracts, please also advise us how you consider the additional criteria under paragraph 45c of ASC 815-10-15 in determining whether they qualify for the scope
exception.

 Response:

 ASC 815-10-15-35 and 36 relate to the probability of physical settlement and require that for a derivative contract to qualify for the normal purchase and normal sale (NPNS) scope exception it must be
probable at inception and throughout the term of the individual contract that the contract will not settle net and will result in physical delivery. The exception shall not be applied to a contract that requires cash settlements of gains or losses
or otherwise settle gains or losses periodically because those settlements are net settlements.

 At Costco Wholesale, when a
new electricity or natural gas (energy) forward contract becomes effective, it is evaluated for qualification of the NPNS scope exception included in ASC Topic 815, paragraphs 815-10-15-22 through 15-51. When we enter into fixed or variable-priced
contracts, we intend to take physical delivery. All of the contracts are considered “requirements contracts” for accounting purposes as understood in Topic 815, given that each has a determinable quantity based upon our estimate of future
requirements using historical energy usage data, typically the past two to three years. These contracts prohibit resale of any energy quantities to a third party. Net settlement is not required or expected, and physical delivery of quantities
specified in the contracts throughout the term of the contracts is considered probable at inception.

 We do not have a history
of net settling these contracts. However, there have been rare, isolated instances where our energy consumption for a discrete period of time was less than the minimum determinable quantity included in the contract. The net settlement would occur
only for the quantity shortage between the actual energy quantities physically delivered and any stated minimum energy quantity threshold for a discrete period of time during the contract period, if applicable, not the total energy quantity
physically delivered. Any net settlement would represent a small percentage of the physical quantities delivered under an individual contract and would be considered by us to be isolated. Notwithstanding these rare instances, we continue to believe
that physical delivery is probable throughout the term of the contracts.

 As specified in our fixed-priced energy contracts,
additional energy quantities physically delivered above the specified determinable contracted amounts are purchased at the current market price on the date of delivery of these quantities. The optionality quantity feature relating to the purchase of
additional energy units above the determinable amounts does not provide us benefit beyond the assurance of a guaranteed energy supply for use in the normal course of our business. Pricing in variable-priced contracts for physical delivery of energy
quantities is based on current market prices.

 In your comment, you have specifically requested that we advise you of how we
considered the criteria under ASC 815-10-15-45c in determining how we qualify for the NPNS scope exception for our forward contracts to purchase electricity. Our electricity contracts are considered “power purchase” agreements as the term
is understood in Topic 815. We note that ASC paragraph 815-10-15-45, which relates specifically to qualification of the NPNS scope exception for power purchase or sale agreements that are “capacity contracts,” defined in Topic 815 as an
“agreement by an owner of capacity to sell the right to that capacity to another party so that it can satisfy its obligations. For example, in the electric industry, capacity (sometimes referred to as installed capacity) is the capability to
deliver electric power to the electric transmission system of an operating control area.”

 4

 Andrew D. Mew, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 22, 2012

 Deciding whether an option contract is a capacity contract or a traditional option
contract is a matter of judgment, and our judgment has been that our contracts are not capacity contracts. Otherwise, to qualify for the NPNS scope exception under ASC paragraph 815-10-15-45, we would have to be an entity that engages in the sale of
electricity to retail or wholesale customers, and as the buyer we would have to be statutorily or otherwise contractually obligated to maintain sufficient capacity to meet electricity needs of our electricity customer base. Electricity contracts
between Costco Wholesale as a large retail buyer and an electricity provider could not meet the requirement of ASC paragraph 815-10-15-45 related to statutory or contractual obligation.

Forward contracts with optionality for the purchase of electricity that do not meet this criterion of ASC paragraph 815-10-15-45 are
nevertheless eligible to qualify for the NPNS scope exception by meeting all the requirements in ASC paragraphs 815-10-15-42 through 15-44. Satisfying ASC paragraph 815-10-15-41 requires that the Company does not have a history of net settlement.
Satisfying ASC paragraphs 815-10-15-42 through 15-44 requires that where the electricity contracts have optionality in quantity, that the additional quantities are bought or sold at market prices. As indicated in our response to you, we believe that
we have met all of the requirements of ASC paragraphs 815-10-15-41 through 15-44 to be able to designate our electricity contracts as meeting the NPNS scope exception.

 In any event, our fixed-price energy contracts are generally short in duration. As included in the tabular disclosures (page 29) for “Contractual Obligations” in Item 7 in our Form 10-K for
fiscal 2011, the amounts disclosed for our commitments to make future payments under open, fixed-price energy contracts are included as a subset of the amounts disclosed for “Purchase obligations (property, equipment, services and other)”.
Of the amounts disclosed of $324, $71, and $19 for payments due in fiscal 2012, 2013-2014, and 2015-2016, respectively, the component amounts pertaining to open, fixed-price energy contracts totaled $39, $37, and $15 for fiscal 2012, 2013-2014, and
2015-2016, respectively, which are not considered to be material in relation to our consolidated financial statements.

 Please contact me if
you have any questions or further comments.

Sincerely,

COSTCO WHOLESALE CORPORATION

 /s/ RICHARD A. GALANTI

Richard A. Galanti

Executive Vice President and

Chief Financial Officer

 5

March 8, 2012
 Via E-mail

Richard A. Galanti  Executive Vice President, Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027
Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 28, 2011
Filed October 14, 2011 Response dated February 29, 2012 File No. 0-20355

Dear Mr. Galanti:
 We have reviewed your response and have th e following additional comments.  In some
of our comments, we may ask you to provide us  with information so we may better understand
your disclosure.
 Please respond to this letter within te n business days by amending your filings, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
            Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7—Management’s Discussion and Analysis  of Financial Condition and Results of
Operations, page 21
Results of Operations, page 22

1. We note your response to our prior comment 1, and continue to believe that you should
provide a separate operating re sults’ discussion for your Cana dian operations so investors
can better understand and eval uate the performance of your business.  Further, we note
your assertion that your Cana dian operations, among all your operations are the most
similar to your United States operations.  However, it appears the Canadian operations
are economically dissimilar to the United St ates operations. We note from the segment
footnote that since fiscal 2009 the Canadi an operations have produced significantly

Richard A. Galanti Costco Wholesale Corporation  March 8, 2012 Page 2

 higher revenue and operating income growth  as compared to the United States
operations.  In this regard, we remain uncertain how your results’ of operations
discussion adequately explains  the significant growth behind  your Canadian operations.
Accordingly, we continue to believe you should revise to address your Canadian
operations separately from your United Stat es operations in future filings.

2. We note your response to our prior comment 2, and we remain uncertain how you meet
the requirements of Item 303 of Regulation S- K.  In this regard, it appears you are facing
an inflationary merchandise cost environment.  For example, we noted your gross margin as a percentage of net sales declined by 35 ba sis points in the first fiscal quarter of 2012
compared to 2011.  Similarly, your 2011 fiscal gross margin as a percent of net sales decreased 14 basis points compared to fiscal 2010.  In this regard, cost of merchandise
sales is a material component in determini ng your gross margin amount and we believe a
discussion and analysis of this material component will provide investors with the
transparent information that is necessary for an understanding of your results of operation.  Accordingly, we belie ve you should revise your disclosure in future filings.
 Note 1 – Summary of Significan t Accounting Policies, page 48

 Derivatives, page 55

3. We note your response to our prior comment 5.  Tell us whether the contracts you entered
into to mitigate the cost of energy used for your warehouses and other facilities can be net
settled or are expected to be net settled, and tell us if you have ever net settled any of the
contracts.  If so, explain to us how you c onsider the guidance unde r paragraphs ASC 815-
10-15-35 and 36 in your assessment on whether they qualify for the normal purchase and
sale scope exception. For electric ity contracts, please also ad vise us how you consider the
additional criteria under paragr aph 45c of ASC 815-10-15 in determining whether they
qualify for the scope exception.

You may contact Robert Babul a, Staff Accountant, at ( 202) 551-3339 or me at (202) 551-
3377 if you have questions regarding our  comments or any other questions.

Sincerely,
    /s/ Andrew D. Mew
 Andrew D. Mew Accounting Branch Chief

CORRESP
1
filename1.htm

Correspondence

 Writer’s Direct Number: (425) 313-8203

Fax: (425) 313-6593

 February 29, 2012

 BY EDGAR

Andrew D. Mew

Accounting Branch Chief

 United States Securities and Exchange Commission Mail Stop 3561

 Washington, D.C.
20549

 Re:

 Costco Wholesale Corp. — Form 10-K for the Fiscal Year Ended August 28, 2011, filed October 14, 2011 — File No. 0-20355

 Dear Mr. Mew:

 In response to your letter of February 1 (the “Letter”), please see the discussion below, which corresponds to the numbered paragraphs in your letter. Thank you again for granting us
additional time to respond to the Letter.

 Form 10-K for the Fiscal Year Ended August 28, 2011

Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21

General

 1.

 Reference is made to Note 9 (Income Taxes) on page 71 where you have generated 36% of your pretax income from foreign operations in fiscal year
2011. Further, pretax income from foreign operations has grown at a significantly higher rate during the past three fiscal years as compared to those of your domestic operations for the same period. We note you reported segment financial information
based on geographic locations as disclosed in Note 12. As such, we believe you should provide separate operating results’ discussions based on these segments rather than solely on a consolidated basis so that investors can better understand the
performance of your businesses. Your separate discussions should provide management insights into the factors/reasons behind the changes in their historical operating results and how the factors would affect their future earnings by quantifying
their impact to the extent material, if possible. Refer to the guidance within Item 303 of Regulation S-K and SEC Release No. 33-8350.

 Andrew D. Mew, Accounting Branch Chief

United States Securities and Exchange Commission

 February 29, 2012

 Response:

Item 303 of Regulation S-K states that a registrant should include a discussion of segment information in
Management’s Discussion and Analysis (MD&A) to the extent that, based upon management’s judgment, it would be beneficial in understanding the registrant’s business. SEC Release No. 33-8350 (the Release) further clarifies the
three principal objectives of MD&A as:

 •

 to provide a narrative explanation of a company’s financial statements that enables investors to see the company through the eyes of
management;

 •

 to enhance the overall financial disclosure and provide the context within which financial information should be analyzed; and

 •

 to provide information about the quality of, and potential variability of, a company’s earnings and cash flow, so that investors can ascertain
the likelihood that past performance is indicative of future performance.

 The Release
specifically states registrants should avoid “unnecessary duplication and immaterial detail that is not required and does not promote understanding of a company’s overall financial condition and operating performance.”

We believe our disclosure meets these objectives.

First, the fact that segment disclosure is required for a business unit does not per se require a separate discussion in
MD&A that mirrors the principal business segment. The segment disclosure in Note 12 on page 80 is prescribed by the quantitative thresholds in ASC 280 and is not indicative of meaningful operating differences among our segments. The delineation
of segments is largely based on management’s organization of our world-wide operations for operational decisions and assessments of financial performance, which considers geographic locations. The segments are United States Operations (U.S.
segment), Canadian Operations (Canada segment) and Other International Operations (Other International segment), which is comprised of six other countries in which we operate. “Other International” emerges as a segment not because of its
separate significance as a group of countries but simply because it is the residual after the two primary segments are identified.

 As disclosed in our filing, we operate our membership warehouses based on the concept of offering our members low prices on a limited selection of nationally branded and private-label products in a wide
range of merchandise categories, which will produce high sales volumes and rapid inventory turnover. 2011 Form 10-K, page 4. This model is consistently applied in each country in which we operate. Due to the relatively homogenous nature of our
world-wide operations and the consistency of our operating model, we believe any additional segment discussion and analysis would not be material for investors. In addition, while some operating metrics in the six referenced countries

 2

 Andrew D. Mew, Accounting Branch Chief

United States Securities and Exchange Commission

 February 29, 2012

are different than those of the U.S. segment (as discussed further in this response) and are often different from each other, these differences have not been material to the understanding of the
reasons for period-to-period changes in the historical operating results.

 The U.S., Canada and Other
International segments represented 73%, 16% and 11% of Total revenue, respectively, and 57%, 26% and 17% of Operating income, respectively in 2011. In 2010, the U.S., Canada and Other International segments represented 77%, 15% and 8% of Total
revenue, respectively, and 63%, 26% and 11% of Operating income, respectively.

 The Letter
references Note 9 on page 71, states that 36% of pre-tax income is attributable to our foreign operations in fiscal year 2011, and notes the reported growth in income from these operations over the past three years. Please note that a large portion
of this figure is attributable to our Canadian operations, which among all of our operations are the most similar to those in the United States. In addition, the main factor in the significant growth of the Other International segment in 2011 was
the initial consolidation of our 50%-owned joint venture in Mexico. Prior to 2011, we accounted for these operations using the equity method. The impact of this adoption is disclosed throughout MD&A and the financial statement footnotes in our
2011 Form 10-K1. Further, excluding Canada and the
consolidated earnings from our 50%-owned joint venture in Mexico, pre-tax income attributable to the remaining foreign operations in fiscal year 2011 was 11%, consistent with the previous three fiscal years, which have been 7% to 11% of our pre-tax
income.

 When preparing our MD&A disclosures, we consider material segment-specific activity impacting the
results of our operations that, in our opinion, would be necessary for a reader to better understand the results of operations. Examples of items we have disclosed in the past three years relating to individual segments include:

 •

 Refund of a previously recorded Canadian tax liability2;

 •

 The impacts of foreign currency fluctuations on the operations of our International
segments3;

 •

 Consolidation of Costco Mexico beginning in 20111; and

 •

 Costco Mexico has lower SG&A expenses as a percent of its own net sales.4

 We do believe that providing qualitative information regarding some differences in operating metrics among our segments in the MD&A Overview in future filings will provide investors with additional
perspective related to how future growth in those operations may impact our overall operating results. In our future filings we will add language to the following effect in the Overview section:

1

 2011 Form 10-K, pages 21-27 and page 48.

2

 2010 Form 10-K, page 24.

3

 2011 Form 10-K, pages 23-25.

4

 Id. at page 25.

 3

 Andrew D. Mew, Accounting Branch Chief

United States Securities and Exchange Commission

 February 29, 2012

 “Our operating model is generally the same across our U.S., Canada,
and Other International segments. However, certain countries in the Other International segment have relatively higher rates of square footage growth, lower wage and benefits as a percentage of country sales, and/or less direct membership warehouse
competition. Additionally, we operate our lower margin gasoline business only in the United States and Canada.”

 As we have historically done in our filings, we will continue to disclose material segment-specific activity impacting the results of our operations.

Results of Operations, page 22

 2.

 Please revise to analyze cost of merchandise sales line item in your operating results’ discussion. We note cost of sales is a material
component of your operating expenses and a discussion and analysis of this line item will provide investors with the information to better understand your results of operations as a whole. Please provide us your proposed disclosure in the response.
Please also ensure that the proposed disclosure provides the underlying reasons/drivers for any material changes. For example, in addition to quantifying the impacts resulting from changes in price and volume, please further explain their underlying
substantive reasons behind these changes.

 Response:

Merchandise costs vary closely with changes in net sales volume and, therefore, must be analyzed in
conjunction with net sales. Our 2011 Form 10-K explicitly defined gross margin as net sales less merchandise
costs.5 Gross margin is a key metric analyzed by our
management and, we believe, investors, to better understand the results of our operations as a whole. Gross margin also is a metric consistently followed, discussed and disclosed across the retail industry in evaluating the results of operations.
Because of this, we believe that the most effective method for evaluating and better understanding the results of our operations is through a discussion of gross margin (as opposed to merchandise costs).

In addition, we believe that we have provided in very substantial detail the reasons for material changes in our gross
margin to the extent that we know those reasons. Examples of such disclosures include:

 •

 Describing the basis point impact of gasoline sales on our gross margin percentage6;

5

 2011 Form 10-K, page 22.

6

 2011 Form 10-K, page 24; 2010 Form 10-K, page 23, and 2009 Form 10-K, pages 22-23.

 4

 Andrew D. Mew, Accounting Branch Chief

United States Securities and Exchange Commission

 February 29, 2012

 •

 Quantifying the impact of LIFO on the total margin and the gross margin percentage
comparison7; and

 •

 Quantifying the impact of changes in foreign exchange rates impacting total gross margin.7

 Note 1 – Summary of Significant Accounting Policies, page 48

General

 3.

 We note the increased significance of your foreign operations. Please explain to us in reasonable detail how you considered whether the transfer
of net assets from the foreign subsidiaries to the U.S. parent company was restricted to the extent that you should provide “Schedule I – Condensed Financial Information of Registrant” in your Form 10-K. Refer to Rules 5-04 and 12-04
of Regulation S-X.

 Response:

We considered whether the transfer of net assets from the foreign subsidiaries to the U.S parent company was restricted to
the extent that 25% of the consolidated company’s net assets were unavailable to be transferred to the parent company without the consent of a third-party, requiring the inclusion of “Schedule I – Condensed Financial Information of
Registrant.” We noted that there are no restrictions on the transfer of cash to the parent company that would prevent any of our wholly owned subsidiaries from making such a transfer. In addition, we analyzed the total net assets of our
non-wholly owned subsidiaries, noting that they accounted for significantly less than 25% of the consolidated net assets threshold, and therefore any restrictions on those entities would not meet the disclosure requirements under Regulation S-X. As
such, the inclusion of “Schedule I – Condensed Financial Information of Registrant” is not required.

 Cash
and Cash Equivalents, page 49

 4.

 It appears from your disclosure on page 28 that the cash held in your foreign consolidated subsidiaries is significant and that it may not be
available to be used for certain financing activities such as repayment of short term debt or to repurchase common stock. If so, please disclose the cash amounts which are not freely transferable to the Parent in your notes to the financial
statements. We refer you to Rule 5-02.1 of Regulation S-X.

7

 2011 Form 10-K, page 24-25.

 5

 Andrew D. Mew, Accounting Branch Chief

United States Securities and Exchange Commission

 February 29, 2012

 Response:

The lack of availability of the cash and short-term investments held by our foreign consolidated subsidiaries discussed
on page 28 in Management’s Discussion and Analysis is not the result of restrictions within the meaning of Rule 5-02. That lack of availability relates to our current plans to utilize these funds for expansion in our international locations, as
well as the absence of a need for the funds within the U.S. (due to our strong cash position domestically). To clarify this distinction, in future filings we will revise the discussion on page 28 by removing the sentence “Cash and cash
equivalents and short-term investments held by these consolidated subsidiaries and other entities may not be available to be used for certain financing activities such as the repayment of short-term debt or to repurchase common stock.” We will
replace that sentence with a new disclosure to the following effect:

 The Company has no current plans to
repatriate the cash and cash equivalents and short-term investments held by these subsidiaries. Given our belief that our current U.S. cash position is sufficient to meet our U.S. requirements, and our intention to use subsidiary funds to expand
operations within the international jurisdictions where the cash is currently held, the repatriation of these funds should not occur in the foreseeable future. As such, we currently consider these funds to be indefinitely reinvested.

Derivatives, page 55

 5.

 We note you enter into derivative contracts to mitigate the cost of energy used for your warehouses and other facilities, and you state you are
applying the normal purchase and normal sales exception and therefore you are not recording mark-to-market adjustments at each reporting period end. Please provide us your accounting analysis supporting the election of the normal purchase and normal
sales exception for your derivative contracts entered into to mitigate your warehouse energy costs. Refer to ASC 815-10-15-27 through 29.

 Response:

 We concluded that our electricity and natural gas
contracts qualify for the normal purchases and normal sales exception under ASC 815-10-15-22 to -51. The Staff specifically referenced ASC 815-10-15-27 to -29, which outline one of the four elements necessary to qualify for this exception;
specifically, that the contract terms are consistent with the terms of the entity’s normal purchase, that is, the quantity purchased must be reasonable in relation to the entity’s business needs.

Our utility and natural gas contracts are evaluated for compliance with the normal purchases and normal sales exception
as they are executed.

 6

 Andrew D. Mew, Accounting Branch Chief

United States Securities and Exchange Commission

 February 29, 2012

 These contracts provide for the purchase of energy units necessary to
directly support only the operation of specified warehouses. Additionally, the contract terms explicitly prohibit resale to another party. Energy quantities explicitly stated in these contracts are based upon management’s best estimate of
future energy consumption requirements using the respective warehouses’ historical energy usage data, typically the past two to three years.

 Based upon the information provided above, we concluded that these contracts meet the normal purchases and norm

CORRESP
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filename1.htm

Correspondence

 February 3, 2012

 BY EDGAR

 Mr. Andrew D. Mew

 Accounting Branch Chief

 United States Securities and Exchange Commission

Division of Corporation Finance

 100 F Street,
N. E.

 Washington, D.C. 20549

Re:
Costco Wholesale Corporation

Form 10-K for the Fiscal Year Ended August 28, 2011

Filed October 14, 2011

File No. 0-20355

 Dear Mr. Mew:

Costco Wholesale Corp. is in receipt of your letter dated February 1, 2012, relating to the above-referenced filing. The Company is preparing a response.

 Pursuant to a conversation on February 3, 2012, with Robert Babula, we have agreed on an extension of time from February 15, 2012, to and
including February 29, 2012 to submit a response to the letter.

 Thank you for your consideration in this matter.

Sincerely,

 /s/ Richard A. Galanti

Richard A. Galanti

Executive Vice President, Chief Financial Officer

February 1, 2012
 Via E-mail

Richard A. Galanti  Executive Vice President, Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027
Re: Costco Wholesale Corporation
 Form 10-K for the Fiscal Year Ended August 28, 2011
Filed October 14, 2011 File No. 0-20355

Dear Mr. Galanti:
 We have reviewed your filing and have the following comments.  We have limited our
review to only your financial statements and re lated disclosures and do not intend to expand our
review to other portions of your documents.  In  some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
            Form 10-K for the Fiscal Year Ended August 28, 2011

 Item 7—Management’s Discussion and Analysis  of Financial Condition and Results of
Operations, page 21
 General

1. Reference is made to Note 9 (Income Taxe s) on page 71 where you have generated 36%
of your pretax income from foreign operati ons in fiscal year 2011.  Further, pretax
income from foreign operations has grown at  a significantly higher rate during the past
three fiscal years as compared  to those of your domestic operations for the same period.
We note you reported segment financial inform ation based on geographic locations as
disclosed in Note 12.  As such, we believe you should provide separate  operating results’
discussions based on these segments rather th an solely on a consolidated basis so that

Richard A. Galanti Costco Wholesale Corporation  February 1, 2012 Page 2

 investors can better understa nd the performance of your bus inesses. Your separate
discussions should provide ma nagement insights into the factors/reasons behind the
changes in their historical ope rating results and how the factor s would affect their future
earnings by quantifying their impact to the ex tent material, if possible. Refer to the
guidance within Item 303 of Regul ation S-K and SEC Release No. 33-8350.
 Results of Operations, page 22

2. Please revise to analyze cost of merchandi se sales line item in your operating results’
discussion.  We note cost of sa les is a material component of your operating expenses and
a discussion and analysis of this  line item w ill provide investors with the information  to
better understand your results of operations as a whole.  Please pr ovide us your proposed
disclosure in the response.   Please also ensure that the proposed disclosure provides the
underlying reasons/drivers for any material changes.  For example, in addition to
quantifying the impacts resulting from cha nges in price and volume, please further
explain their underlying substantiv e reasons behind these changes.

Note 1 – Summary of Significan t Accounting Policies, page 48
 General

3. We note the increased significance of your fore ign operations.  Please explain to us in
reasonable detail how you considered whether th e transfer of net assets from the foreign
subsidiaries to the U.S. parent company wa s restricted to the extent that you should
provide “Schedule I – Condensed Financial In formation of Registrant” in your Form 10-
K.  Refer to Rules 5-04 and 12-04 of Regulation S-X.
Cash and Cash Equivalents, page 49

4. It appears from your disclosure on page 28 that  the cash held in your foreign consolidated
subsidiaries is significant and th at it may not be avai lable to be used  for certain financing
activities such as repayment of short term de bt or to repurchase common stock.  If so,
please disclose the cash amounts which are not freely transferable to the Parent in your
notes to the financial statements. We re fer you to Rule 5-02.1 of Regulation S-X.
 Derivatives, page 55

5. We note you enter into derivative contracts to  mitigate the cost of energy used for your
warehouses and other facilities, and you stat e you are applying the normal purchase and
normal sales exception and therefore you are not  recording mark-to-market adjustments
at each reporting period end.  Please provide  us your accounting analysis supporting the
election of the normal purchase and normal sa les exception for your derivative contracts
entered into to mitigate your warehouse energy costs.  Refer to ASC 815-10-15-27
through 29.

Richard A. Galanti Costco Wholesale Corporation  February 1, 2012 Page 3

Revenue Recognition, page 56

6. Refer to your disclosure regarding your cha nge in your membership renewal policy.  Tell
us and disclose what necessitated this change  and the impact it had on your consolidated
financial statements.  In this regard, tell us  in detail how you concl uded the change had an
immaterial  effect of deferring rec ognition of membership fees  paid by late-renewing
members.  Also, tell us and disclose th e percentage of late-renewing members and
quantify the estimated amounts i nvolved in your analysis.
 Note 9 – Income Taxes, page 71

7. Tell us how your statement that the foreign undistributed earnings are deemed by the
Company to be indefinitely reinvested comp lies with ASC 740-30-25-17. In this regard,
tell us if you have ever repatr iated foreign earnings in any of  the last three fiscal years.

Commitments and Contingencies, page 74
8. A large portion of your disclosu re is primarily related to describing the history of the
legal proceedings in various cases in whic h you are involved, incl uding the dates of
various motions, appeals, and hearings.  In addition, you state on page 79 that it is
possible that an unfavorable outcome could resu lt in a charge which could be material to
the results of an individual fiscal quarter and that “[e]xcept where indicated otherwise
above, a reasonable estimate of the possible loss  or range of loss cannot be made at this
time for the matters.”  We note no disclosure of reasonable possible loss or range of loss
in any of the matters described.  Therefor e, it is not clear whether you believe the
likelihood of an adverse outcome is other than  remote, nor is it clear how material or
potentially material the impact resulting from each of these matters could be on your
financial statements.  We believe your di sclosure should be enhanced by focusing on
describing the current status of the cases, in  plain English, rather than on the history of
legal proceedings.  Lastly, it is not determ inable from your disclosure if you have
recorded an accrual for one or more of th ese matters or if there are unrecognized
contingencies that could require  further disclosure regarding their aggregate reasonable
possible loss exposure in exce ss of accruals, if any.  Pleas e advise us and revise your
disclosure.  Refer to the di sclosure requirements set fort h by paragraphs 1-5 of FASB
ASC 450-20-50.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Richard A. Galanti Costco Wholesale Corporation  February 1, 2012 Page 4

  In responding to our comments, please provi de a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

You may contact Robert Babul a, Staff Accountant, at ( 202) 551-3339 or me at (202) 551-
3377 if you have questions regarding our  comments or any other questions.

Sincerely,
    /s/ Andrew D. Mew
 Andrew D. Mew Accounting Branch Chief

Mail Stop 3561          March 31, 2010
Via U.S. Mail and Fax (425) 313-6593

Richard A. Galanti Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, Washington  98027
Re: Costco Wholesale Corporation
Form 10-K for the Fiscal Year Ended August 30, 2009 Filed October 16, 2009 Definitive Proxy Statement on Schedule 14A Filed December 18, 2009
  File No. 000-20355

Dear Mr. Galanti:
We have completed our review of the above referenced filings and we have no further
comments at this time.          S i n c e r e l y ,             H. Christopher Owings         A s s i s t a n t  D i r e c t o r

CORRESP
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CORRESPONDENCE

 Writer’s Direct Number: (425) 313-8203

 Fax: (425) 313-6593

 March 29, 2010

 BY UPS OVERNIGHT MAIL AND FACSIMILE

 H. Christopher Owings

 Assistant Director

 United States Securities and Exchange Commission Mail Stop 3561

 Washington, D.C. 20549

Re:
Costco Wholesale Corp. — Definitive Proxy Statement on Schedule 14A, filed December 18, 2009 — File No. 000-20355

 Dear Mr. Owings:

 In
response to your letter of March 5, please see the discussion below which corresponds to the numbered paragraphs in your letter.

 Definitive Proxy Statement on Schedule 14A

1.
We note that in response to comment eight of our January 21, 2010 letter you state that you believe your analysis of why you choose to pay each element of
compensation is adequately described on page 11 of your proxy statement. You refer to your disclosure on page 11 which states, in part, that in establishing your mix of equity, salary, bonus and other compensation components, you “relied upon
the fact that [your] current structure has been utilized successfully in years past… .” This disclosure does not clarify why you chose to pay each element of compensation, but rather states why you chose to not alter the mix of elements
you considered in establishing your compensation. Please provide us with proposed revisions describing why you chose to pay each element of compensation.

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 March 29, 2010

 Response: Following is a proposed disclosure that responds to the comment:

“The components of our executive compensation programs are equity incentive compensation, consisting solely of awards of equity
compensation (performance-based RSUs with a time-vesting component), base salary, a discretionary cash-bonus program, and other benefits (primarily consisting of health plans, a 401(k) plan and a deferred compensation plan). The Committee believes
that these components are appropriate and are consistent with the Company’s long-standing approach to executive compensation, which has been to make performance-based equity awards the dominant form of compensation.

 RSU’s — RSU grants represent the largest component of compensation, based on their fair value at the time they are granted. The
Committee believes that emphasizing this form of compensation above others helps to align the interests of employee-grantees with those of shareholders, both in the short term (with the performance conditions) and in the longer term (with
time-vesting of up to five years). To a lesser extent, the Committee also takes into account that longer-term vesting requirements can help promote executive retention.

 Base salary — Base salary is the second largest compensation component. Payment of this level of fixed cash compensation is consistent with the need for executive officers to have a predictable
baseline of cash compensation, which has been subject generally to modest annual adjustments (with the exception of Messrs. Sinegal and Brotman, whose salaries have remained at the same level since 1999).

 Cash bonus — Discretionary cash bonuses have formed a relatively small component of compensation. They address short-term incentives,
and are linked to performance during the fiscal year. Historically, at least some portion of the cash bonuses has been paid each year. The Committee believes that maintaining cash bonuses as a modest element of compensation is consistent with
preferring long-term equity incentives as being in the greater interest of the Company and its shareholders.

 Other elements
and perquisites — Consistent with its position as a low-overhead operator, the Company has traditionally sought to have modest perquisites and “other

 2

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 March 29, 2010

compensation.” A significant component of this compensation is related to helping executives fund their retirement needs (through the 401(k) and deferred compensation programs), recognizing
that the Company does not have a traditional retirement plan and that no executive has any agreement entitling him or her to severance compensation.”

2.
On page 18 of your letter, in response to comment nine of our January 21, 2010 letter you describe Mr. Sinegal’s and the Compensation Committee’s
broad discretion in determining cash bonuses, but your filing appears to only briefly reference the extent of this discretion. Please provide us with proposed revisions which incorporate your discussion into your filing.

 Response: The following shows proposed additions (in italics) to the current disclosure concerning cash
bonuses:

 “The Named Executive Officers (other than Messrs. Brotman and Sinegal) received discretionary cash bonuses
ranging from approximately $24,000 to approximately $40,000, reduced from the prior year. Bonus criteria were approved by the Committee near the beginning of the fiscal year, based upon the recommendation of Mr. Sinegal. After the close of
the fiscal year, Mr. Sinegal submits recommended bonus amounts to the Compensation Committee for consideration. The Committee maintains the discretion to vary from Mr. Sinegal’s recommendation but historically has deferred to it.
Roughly 50% of the bonus potential for fiscal year 2009 was determined with reference to an internal net income goal, which was not achieved. Although Mr. Sinegal had the discretion to recommend some amount of income-related bonus despite
the failure to achieve the goal he chose not to do so. Eligibility for the remaining portion of the bonus was determined with reference to performance measures relevant to the executive officer’s area of responsibility: for those whose
responsibilities are operational, the goals related to sales, controllable expenses, inventory shrinkage, and pretax profit in their areas of responsibility; for those whose responsibilities are primarily buying, the goals related to sales, gross
margin,

 3

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 March 29, 2010

inventory shrinkage, and inventory turns in their areas of responsibility; for those whose responsibilities combine operational and buying functions, the goals related to a combination of those
described above; and for those whose responsibilities are staff functions, the goals related to a combination of Company-wide operational and buying goals, in addition to qualitative factors relevant to their areas of responsibilities. For each
officer there is also a component not linked to any objective measure. Mr. Sinegal is not bound to recommend any specific bonus amount based on these factors; he can and does consider what he believes to be the appropriate bonus in view of all
the circumstances. To be eligible for the annual bonus, the individual must be employed by the Company at the time bonus checks are issued (generally in November).”

 Please contact me if you have any questions or further comments.

Sincerely,

COSTCO WHOLESALE

/S/    RICHARD
GALANTI

Richard Galanti

Executive Vice President and Chief Financial Officer

 4

Mail Stop 3561          March 5, 2010  Richard A. Galanti Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, Washington  98027
Re: Costco Wholesale Corporation
Definitive Proxy Statement on Schedule 14A Filed December 18, 2009
  File No. 000-20355

 We have reviewed your response letter  dated February 8, 2010 and have the
following comments.  You should comply with these comments in all future filings, if applicable.  Please confirm in writing that you will do so and also explain to us in
sufficient detail how you intend to comply by pr oviding us with your proposed revisions.
If you disagree, we will consider your explana tion as to why our comment is inapplicable
or a revision is unnecessary.  Please be as detailed as necessary in your explanation.
After reviewing this information, we may raise additional comments.

Definitive Proxy Statement on Schedule 14A

1. We note that in response to comment eight of our January  21, 2010 letter you
state that you believe your analysis of  why you choose to pay each element of
compensation is adequately described on page 11 of your proxy statement.  You
refer to your disclosure on page 11 which st ates, in part, that in establishing your
mix of equity, salary, bonus and othe r compensation components, you “relied
upon the fact that [your] current structure has been utilized successfully in years
past… .”  This disclosure does not clarify why you chose to pay each element of compensation, but rather states why you c hose to not alter th e mix of elements
you considered in establishing your co mpensation.  Please provide us with
proposed revisions describing why y ou chose to pay each element of
compensation.
2. On page 18 of your letter, in response to comment nine of our January 21, 2010
letter you describe Mr. Sinegal’s a nd the Compensation Committee’s broad
discretion in determining cash bonuses, but  your filing appears to only briefly
reference the extent of this  discretion.  Please provide us with proposed revisions
which incorporate your discussion into your filing.

Richard A. Galanti
Costco Wholesale Corporation March 5, 2010 Page 2
* * *

Please contact Chris Chase, Attorney-Advi sor, at (202) 551-3485 or me at (202)
551-3720 with any questions.
        S i n c e r e l y ,            H. Christopher Owings        A s s i s t a n t  D i r e c t o r

CORRESP
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Correspondence Letter

Writer’s Direct Number:

(425) 313-8203

Fax:

(425) 313-6593

 February 8, 2010

BY UPS OVERNIGHT MAIL AND FACSIMILE

 H.
Christopher Owings

 Assistant Director

 United States Securities and Exchange Commission

 Mail Stop 3561

 Washington, D.C. 20549

Re:
Costco Wholesale Corp. — Form 10-K for the Fiscal Year Ended August 30, 2009, filed October 16, 2009, and Definitive Proxy Statement on Schedule 14A,
filed December 18, 2009 — File No. 000-20355

 Dear Mr. Owings:

 In response to your letter of January 21, please see the discussion below, which corresponds to the numbered paragraphs in your letter.

 Form 10-K for the Fiscal Year Ended August 30, 2009

 Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 20

1.
 Please expand this section to discuss known material trends and uncertainties that will have, or are reasonably likely to have, a material
impact on your revenues or income or result in your liquidity decreasing or increasing in any material way. We note, for example, on page 27 you state your net income decreased $0.42 per diluted share in 2009 versus 2008. You attribute $0.27 of this
decrease to issues involving foreign currencies ($0.19), litigation ($0.05) and insurance ($0.03), but do not discuss the remaining $0.15 per diluted share decrease. Please provide additional analysis concerning the quality and variability

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

of your earnings and cash flows so that investors can ascertain the likelihood or the extent past performance is indicative of future performance. Please discuss whether you expect levels to
remain at this level or to increase or decrease. Also, you should consider discussing the impact of any changes on your earnings. Further, please discuss in reasonable detail: economic or industry-wide factors relevant to your company, material
opportunities, challenges, and risk in the short and long term and actions you are taking to address them. Refer to Item 303 of Regulation S-K and SEC Release No. 33-8350.

 Response:

 We
acknowledge the importance of providing meaningful Item 7 MD&A Overview disclosures in our annual and quarterly reports, including a discussion of material trends and uncertainties as well as economic or industry-wide factors relevant to
our Company, and material opportunities, challenges and risks and actions we are taking to address them. In our future Form 10-Q and 10-K filings, we will expand our disclosure to further address these items. For example, subject to potential
intervening changes in the business, we will include disclosure in substantially the following form in the MD&A Overview section of our next Form 10-Q filing:

 Proposed disclosure (new text underlined):

 We believe that the most
important driver of increasing profitability is sales growth, particularly comparable sales growth. Comparable sales growth is achieved through a combination of increasing the frequency with which our members shop and the amounts they spend on each
visit. Sales comparisons can also be particularly influenced by two factors that are beyond our control, including fluctuations in currency exchange rates (with respect to the consolidation of the results of our international operations) and changes
in the cost of gasoline and associated competitive conditions (primarily impacting domestic operations). The higher our comparable sales not associated with currency fluctuations the more we can leverage certain of our selling, general and

 2

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

administrative expenses, reducing them as a percentage of sales and enhancing profitability. Generating comparable sales growth is foremost a question of making available to our members the right
merchandise at the right prices, a skill that we believe the Company has repeatedly demonstrated over the long term. Another substantial factor in sales growth is the health of the economies in which we do business, especially the United States.
Adverse economic conditions negatively impacted spending by our customers during 2009, and we expect that negative impact to continue in 2010. Sales growth and our gross margin are also impacted by our competition, which is vigorous and widespread,
including other warehouse clubs, discount, department, drug, variety and specialty stores, and supermarkets, as well as internet retailers. While we cannot control or reliably predict general economic health or changes in competition, we believe
that we have been successful historically in adapting our business to these changes, such as through adjustments to our pricing and to our merchandise mix, including increasing the penetration of our private label items. Our philosophy is not to
focus in the short term on maximizing prices that our members can be charged but to maintain what we believe is a perception among our members of our “pricing authority” – consistently providing the most competitive values. This may
cause us, for example, at certain times to absorb increases in merchandise costs rather than immediately passing them along to our members.

 Our financial performance also depends heavily on our ability to control costs. While we believe that we have achieved successes in this area historically, some significant costs are partially outside
our control, most particularly health care expenses. With respect to expenses relating to the compensation of our employees, our philosophy is not to seek to minimize the wages and benefits that they earn. Rather, we believe that achieving our
longer-term objectives of reducing turnover and enhancing employee satisfaction requires maintaining compensation levels that are better than the industry average for much of

 3

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

our workforce. This may cause us, for example, to absorb costs that other employers might seek to pass through to their workforces. Because our business is operated on very low margins, modest
changes in various items in the income statement, particularly gross margin and selling, general and administrative expenses, can have substantial impacts on net income.

 We also achieve growth by opening new warehouses and relocating existing warehouses to larger facilities. As our warehouse base grows and
available and desirable potential sites become more difficult to secure, square footage growth becomes a comparatively less substantial component of growth, but the negative aspects of such growth (including lower initial operating profitability
relative to existing warehouses and cannibalization of sales at existing warehouse when openings occur in existing markets) are ameliorated. Our rate of square footage growth is higher in foreign markets, due to the smaller base in those markets,
and we expect that to continue.

 With respect to our net income discussion in Part II, Item 7, page 27 of our Form
10-K, our discussion in this section itself focused on the more significant unusual items that accounted for the decrease in net income compared to the prior year. The remaining $0.15 per diluted share decrease is the result of a combination of
other factors, such as sales, membership fees, gross margin, and selling, general and administrative expenses, that are discussed in detail in the preceding sections of the MD&A disclosure. In future filings, we will expand our net income
disclosure to clarify these points and, when applicable, provide additional analysis to assist investors in ascertaining the likelihood or extent past performance is indicative of future performance.

 Using the net income disclosure from the Form 10-K (p. 27) as an example, we would revise the disclosure as follows (new text
underlined):

 4

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

 Net Income

 2009 vs. 2008

 Net
income for 2009 decreased to $1,086, or $2.47 per diluted share, from $1,283, or $2.89 per diluted share, during 2008, representing a 15% decrease in diluted net income per share. As previously discussed, foreign currencies, particularly in Canada,
the United Kingdom and Korea, weakened against the U.S. dollar, which negatively impacted net income for 2009 by approximately $83 after-tax, or $0.19 per diluted share. Additionally, net income for 2009 was negatively impacted by a $34 pre-tax
charge, or approximately $0.05 per diluted share, related to a proposed litigation settlement concerning our membership renewal policy, as well as a $23 pre-tax charge, or approximately $0.03 per diluted share, for an adjustment to the net
realizable value of the cash surrender value of employee life insurance contracts. Other factors, discussed in detail above (including sales, membership fees, gross margin, and selling, general and administrative expenses), contributed to the
decrease in net income, most particularly the decline in sales. A substantial decline in share repurchase activity also impacted the decline in earnings per share. Net income for 2009 was positively impacted by a $32 pre-tax, or $0.05 per
diluted share, benefit due to the reversal of the LIFO reserve established in 2008.

 Notes to Consolidated Financial Statements, page 50

 Note 1 – Summary of Significant Accounting Policies

 Property and Equipment, page 52

2.
 We note the estimated useful lives of your buildings ranges from 5-50 years. In this regard, explain to us the reason for such a wide range. In
addition, clarify the nature of the building structures that fall within the low end of the

 5

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

range and explain to us why their estimated useful lives are reasonable.

 Response:

 In general, we assign estimated useful lives to our building assets
using a componentization method, rather than assigning a single life to the building as a whole. Each building has approximately 25 different asset categories, such as flooring, restrooms, roofing, masonry, external metal building structure, HVAC
systems and parking lot assets. Each category is assigned a useful life based on the shorter of the estimated useful life of that category or the remaining lease term. Those categories assigned a useful life of five years generally include carpeting
and flooring (other than the concrete slab), which are replaced more frequently and which generally represent a very small percentage of the total value of the building and improvements.

 Proposed disclosure: (new text underlined)

 Property and Equipment

 Property and equipment are stated at cost. In general,
new building additions are separated into components, each with its own estimated useful life. Depreciation and amortization expenses are computed using the straight-line method. Interest costs incurred on property during the construction period
are capitalized. Estimated useful lives by major asset category are as follows:

 Years

 Buildings

5 – 50

 Equipment and fixtures

3 – 10

 Leasehold improvements

Shorter of useful life or lease term

 Land improvements

15

 Software acquisition and development

3 – 6

 6

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

 Revenue Recognition, page 56

3.
We note you offer free technical support services and extended warranties on electronic products. In this regard, tell us and disclose how you account for these
separate deliverables. Refer to EITF 00-21 and FASB ASC 605-25. Also, advise us whether you offer similar extended warranties for other products such as tires and batteries, etc. If so, tell us and disclose your accounting policy for each of these
programs. In your response, tell us and disclose whether you are the primary obligor and how you recognize the revenues and the related costs. To the extent that you are the primary obligor and that these programs are material to your financial
statements, we believe you should disclose how you estimate the warranty obligations including the key assumptions behind the estimates in your critical accounting policies section MD&A. Refer to SEC Release No. 33-8350.

 Response:

 The free technical support services are primarily phone assistance related to product set-up and use, and are performed by a third-party service provider. We do not view this service as a separate unit of
accounting under EITF 00-21 (FASB ASC 605-25), primarily because the amount of separate revenue that one might theoretically separate for this item is insignificant; total costs were approximately $20 million in fiscal 2009. These costs are expensed
as incurred and included in merchandise costs in our Consolidated Statements of Income, which totaled over $62 billion in fiscal 2009.

 Unlike many retailers, the Company does not separately sell “extended warranties” on merchandise it carries. Costco provides a twelve-month warranty following the typical manufacturer’s twelve-month warranty. The costs
related to Costco’s warranty are accrued at the time of sale as a warranty obligation under FAS 5: Accounting for Contingencies (FASB ASC 450-20 and 460-10). We view these costs as an obligation incurred in connection with the sale of certain
electronics items that may require further performance. The warranty repair work is performed by

 7

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

third-party service providers. The accrual is based on our historical experience related to the number of repair incidents and the average repair cost. The estimated warranty cost has averaged
approximately $7 million annually over the last two years. The warranty accrual at the end of fiscal 2009 was approximately $11 million. The above items were not disclosed in our consolidated financial statements due to their immateriality.

 We do not offer a similar warranty program for the vast majority of items that we sell. Based upon the Company’s policy
of member satisfaction, however, we generally accept returns of merchandise. We have a 90-day returns policy on certain electronics items. Our battery and tire warranties relate to the age of the item upon a return. Batteries are generally sold with
a one to three-year life, meaning that any battery returned within the related time frame (warranty period) will receive a full refund, while batteries returned after the warranty period will receive a pro-rated return value in relation to its
stated life. Tires are sold with a road hazard warranty, which will refund the member a pro-rated value based on tread usage and/or months used, assuming the member meets the conditions of the warranty. These adjustments concerning batteries and
tires are included in the sales returns reserve taken at the time of sale.

4.
We note your policy of recognizing membership fees ratably over the one-year membership period. However, we also noted from your company website that it is your
policy to refund membership fees in full at any time. In this regard, expand your disclosures to clarify your cancellation and refund policy for membership fees. In addition, explain to us why it is appropriate under GAAP to recognize membership
fees ratably over the membership period given the full refund policy. Refer to SAB Topic 13.A.4.

 Response:

 It is our policy to refund membership fees in full upon request. We believe it is appropriate under SAB Topic 13.A.4 to
recognize membership fees ratably over the

 8

 H. Christopher Owings, Assistant Director

 United States Securities and Exchange Commission

 February 8, 2010

membership period, as the criteria specified under that topic are all met:

•

 th

Mail Stop 3561           January 21, 2010
Via Facsimile (425) 313-6593 and U.S. Mail

Richard A. Galanti Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, Washington  98027
Re: Costco Wholesale Corporation
Form 10-K for the Fiscal Year Ended August 30, 2009 Filed October 16, 2009 Definitive Proxy Statement on Schedule 14A Filed December 18, 2009
  File No. 000-20355

Dear Mr. Galanti:

 We have reviewed your filings and ha ve the following comments.  You should
comply with the comments in all future filings, if applicable.  Please confirm in writing that you will do so and also explain to us in  sufficient detail how you intend to comply by
providing us with your proposed revisions.  If you disagree, we will consider your
explanation as to why our comments are inappl icable or a revision is  unnecessary.  Please
be as detailed as necessary in your explanat ion.  In some of our comments, we may ask
you to provide us with information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.
  Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filings.  We look forward to working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Richard A. Galanti
Costco Wholesale Corporation January 21, 2010 Page 2  Form 10-K for the Fiscal Year Ended August 30, 2009

 Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 20
1. Please expand this section to discuss known material trends and uncertainties that
will have, or are reasonably likely to have, a material impact on your revenues or income or result in your liquidity decreas ing or increasing in any material way.
We note, for example, that on page 27  you state your net income decreased $0.42
per diluted share in 2009 versus 2008.  You attribute $0.27 of this decrease to
issues involving foreign currencies ( $0.19), litigation ($0.05 ) and insurance
($0.03), but do not discuss the remaining $0.15 per diluted share decrease.  Please
provide additional analysis concerning the quality and variability of your earnings
and cash flows so that investors can ascer tain the likelihood or the extent past
performance is indicative of future pe rformance.  Please discuss whether you
expect levels to remain at this level or  to increase or decrease.  Also, you should
consider discussing the impact of any ch anges on your earnings. Further, please
discuss in reasonable detail:  economic or  industry-wide factor s relevant to your
company, material opportunities, challenges,  and risk in the short and long term
and the actions you are taking to address them.  Refer to Item 303 of Regulation
S-K and SEC Release No. 33-8350.

Notes to Consolidated Financial Statements, page 50

 Note 1 – Summary of Significant Accounting Policies

Property and Equipment, page 52
2. We note the estimated useful lives of your  buildings ranges from 5-50 years.  In
this regard, explain to us the reason for su ch a wide range.  In addition, clarify the
nature of the building structures that fall within the low end of the range and
explain to us why their estimated  useful lives are reasonable.
 Revenue Recognition, page 56

3. We note you offer free technical suppor t services and extended warranties on
electronic products.  In this regard, tell us and disclose how you account for these
separate deliverables.  Refer to EITF 00-21 and FASB ASC 605-25.  Also, advise
us whether you offer similar extended wa rranties for other products such as tires
and batteries, etc.  If so, tell us and disclose your accounting policy for each of
these programs.  In your response, tell  us and disclose whether you are the
primary obligor and how you recognize the reve nues and the related costs.  To the
extent that you are the pr imary obligor and that these programs are material to
your financial statements, we believe you should disclose how you estimate the

Richard A. Galanti
Costco Wholesale Corporation January 21, 2010 Page 3
warranty obligations including the key a ssumptions behind the estimates in your
critical accounting policies section in  MD&A.  Refer to SEC Release No. 33-
8350.
4. We note your policy of recognizing member ship fees ratably over the one-year
membership period.  However, we also noted from your company website that it
is your policy to refund membership fees in full at any time.  In this regard,
expand your disclosures to clarify yo ur cancellation and refund policy for
membership fees.  In addition, explain to us why it is appropriate under GAAP to
recognize membership fees ratably over the membership period given the full refund policy.  Refer to SAB Topic 13.A.4.
5. We note you partnered with American Expr ess in offering the co-branded Costco
True Earnings Cash Rebate Card for purchas es made at Costco and elsewhere.  In
this regard, tell us and disclose the nature of your business relationship or
agreement, if any, with American Express and your accounting for the arrangement.
 Note 5-Leases, page 72

6. We note you classified a majority of your l eases as operating leas es and that their
lease terms would expire through 2049.  Pl ease explain to us how you determined
that their classifications as  operating leases were appropr iate in light of the long
lease terms.  Reference is made to paragraph 7 of SFAS 13 and FASB ASC 840-
10-25.
 Exhibit 31.1 Certifications

7. Please ensure that your certifications appear exactly as set forth in Item
601(b)(31) of Regulation S-K.  For exampl e, we note that you added “annual” to
paragraphs two and three, and deleted pare nthetical phrases from paragraphs 4(d)
and 5.
 Definitive Proxy Statement on Schedule 14A

 Compensation Discussion and Analysis, page 10

8. Please expand your compensation discussion to address the requirements of Item
402(b) of Regulation S-K.  For exampl e, you should discuss the objectives of
your compensation program, what your compensation program is designed to
reward, why you choose to pay each elemen t of your plan and how each element
of compensation fits into your  overall compensation plan.
9. We note your discussion on page 14 regardi ng discretionary cash bonuses paid to
your named executive officers other than Me ssrs. Brotman and Si negal.  You state

Richard A. Galanti
Costco Wholesale Corporation January 21, 2010 Page 4
that “roughly 50% of the bonus potential wa s not achieved due to the Company’s
failure to attain its internal net income  target”, and that eligibility for the
remainder of the cash bonus was based on goa ls relevant to the executive officer’s
area of responsibility.  It does not ap pear that you provided a quantitative
discussion of the terms of these targets and goals.  If you omitted this information because you believe it would result in competitive harm, please tell us your reasons.  Please also discuss how diffic ult it will be going forward to achieve the
target and goal levels or other factors.  Please refer to Instruct ion 4 to Item 402(b)
of Regulation S-K, and Compliance and Disclosure Interpretation, Regulation S-
K, Question 118.04 available on our webs ite at http://www.sec.gov/divisions
/corpfin/cfguidance.shtml.
 Form 10-Q for the Quarterly Period Ended November 22, 2009

10. Please comply with the above comments in  your future quarterly filings to the
extent applicable.

* * *

Please respond to these comments within  10 business days or tell us when you
will provide us with a response.   Please furnish a letter that keys your responses to our
comments and provides any requested information.  Detailed letters greatly facilitate our
review.  Please understand that we may have  additional comments after reviewing your
responses to our comments.
 We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings to be certain that  the filings include all information required
under the Securities Exchange Act of 1934 and that they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the adequacy  and accuracy of the disc losures they have made.
 In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:

• the company is responsible for the adequacy and accuracy of the disclosure in
the filing;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking a ny action with respect to the filing;
and

Richard A. Galanti
Costco Wholesale Corporation January 21, 2010 Page 5
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any pers on under the federal s ecurities laws of
the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.
 You may contact, Scott Stri nger, Staff Accountant , at  (202) 551-3272 or in his
absence Andrew Mew, Accounting Branch  Chief, at (202) 551-3254 if you have
questions regarding comments on the financial statements and related matters.  You may
contact Chris Chase, Staff Attorney, at ( 202) 551-3485 or me at (202) 551-3720 with any
other questions.
Sincerely,

H. Christopher Owings Assistant Director

Mail Stop 3561

        April 4, 2007

By Facsimile and U.S. Mail

Mr. James D. Sinegal
President and Chief Executive Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington   98027

Re:    Costco Wholesale Corporation
          Form 10-K for the Fiscal Year Ended September 3, 2006
          Filed November 17, 2006
          File No.  0-20355

Dear Mr. Sinegal:

            We have completed our review of  your Form 10-K and related filings and have no further
comments at this time.

       S i n c e r e l y ,

       Michael Moran
       Accounting Branch Chief

CORRESP
1
filename1.htm

Correspondence Letter

 Writer’s Direct Number: (425) 313-8203

 Fax: (425) 313-6593

 March 20, 2007

 BY TELECOPIER AND COURIER

 Michael Moran

 Accounting Branch Chief

 United States Securities and Exchange Commission

 Mail Stop 3561

 Washington, D.C. 20549

Re:
Costco Wholesale Corp. — Form 10-K for the Fiscal Year Ended September 3, 2006, filed November 17, 2006, and Form 10-Q for the Fiscal Quarter Ended November 26,
2006, filed December 22, 2006 — File No. 0-20355

 Dear Mr. Moran:

 In response to your letter of March 6, please see the text below, which corresponds to the numbered paragraphs in your letter.

 Form 10-K for the Fiscal Year Ended September 3, 2006

 General

1.
Where a comment below requests additional disclosures to be included, please show us in your supplemental response what the revised disclosures will look like. These additional
disclosures should be included in your future filings.

 Response:

 To the extent requested, revised disclosures will be reflected in future filings.

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

 Consolidated Financial Statements

 Notes to Consolidated Financial Statements

 Note 11 – Staff Accounting Bulletin No. 108, page 71

 2.

 We have read your response to comment 10 of our letter dated January 26, 2007. The SAB 108 transition provisions
provide for a cumulative effect adjustment for errors determined to be immaterial in prior periods under an issuer’s previous and properly applied methodology, and after considering appropriate qualitative factors, but that are material to
those periods based on the guidance of SAB 108. SAB 99 notes that a materiality evaluation must be based on all relevant quantitative and qualitative factors. Based on your facts and circumstances, and given the subject matter of the review, it is
unclear whether the use of the one-time cumulative effect adjustment permitted by SAB is appropriate. Please provide your annual SAB 99 materiality analysis explaining how you determined that all of the errors, not just those related to misdating of
stock option grants, related to each prior period were immaterial on both a quantitative and qualitative basis. Please ensure your response addresses all of the qualitative factors outlined in SAB 99 and any other relevant qualitative factors.
Please also provide additional detail with respect to the adjustments made to the employee grants after the grant date.1

 Response:

The
Company believes that its use of a cumulative one-time adjustment under SAB 108 was appropriate.

 In assessing materiality, we utilized SEC Staff Accounting Bulletin (SAB) No. 99, Topic 1-Letter M (Materiality), including its reference to 5% as a
basis for a preliminary quantitative assessment of materiality. We also considered the listed qualitative factors. The qualitative and quantitative factors are discussed below.

 1

 Please note that the last sentence of this paragraph was revised from the letter we received based on
the advice of Mr. Hobbs.

 2

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

A.
Qualitative Materiality

 Stock-option adjustment.
The Special Committee of the Board of Directors specifically concluded, after considering the requirements of SAB 99, that the errors associated with the stock-option adjustment were not material. It is unlikely that the judgment of investors who
relied on financial statements containing any misstatements arising from unrecorded incremental, non-cash option expense would have been changed or influenced had such expense been reported. As noted below, the estimated compensation expense
(separately and in the aggregate) was very low as a percentage of earnings. The additional option expense in any affected period would not have changed income into a loss. The misstatements did not mask a change in earnings or a failure to meet
analysts’ expectations. Costco’s earnings were increasing during the years in question, and would have increased inclusive of the adjustments made to reflect additional options-related expense. The Company earned 61 cents per share in
fiscal 1996, which increased to $1.53 per share in fiscal 2003. Thus, the effect of the misstatements did not change overall trends in operating results. (See also the graph below.) In addition, management’s compensation arrangements unrelated
to options were not significantly affected by the misstatements. The options program applied broadly across the Company’s workforce and was not focused on a particular business segment that played a unique or significant role in Costco’s
operations. The Special Committee of the Board of Directors found no intentional deviation from generally accepted accounting principles and no reason to believe that management manipulated grants to improve reported financial results. (Notably, the
Company voluntarily began expensing options in fiscal 2003, three years prior to the time it would have been required to do so under FAS 123.) The misstatements did not involve concealment of any unlawful transaction, or affect Costco’s
compliance with any regulatory requirements, loan covenants, or contractual requirements. With respect to the requirements of Sections 13(b)(2)-(7) of the Securities Exchange Act of 1934, any record-keeping issues that contributed to the
identified deficiencies appear to have been isolated to the accounting for compensation expense relating to

 3

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

option grants. Those issues have been corrected to prevent recurrence and have been disclosed by the Company.

 Deferred Tax Liability Adjustment. The Company reduced (in the amount of $31.67 million) its beginning retained earnings for fiscal 2006 for a
historical misstatement in deferred taxes related to unreconciled differences in the detailed records supporting the deferred tax liability for depreciation of property and equipment. This error, discovered in fiscal 2005, involved an overstatement
of the tax basis of our long-lived assets and a corresponding understatement of the Company’s net deferred tax liability. Prior to fiscal 2003, our determination of deferred taxes did not involve a complete reconciliation of the aggregate tax
and book basis of all of our long-lived assets. Rather, we relied upon a reconciliation of the change in basis from one year to the next. Other than isolating the error to a point prior to fiscal year 2003, the Company has not been able to ascertain
in which years the events occurred that gave rise to the overstatement of the tax basis. It has no reason to believe, however, that the error appeared completely or disproportionately within the period 1996-2002. Because this item related to a
timing difference between the tax and book basis of certain assets, we believe that the misstatement did not affect the metrics that management and investors have considered most important in evaluating the financial performance of the Company,
including sales, gross margin, selling, general and administrative expenses, pre-tax income, inventory levels, or inventory losses. Based on available evidence management does not believe that the misstatement was intentional, masked any change in
earnings or other trends, hid a failure to meet consensus earnings expectations, changed a loss into income, uniquely concerned a key business segment, affected compliance with regulatory requirements or Company contracts (including loan covenants),
concealed an unlawful transaction, or increased management’s compensation.

 4

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

 Accounting for Reinsurance Agreements. The Company increased (in the amount of $10.04 million)
its beginning retained earnings for fiscal 2006 related to a correction in the historical accounting treatment of certain finite risk arrangements. Because of the limited amount of risk transfer included in the agreements, historical premium
payments should have been accounted for as a deposit (asset) rather than expensed over the policy term. The misstatement in question affected the years 1995 through and including fiscal 2004 (the treatment was corrected in fiscal 2005). In the
aggregate, the misstatement had the effect of lowering income by $16 million (pre-tax) for the periods 1995 through 2004. It is unlikely that the judgment of investors who relied on financial statements containing any misstatements arising
from the recording of this item as an expense rather than a deposit would have been changed. The reduction in insurance expense and interest income in any affected period due to the misstatement did not change income into a loss or vice versa or
mask a change in earnings or a failure to meet analysts’ expectations. Management’s compensation was not increased as a result of the misstatement, because the misstatement lowered pre-tax income. The misstatements did not involve
concealment of any unlawful transaction, or affect Costco’s compliance with any regulatory requirements, loan covenants, or contractual requirements, or uniquely concerned a key business segment. There was no intentional misstatement –
simply an error of interpretation in applying accounting principles to contracts of insurance.

B.
Quantitative Materiality

 Please note that the aggregate
effects of the SAB 108 items were reported in note 11 of the financial statements for fiscal 2006, and thus investors were able to evaluate not just the quantitative impacts of the adjustments related to stock options but also the quantitative
impacts of the other two adjustments. Note 11 shows that the cumulative effect of the adjustments beyond the option adjustments were modest:

Cumulative Effect as of August 29, 2005

Stock option
grant
practices

Income tax
reserve for
excess
compensation

Deposit
accounting

Deferred
taxes

Total

 Deferred income taxes and other current assets

$
—

$
—

$
16,427

$
—

$
16,427

 Other current liabilities

—

(1,701
)

—

—

(1,701
)

 Deferred income taxes and other liabilities

31,480

—

(6,383
)

(31,667
)

(6,570
)

 Additional paid-in-capital

(147,637
)

—

—

—

(147,637
)

 Retained earnings

116,157

1,701

(10,044
)

31,667

139,481

$
—

$
—

$
—

$
—

$
—

 5

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

 In addition, below we show for fiscal years 1995 through and
including 2005 the income-statement effects each year of the combined stock-option and deposit accounting adjustments.2

 2

 The deferred tax liability adjustment is not reflected for the reason explained above. If the deferred
tax liability adjustment were reflected in fiscal 2005 (the year in which the error was discovered), its impact would not have been material – the adjustment of $31.7 million would have represented less than 3% of net income.

 6

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

 The supporting detail is in the following table:

 Fiscal Year

Net Income As
Reported *

Stock Option
(net of tax)

Deposit
Accounting
(net of tax)

Adjusted
Net Income

Cumulative Errors
as a % of Reported
Net Income

 1995

$
217,241

$
—

$
194

$
217,435

0.09
%

 1996

248,793

(8
)

837

249,622

0.33
%

 1997

312,197

(1,030
)

1,000

312,167

-0.01
%

 1998

459,842

(5,128
)

1,150

455,864

-0.86
%

 1999

515,321

(19,087
)

1,243

497,477

-3.46
%

 2000

631,437

(33,124
)

1,239

599,552

-5.05
%

 2001

602,089

(23,432
)

1,182

579,838

-3.70
%

 2002

699,983

(14,872
)

856

685,967

-2.00
%

 2003

721,000

(9,092
)

1,195

713,103

-1.10
%

 2004

882,393

(6,430
)

1,150

877,113

-0.60
%

 2005

1,063,092

(3,954
)

—

1,059,138

-0.37
%

 Total

$
6,353,388

$
(116,157
)

$
10,044

$
6,247,275

*
Income for fiscal 1995 excludes loss from discontinued operations; fiscal 1999 excludes cumulative effect of accounting change

 The stock option adjustment in the pro forma presentation is based on a graded-vesting method of recognizing compensation expense. (This was the approach
adopted by the Special Committee in its analysis.) The Company’s pro forma FAS 123 footnote disclosures prior to fiscal 2003 were based upon a graded-vesting method. Upon adoption of the fair-value based method of accounting for stock options,
effective September 2, 2002, the Company adopted the straight-line method. Previously, the Company had not adopted an attribution method under APB 25, as historically no stock-based compensation expense was recorded under APB 25. The adjustment
thus could have been based upon either attribution method. Consistent with the approach of the Special Committee, the presentation above uses the graded-vesting method for its analysis. Had the straight-line method been used, the impact on net
income in fiscal 2000, the peak year in the pro-forma table below, would have been lower (by 18 basis points), while other years would not have been materially affected.

 Historically, we followed the “rollover” method of assessing the materiality of prior year misstatements, which included consideration of all relevant quantitative and qualitative factors. When evaluating
these misstatements under the dual method prescribed by SAB 108, we concluded that the cumulative effect of the

 7

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

initial application should be reported in the carrying amounts of assets, liabilities and equity as of the beginning of fiscal 2006, and the offsetting
adjustment should be made to the opening balance of retained earnings, with appropriate disclosure regarding the nature and amount of each individual error being corrected in the cumulative adjustment.

 With “respect to the adjustments made to the employee grants after the grant date,” in December 2006 the Company upwardly adjusted the strike
price of certain options held by US taxpayers that potentially were subject to adverse tax consequences under section 409A of the Internal Revenue Code. For those options that were unvested at December 31, 2004, and remained outstanding at the
date of the repricing, the Company repriced the options and paid employees the aggregate amount of the increased prices in 2007. Below are additional details with respect to the adjustments made to these options, including: (1) the grant dates
affected; (2) the number of options repriced; (3) the original and revised strike price; and (4) the cash payment per share made to nearly all employees.

 Grant Date

Options
Repriced

Original
Strike Price

Revised
Strike Price

Cash
Payment
Made 1

Total Cash
Payment

 03/13/00

567,719

$
43.00

$
49.81

$
6.8125

$
3,642,773

 12/01/00

56,615

$
32.63

$
36.44

$
3.8125

$
215,845

 04/24/01

1,293,569

$
34.28

$
34.74

$
0.4600

$
564,682

 10/09/01

201,264

$
33.54

$
42.41

$
8.8700

$
1,785,212

 04/02/02

2,195,402

$
38.79

$
39.25

$
0.4600

$
964,345

 04/01/03

3,593,633

$
30.41

$
33.75

$
3.3400

$
11,561,854

7,908,202

$
18,734,711

 1

 Per share

 8

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 March 20, 2007

 Form 10-Q for the Fiscal Quarter Ended November 26, 2006

Item 1.
Financial Statements

 Notes to Condensed Consolidated Financial
Statements

 Note 8. Subsequent Event, page 15

3.
We have read your response to comment 11 of our letter dated January 26, 2007 regarding your estimate of an additional $70 million pre-tax charge for adverse employee tax
consequences arising from the misdating of stock option grants. With respect to Internal Revenue Service Code Section 409A, it is our understanding that these regulations existed prior to the completion in October 2006 of

January 142005 David R.Wilson
dwilson@hewrn.com
206-389-4264
Mr.H.Christopher Owings
Assistant Director
Division ofCorporation Finance
Securities andExchange Commission
4505thStreetN.W.
Washington D.C.20549
MailStop3-8
ReCostco Wholesale Corporation
DearMr.Owings
Wearewriting onbehalfofourclient CostcoWholesale Corporation Costco to
discuss stepstobeundertaken inconnection with proposed rescission offertoparticipants
inits401kRetirement Plan thePlan. Wearehopeful thatyouwillconcur withthe
procedures fortheconduct oftherescission offerthatareoutlined inthisletterbutifyou
haveconcerns wewould liketodiscuss themwithyouoryourstaffpriortotheCompanys
filing registration statement withrespect totherescission offer.
Background
Costco maintains 401k Retirement Plan foritsemployees. Oneoftheinvestment
options under thePlanisaninvestment incommon stockofCostco which shares are
purchasedintheopenmarketbytheplantrustee T.Rowe PriceTRP. Costco had
registered shares tobesoldpursuant tothisinvestment andtherelated planinterests on
FormS-8Registration No.33-21093. During 2004Costco discovered thatthenumber of
sharesofCostcocommon stockpurchased inPlan accounts mightunder certain
interpretations ofthelawhaveexceeded thenumber ofshares registered.
OnNovember 16 2004 Costco filed registration statement onFormS-8333-
120523 toregister shares tobepurchased byparticipants inthePlan.Since thepriceof
Costcos common stockgenerally rosethroughout thetwelve-month period ending onthe
date the newFormS-8wasfiledtheRescission Period Costco believes itsultimate
liability intherescission offerwillbeimmaterial toitsfinancial condition orresultsof
operation.
HellerEhmian White McAuliffe LLP333 Bush Street SanFrancisco CA94104-2878 www.hewm.com
SanFrancisco Silicon Valley LosAngeles SanDiego Seattle Portland Anchorage NewYork Washington D.C. Madison
Hong Kong Beijing Singapore Affiliated Offices Milan Paris Rome
CF1-00010891

HellerEhr manJanuary 142005
ATTORNEYS
TRPestimates thatover40000 participants inthePlanpurchased Costco common
stockinPlan accounts during theRescission Period. Virtuallyalloftheseparticipants make
their401kcontributions through bi-weekly payroll deductions sothatduring theyeareach
participant canmakeupto26distinct purchases through thePlan.
Costco intends tofileregistration statement onFormS-3toregister the shares sold
through thePlanduring theRescission Periodandtomake rescission offertothePlan
participants whopurchased sharesofCostcocommon stockin their Plan accounts during the
Rescission Period.
Procedures forRescission Offer
Costco intends toapply thefollowing procedures inconducting therescission offer
1. Participantswhoholdshares purchased during theRescission Periodwhoelect
rescission willberequired toparticipate withrespect toallCostco shares purchased during
theRescission periodandstillowned.
2. Participants whosoldsharesduring theRescission Period andduring the
additional period priortothetermination of therescission offerwillbesubject toFIFO
methodi.e.thefirstsaleduring theRescission Period willbematched withthefirst
purchase during thePeriod andsubsequent saleswillbematched inorder againstpurchases
todetermine thesalepriceofthe shares forcomputation ofrescissory damagesifany.
3.Anytender thatismadepursuant totherescission offerinwhich itis
determined thattherescission proceeds i.e.theaggregate costofshares purchased during
theRescission Period would belessthanthethen market value ofallCostcocommon stock
purchased duringtheRescission Period willberejected.
Theseprocedures should beunobjectionable astheyhavebeenutilized in other
registered rescission offersin similar circumstances. Seeforexample UnionBancal
Corporation Registration No. 333-10998 1.
ProposedAdditional Procedures
Virtually allregistered rescission offersprovide period generally thirtydaysfrom
theeffective dateoftheregistration statement duringwhich offerees maytender theirshares
afterwhich theofferterminates. Under thisapproach thevalueofthesecurity forrescission
purposesisnotknown untiltheofferterminates. Sincerescission offersgenerally provide
thatanytender thatresults inrescission proceeds being lessthanthefairmarket valueofthe
shareswillberejected offerees mightthink itwould bein their bestinterests totender shares
CF1-0001 0892

HellerEhrmanJanuary14OO5
ATTORNEYS
intheofferinordertoobtainanypossible recovery. Similarly anofferee whosoldaffected
shares should alsofileclaimforanylosses incurred.
Costco believes thatiftherescission offerisstructured intheconventional manner
comparison offairmarket value to rescission proceeds notdetermined untiltheconclusion of
theoffer--itishighly likely togenerate significant confusion andquestions amongthe
participants sincetheywillnotknowhowtheywould beaffected byparticipation intheoffer
atthetimetheyhaveto elect to participatebecause themarket valueoftheshareswillnotbe
known. The majority oftheplanparticipants arehourly workers whomaynotbeespecially
sophisticated aboutfinance andsecurities. Theoffering documents under the best of
circumstances arenecessarily voluminous andcomplex. Since themarket value ofCostcos
common stockhasgenerally increased from$33.89 atNovember 172003toover$47
presently Costco isconcerned about theconfusion thatmaybecaused foritsemployees by
anoffertorepurchase shares atsubstantially below current market. Withover40000
affected participants Costco andTRPbelieve thatconsiderable resources willberequired to
respond toinquiries fromparticipants. Theparticipants overwhelmingly arecurrent
employees andCostco isconcerned thatitsemployees willnotfullyunderstand the
motivation fortherescission offerandthat theremaybenegative effectonemployee
morale. Costco believes thisisparticularly trueifthefairmarket value isnotknown atthe
timetheofferismade.Another likely effectofthisconfusion isthatsomeparticipants who
would beeligible torecover fundspursuant totheofferwillfailtoparticipate. TheCompany
isinterested inmaximizing theparticipation ofthosewhoareeligible forrecoveries.
Tosimplify therescission procedures provide morecertainty toparticipantsreduce
thepotential forconfusionamong participants andenhancerecovery byparticipants Costco
proposesthattherescission offering beconducted asfollows
1.Asoftheeffective dateoftheregistration statement Costco andtheTRPwill
examine thetransaction fileofeachaffectedparticipant andbasedonthemarket value of
Costcocommon stockontheeffective daterather thanthirtydayslaterwilldetermine the
amount ofrescissionary damages ifanyforeachparticipant.
2.Thiscalculation willbeprovided toeachparticipant alongwithcopyofthe
prospectusfortheofferandcopyoftheparticipantstransaction statement. Eachparticipant
willbegiven thirty-day period tochallenge thecalculation ofdamages andprovide
evidence toCostco thatthecalculation isincorrect ortooptoutoftheRescission Offer.
3. Costco willnotdirectly repurchase sharesfromtheparticipants accounts but
ratherwillpayintotheparticipants accounts damages inanamount equaltothedifference
between theaggregate purchase pricepaidbyparticipantforpurchases during the
Rescission Periodandthefairmarket value ofthose sharesandinthecaseofparticipants
CF1-0001 0893

HellerEhr manJanuary 142005
ATTORNEYS
whohavesoldatlosstheamount oftheloss incurred. Thesefundswillthenbere-invested
inthePlaninaccordance witheachparticipants current allocation instructions to the
custodian. TheCostco shares purchased during theRescission Period andstillheldwould
remain intheaccounts.
Thisprocedure ofsettling claims without the actual saleofsharesbyparticipants of
willenable thePlantoavoid thepotential needtoimpose blackout periodonparticipant
transactions blackout period thatforadministrative reasons wouldhavetoextend toall
401kparticipantswhether ornottheyareaffectbytheRescission Offer. Itwillalsoavoid
market riskassociated withmovements inthesharepricethatwould occurbeforeTRPgoes
tothemarket tosellshares tendered bytheparticipants. settlement procedurethatdoes
notrequire saleofsharesfromtheparticipants accounts ismostlikelyto effectuate the
participants investment intentions. Becausemanyparticipantsinvesttheircontributions in
fundsotherthan Costco stock saleofshares tendered bytheparticipants andreinvestment
inaccordance withpre-existing investment instructions willnecessarily reduce the
concentration ofCostco shares intheparticipants accounts. Although sophisticated
participantscould rebalance withpost-settlement instructions to TRPmostparticipants likely
willnotavailthemselves ofthisopportunity. Finally settlement procedure thatdoesnot
require thesaleofshares ismoreeasilyunderstood byparticipantsitwould beseenas
simple decision toaccept cashpayment without having toconsider whethertheyotherwise
wouldliketosellalltheCostco shares purchased duringtheRescission Period.
Conclusion
Costco believes thattheprocedures outlined inthis letter willproduce resultthatis
beneficial to itsPlanparticipants andupholds Costcos responsibilities under thesecurities
laws.Theprocedures willresultinlessconfusion toparticipants willresultinprompter
payment wheredamages aredue and willprovidemechanism forparticipants toprotect
theirinterests iftheybelieve Costco haserredinitscalculations. Wehopethatyouwillagree
withCostcos views. In thatevent Costco willproceed tofileitsregistration statement with
respect totherescission offerpromptly. Wewillcontactyoutofollowuponthis letter. In
themeantime ifthereareaspectsoftheproposal thatrequire additional clarification orin
yourviewmodification wewould liketodiscuss these withyoupriortofiling. Please
contact theundersignedat206-389-4264 orJohnSullivan Assistant General Counsel at
CostcoWholesale Corporationat425-427-7577 toarrange mutually convenient timefor
discussion. Ifitwould behelpful tothestafftohaverepresentatives ofthetrustee T.Rowe
Priceparticipate inthecallwecanarrangethat.
CF1-0001 0894

HellerEhrmanJanuary 142005
ATTORNEYS
Fortheconvenience ofthestaffwehaveenclosed sixcopiesofthis letter. Thankyou
foryourconsideration ofCostcos proposal.
Verytrulyyours
IsDavid R.Wilson
David R.Wilson
ccJohnSullivan
SE2070493 v3
1/14/05 142PM25843.0002
CF1-0001 0895

Mail Stop 3561

        March 6, 2007

By Facsimile and U.S. Mail

Mr. James D. Sinegal
President and Chief Executive Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington   98027

Re:    Costco Wholesale Corporation
          Form 10-K for the Fiscal Year Ended September 3, 2006
          Filed November 17, 2006
          Form 10-Q for the Fiscal Quarter Ended November 26, 2006
          Filed December 22, 2006
          File No.  0-20355

Dear Mr. Sinegal:

            We have reviewed your response letter dated February 9, 2007 and have the following
comments.  We have limited our review to only your financial statements and related disclosures and do not intend to expand our review to othe r portions of your documents.  Where indicated,
we think you should revise your documents in response to these comments.  If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.  After reviewing this information, we may raise additional comments.

Form 10-K for the Fiscal Year Ended September 3, 2006

General

1. Where a comment below requests additional disclosures to be included, please show us in your supplemental response what the revised disclosures will look like.  These additional disclosures should be included in your future filings.

Consolidated Financial Statements

Mr. James D. Sinegal     Costco Wholesale Corporation    March 6, 2007 Page 2

Notes to Consolidated Financial Statements

Note 11 – Staff Accounting Bulletin No. 108, page 71

2. We have read your response to comment 10 of our letter dated January 26, 2007.  The SAB 108 transition provisions provide for a cumulative effect adjustment for errors determined to be immaterial in prior periods under an issuer’s previous and properly applied methodology, and after considering appropriate qualitative factors, but that are material to those periods based on the guidance of SAB 108.  SAB 99 notes that a materiality evaluation must be based on all relevant quantitative and qualitative factors.  Based on your facts and circumstances, and given the subject matter of the review, it is unclear whether the use of the one-time cumulative effect adjustment permitted by SAB 108 is appropriate.  Please provide your annua l SAB 99 materiality analysis explaining
how you determined that all of the errors, not just those related to misdating of stock option grants, related to each prior period were immaterial on both a quantitative and qualitative basis.  Please ensure your response addresses all of the qualitative factors outlined in SAB 99 and any other relevant qualitative factors.  Please also provide additional detail with respect to the employee grants after the grant date.

Form 10-Q for the Fiscal Quarter Ended November 26, 2006

Item 1.  Financial Statements

Notes to Condensed Consolidated Financial Statements

Note 8.  Subsequent Event, page 15

3. We have read your response to comment 11 of our letter dated January 26, 2007 regarding your estimate of an additional $70 million pre-tax charge for adverse employee tax consequences arising from the misdating of stock option grants.  With respect to Internal Revenue Service Code Section 409A, it is our understanding that these regulations existed prior to the completion in October 2006 of your internal review of stock option grant practices.  Please clarify to  us what options were being discussed by
management during the course of the internal review with regard to employee tax liabilities.  Please tell us if the report prepared by the Special Committee reviewing the stock option grant practices discussed the adverse tax consequences facing your employees, and perhaps made any recommendations regarding these employee tax liabilities.

General

Mr. James D. Sinegal     Costco Wholesale Corporation    March 6, 2007 Page 3

            Please send us your response to our comments within ten business days from the date of this letter.  You should provide a cover letter keying your response to our comments, and provide the requested supplementary information, if any.  Where our comment requests you to revise future filings, we would expect that information to be included in your next filing.  If you believe complying with a comment is not appropriate, please tell us why in your letter. Your supplemental response should be submitted in electronic form on EDGAR as a correspondence file.  Refer to Rule 101 (a) of Regulation S-T.

           You may contact Milwood Hobbs, Staff Accountant, at (202) 551-3241 or Donna Di Silvio, Senior Staff Accountant, at (202) 551-3202, if you have questions regarding comments
on the financial statements and related matters.  Please contact me at (202) 551-3725 with any other questions.

       S i n c e r e l y ,

       Michael Moran
       Accounting Branch Chief

CORRESP
1
filename1.htm

Correspondence Letter

 Writer’s Direct Number:

(425) 313-8203

 Fax:

(425) 313-6593

 February 9, 2007

 BY TELECOPIER AND COURIER

 Michael Moran

 Accounting Branch Chief

 United States Securities and Exchange Commission

 Mail Stop 3561

 Washington, D.C. 20549

Re:

Costco Wholesale Corp. — Form 10-K for the Fiscal Year Ended September 3, 2006, filed November 17, 2006, and Form 10-Q for the Fiscal Quarter Ended November 26,
2006, filed December 22, 2006 — File No. 0-20355

 Dear Mr. Moran:

 In response to your letter of January 26, please see the text below, which corresponds to the numbered paragraphs in your
letter.1

 Form 10-K
for the Fiscal Year Ended September 3, 2006

 Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of
Operations

 Results of Operations, page 16

2.

You disclose that net sales increased 13.7% during fiscal 2006, or $7.1 billion and provide several business reasons for the overall change such as new store openings and the
additional week of sales in 2006. However, except for gasoline, you do not provide any quantification of the impact of the other business reasons by disclosing the specific dollar amounts attributable to each of the other reasons so that

 1

 We advised Mr. Milwood Hobbs on February 1 that we would be responding by February 9
rather than by the deadline requested in the letter.

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

investors can better understand what factors caused most of the $7.1 billion change during 2006. Please revise your disclosure to include the amount of
each significant change in line items between periods and relate it to the business reasons for it. In circumstances where there is more than one business reason for the change during the fiscal year such as in 2006, please quantify the incremental
impact of each individual business reason discussed. Please also carefully review each expense category being analyzed and revise your discussion of changes in expenses to address this comment. Refer to Item 303(a)(3) of Regulation S-K.

 Response: This provision of Regulation S-K provides: “To the extent that the financial statements disclose
material increases in net sales . . . , provide a narrative discussion of the extent to which such increases are attributable to increases in prices or to increase in the volume or amount of goods or services being sold or to the introduction of new
products or services.” While we believe that our prior disclosures satisfied this standard, a revised disclosure concerning the discussion of sales is included below. Please note also that page 4 in Item 1 contained detail concerning the
percentage of net sales accounted for by major categories for three fiscal years, enabling investors to see whether there has been any change in the mix of goods sold. We have not specifically quantified the impacts of average ring and traffic
counts because the methods of calculation are not sufficiently determinate to support such detail (due to the disparate places within the warehouse that may ring up sales by a member during a single visit). We have reviewed expense categories, as
requested, and do not believe that additional disclosure is required. Current disclosures concerning expense levels contain detail in many cases down to the single basis point level.

 Proposed disclosure:

 Net Sales

Fiscal 2006

Fiscal 2005

Fiscal 2004

 Net sales

$
58,963,180

$
51,879,070

$
47,148,627

 Net sales increase

13.7
%

10.0
%

13.1
%

 Increase in comparable warehouse sales

8
%

7
%

10
%

 Warehouse openings (net of relocations)

25

16

20

 2

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

 2006 vs. 2005

 Net sales increased to $58.96 billion in fiscal 2006, from $51.88 billion in fiscal 2005. The 13.7% increase was primarily due to: 8% comparable warehouse sales growth (6.5% excluding gasoline and 7.2% excluding
effects from stronger foreign currencies); 3.7% from the opening of 25 net new warehouses (28 opened, 3 closed due to relocations); and 2% from an additional week in fiscal 2006 as compared to the prior year. Most of the comparable sales growth
derived from increased amounts spent by members visiting our warehouses; increases in frequency of shopping contributed slightly. Comparable sales growth was slightly offset by cannibalization (established warehouses losing sales to our newly opened
locations).

 Changes in prices of merchandise, with the exception of gasoline, did not materially affect the sales increase. Gasoline sales
contributed approximately 235 basis points to total sales growth in fiscal 2006, with 70% related to the increase in gasoline sales prices.

 Net Sales

3.

You disclose that the increase of 8% comparable sales was a major contributor to your growth in net sales. Further, your disclosure throughout the filing appears to indicate that
your increase in gasoline sales was a significant contributor to the overall increase in net sales for fiscal 2006. In this regard, and given the wide fluctuations in gasoline prices during recent years, please tell us if consideration has been
given to presenting a second calculation of the change in comparable warehouse sales that excludes gasoline sales. By presenting a second calculation of comparable warehouse sales without gasoline sales investors should be able to better understand
this very important key retail statistic. Refer to Item 303(a)(3)(iii) of Regulations S-K.

 Response: This comment is
addressed in the proposed disclosure provided above.

 3

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

 Critical Accounting Policies, page 27

 General

4.

We note your disclosure in Form 10-Q filed on December 22, 2006 in Management’s Discussion and Analysis on page 18 that certain annual payroll related expenses relating
to warehouse and central operating costs have been estimated for the entire fiscal year and allocated evenly over 13 periods. Please explain to us more clearly the nature of the cost being estimated, provide us support for the impact of this process
on quarterly results, and the reason why you do not disclose the process of estimating these amounts as a critical accounting policy.

 Response: In the first fiscal quarter of 2007, as disclosed in the Form 10-Q, we revised the method of allocating among quarters certain payroll-related expenses. The primary components of this change were payroll
taxes and the Company’s discretionary 401(k) match. Our fiscal year ends in August whereas certain payroll-related expenses are incurred (and reset annually) based on the calendar year. For example, our discretionary 401(k) employer match is
calculated based on the employee’s calendar year earnings. Since there is a ceiling on the match, many employees “max-out” on the match in the first half of the calendar year.

 Our prior method allocated these costs over our fiscal year by estimating, again using the 401(k) example, our expected total discretionary employer match
as a percentage of our total payroll for the fiscal year, and then charging each period a pro-rata amount based on the payroll expense for that period. Under our new method, the charge recorded each period is based on the amount incurred to date.

 As shown in the following table, the difference between our prior method and our revised method is relatively small in each quarter and
there is no difference on an annual basis. However, in our first quarter, the impact improved our reported EPS by $.01. In the interest of transparency, we decided to disclose the change.

 The impact of this change on fiscal 2006 is as follows:

 4

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

 Fiscal
2006

 Component

 Q1

 Variance

 Q2

 Variance

 Q3

 Variance

 Q4

 Variance

 Total

 Variance

 401(k)

$
6,179

$
(5,244
)

$
(4,780
)

$
3,845

$
—

 Payroll Taxes

1,797

(3,119
)

(5,785
)

7,107

—

 Other

1,122

4,976

(4,472
)

(1,626
)

—

 Total

$
9,098

$
(3,387
)

$
(15,037
)

$
9,326

$
—

 The Company did not consider this item to be one of its critical accounting policies, because the
total annual expense ultimately recognized each fiscal year is unaffected by this treatment.

 Item 9A-Controls and Procedures

 Disclosure Controls and Procedures, page 32

5.

We note that you state that your disclosure controls and procedures are effective in ensuring that information required to be disclosed is recorded, processed, summarized and
reported within the time periods specified. If you choose to include the definition of disclosure controls and procedures, please include the entire definition. In this regard, in future filings, please revise to clarify, if true, that your officers
concluded that your disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that you file or submit under the Exchange Act is accumulated and communicated to your management, including
your principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

 Response: Future disclosures will be revised accordingly.

 Consolidated Financial Statements

 Notes to Consolidated Financial Statements

 Note 1 – Summary
of Significant Accounting Policies

 Vendor Rebates and Allowances, page 46

 Marketing and Promotional Expenses, page 51

6.

 We note from your disclosure that you receive certain vendor allowances and credits in connection with the sale and promotion of certain vendor products.
Please

 5

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

tell us if any of the amounts received from vendors relate to any cooperative advertising, marketing or promotional programs that vendors participate in
with you. In this regard, please tell us and disclose the amount of cooperative advertising reimbursements that may be netted against gross advertising expense. In addition, we believe you should also include in your revised footnote disclosure the
following additional information:

•

 the number of vendors and the length of time of the agreements;

•

 the terms (length of time) and conditions of the agreements;

•

 whether or not management would continue to incur the same level of advertising expenditures even if vendors discontinued their support;

•

 if management cannot represent that they will continue to incur similar levels of advertising expenditures in the absence of these vendor agreements, please
discuss in management’s discussion and analysis that reductions in the current level of advertising expenditures may adversely affect revenues; and

•

 the dollar amount of the excess reimbursements, if any, over costs incurred that are recorded as a reduction of cost of sales.

Refer to EITF 02-16 and paragraph .49 of SOP 93-7 relating to gross advertising costs.

 Response: Certain amounts received from vendors do relate to marketing and promotional programs. For example, promotional programs include endcaps,
product demonstrations and coupon mailings, which are often funded entirely by vendors. These amounts are generally credited to cost of sales at the time the merchandise is sold in accordance with EITF 02-16. The Company does not, however, generally
engage in cooperative advertising. The Company is quite unlike other retailers in that we are not paying third-party print, broadcast or internet media to advertise our products or services. The Company does publish and circulate to certain Costco
members, free of charge, the Costco Connection (a monthly lifestyle magazine), an annual cookbook, and limited other publications. We receive funds from the vendors that choose to advertise in these publications, generally as dictated by a rate card
or

 6

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

similar mechanism and not based on an agreement that the vendor will bear a specific percentage of expense incurred. In accordance with EITF 02-16, because
the vendor funds reimburse specific, identifiable and incremental costs incurred by the Company to sell the vendors products, we account for the receipt of a portion of the funds received from vendors as a reduction of our costs associated with
these publications. Funds received in excess of these costs are classified as a reduction of cost of sales over the time period the merchandise advertised is sold. Excess funds related to our publishing activities are approximately .09 basis points
of total consolidated cost of sales, which we deemed immaterial and not requiring disclosure.

 Goodwill, page 48

7.

Please disclose when you perform your annual test of goodwill for impairment. See paragraph 26 of SFAS 142.

 Response: The Company reviews previously reported goodwill for impairment in the fourth quarter of each fiscal year, or more frequently if circumstances
dictate. Future disclosures will be revised accordingly.

 Revenue Recognition, page 50

8.

You disclose that for certain merchandise sales you evaluate the criteria outlined in EITF 99-19 in determining whether it is appropriate to record the gross amount of the
merchandise sales and related costs or the net amount earned as commissions. Please clarify for us and revise your disclosure to identify the types of merchandise sales as opposed to services rendered which require this type of evaluation and the
amount of commissions classified in net sales for all periods presented.

 Response: The following types of merchandise
may, depending upon the particular facts and circumstances, require accounting on a net basis: event tickets (such as movie theatres and theme parks); gift certificates (for restaurants, resorts, and merchandise) and pre-paid phone cards.

 7

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

 The net commissions earned on items not meeting the criteria for gross treatment in fiscal 2006 were
less than 0.2 basis points of total consolidated sales, which we deemed immaterial and not requiring disclosure.

 Note 10 – Commitments and
Contingencies, page 70

9.

We note your disclosure of the matters in which you are a defendant. In future filings, please expand your disclosure to provide an estimate of the possible loss or range of loss
or clearly state that an estimate can not be made. See SFAS 5, paragraph 10.

 Response: Future disclosures will be revised
accordingly.

 Note 11 – Staff Accounting Bulletin No. 108, page 71

10.

We note your adoption of SAB 108 and your disclosure on page 72 of the net after-tax effect of the adjustment on reported net income representing a total adjustment of $116
million. In connection with our review of this information, please provide us by year the amount of the before-tax effect of the adjustment by year, including the separate before-tax and after-tax amounts for each year within the period 1996 through
2001.

 Response: See below.

Incremental Expense (000’s)

 Fiscal Year

Net Book
Expense

Tax
Deduction

Net

 Fiscal 1996

$
12

$
4

$
8

 Fiscal 1997

$
1,540

$
510

$
1,030

 Fiscal 1998

$
7,769

$
2,641

$
5,128

 Fiscal 1999

$
28,752

$
9,665

$
19,087

 Fiscal 2000

$
49,521

$
16,397

$
33,124

 Fiscal 2001

$
34,973

$
11,540

$
23,432

 Fiscal 2002

$
22,016

$
7,144

$
14,872

 Fiscal 2003

$
13,386

$
4,294

$
9,092

 Fiscal 2004

$
9,572

$
3,142

$
6,430

 Fiscal 2005

$
5,853

$
1,900

$
3,954

 Total

$
173,394

$
57,237

$
116,157

 8

 Michael Moran, Accounting Branch Chief

 United States Securities and Exchange Commission

 February 9, 2007

 Form 10 – Q for the Fiscal Quarter Ended November 26, 2006

 Item

Mail Stop 3561

        January 26, 2007

By Facsimile and U.S. Mail

Mr. James D. Sinegal
President and Chief Executive Officer
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington   98027

Re:    Form 10-K for the Fiscal Year Ended September 3, 2006
          Filed November 17, 2006
          Form 10-Q for the Fiscal Quarter Ended November 26, 2006
          Filed December 22, 2006
          File No.  0-20355

Dear Mr. Sinegal:

            We have reviewed your filings and have the following comments.  We have limited our
review to only your financial statements and related disclosures and do not intend to expand our review to other portions of your documents.  Where indicated, we think you should revise your documents in response to these comments.  If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.  After reviewing this information, we may raise additional comments.

              Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings.  We look forward to working with you in these respects.  We welcome any questions you may have about our comments or on a ny other aspect of our review.  Feel free to
call us at the telephone numbers listed at the end of this letter.

Form 10-K for the Fiscal Year Ended September 3, 2006

General

1. Where a comment below requests additional disclosures to be included, please show us in your supplemental response what the revised disclosures will look like.  These additional disclosures should be included in your future filings.

Item 7 – Management’s Discussion and Analys is of Financial Condition and Results of
Operations

Mr. James D. Sinegal     Costco Wholesale Corporation    January 26, 2007 Page 2

Results of Operations, page 16

General

2. You disclose that net sales increased 13.7% during fiscal 2006, or $7.1 billion and provide several business reasons for the overall change such as new store openings and the additional week of sales in 2006.  However, except for gasoline, you do not provide any quantification of the impact of the other business reasons by disclosing the specific dollar amounts attributable to each of the other reasons so that investors can better understand what factors caused most of the $7.1 billion change during 2006.  Please revise your disclosure to include the amount of each significant change in line items between periods and relate it to the business reasons for it.  In circumstances where there is more than one business reason for the change during the fiscal year such as in 2006, please quantify the incremental impact of each individual business reason discussed.  Please also carefully review each expense category being analyzed and revise your discussion of changes in expenses to address this comment.  Refer to Item 303(a)(3) of Regulation S-K.

Net Sales

3. You disclose that the increase of 8% comparable sales was a major contributor to your growth in net sales.  Further, your disclosure throughout the filing appears to indicate that your increase in gasoline sales was a significant contributor to the overall increase in net sales for fiscal 2006.  In this regard, and given the wide fluctuations in gasoline prices during recent years, please tell us if consideration has been given to presenting a second calculation of the change in comparable warehouse sales that excludes gasoline sales.  By presenting a second calculation of comparable warehouse sales without gasoline sales investors should be able to better understand this very important key retail statistic.  Refer to Item 303(a)(3)(iii) of Regulation S-K.

 Critical Accounting Policies, page 27

General

4. We note your disclosure in Form 10-Q filed on December 22, 2006 in Management’s Discussion and Analysis on page 18 that certain annual payroll related expenses relating to warehouse and central operating costs have been estimated for the entire fiscal year and allocated evenly over 13 periods.  Please explain to us more clearly the nature of the costs being estimated, provide us support for the impact of this process on quarterly results, and the reason why you do not disclose the process of estimating these amounts as a critical accounting policy.

Item 9A – Controls and Procedures

Mr. James D. Sinegal     Costco Wholesale Corporation    January 26, 2007 Page 3

Disclosure Controls and Procedures, page 32

5. We note that you state that your disclosure controls and procedures are effective in ensuring that information required to be disclosed is recorded, processed, summarized and reported within the time periods specified.  If you choose to include the definition of disclosure controls and procedures, please include the entire definition.  In this regard, in future filings, please revise to clarify, if true, that your officers concluded that your disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that you file or submit under the Exchange Act is accumulated and communicated to your management, including your principal executive and principal financial officer, to allow timely decisions regarding required disclosure.

Consolidated Financial Statements

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

Vendor Rebates and Allowances, page 46
Marketing and Promotional Expenses, page 51

6. We note from your disclosure that you receive certain vendor allowances and credits in connection with the sale and promotion of certain vendor products.  Please tell us if any of the amounts received from vendors relate to any cooperative advertising, marketing or promotional programs that vendors participate in with you.  In this regard, please tell us and disclose the amount of cooperative advertising reimbursements that maybe netted against gross advertising expense.  In addition, we believe you should also include in your revised footnote disclosure the following additional information:

• the number of vendors and the length of time of the agreements;
• the terms (length of time) and conditions of the agreements;
• whether or not management would continue to incur the same level of advertising expenditures even if vendors discontinued their support;
• if management cannot represent that they will continue to incur similar levels of advertising expenditures in the absence of these vendor agreements, please discuss in management’s discussion and analysis that reductions in the current level of advertising expenditures may adversely affect revenues; and
• the dollar amount of the excess reimbursements, if any, over costs incurred that are recorded as a reduction of cost of sales.

Refer to EITF 02-16 and paragraph .49 of SOP 93- 7 relating to gross advertising costs.

Mr. James D. Sinegal     Costco Wholesale Corporation    January 26, 2007 Page 4

 Goodwill, page 48

7. Please disclose when you perform your annual test of goodwill for impairment. See paragraph 26 of SFAS 142.

Revenue Recognition, page 50

8. You disclose that for certain merchandise sales you evaluate the criteria outlined in EITF 99-19 in determining whether it is appropriate to record the gross amount of the merchandise sales and related costs or the net amount earned as commissions.  Please clarify for us and revise your disclosure to identify the types of merchandise sales as opposed to services rendered which require this type of evaluation and the amount of commissions classified in net sales for all periods presented.

Note 10-Commitments and Contingencies, page 70

9. We note your disclosure of the matters in which you are a defendant.  In future filings, please expand your disclosure to provide an estimate of the possible loss or range of loss or clearly state that an estimate can not be made.  See SFAS 5, paragraph 10.

Note 11 – Staff Accounting Bulletin No. 108, page 71

10. We note your adoption of SAB 108 and your disclosure on page 72 of the net after-tax effect of the adjustment on reported net income representing a total adjustment of $116 million.  In connection with our review of this information, please provide us by year the amount of the before-tax effect of the adjustment by year, including the separate before-tax and after-tax amounts for each year within the period 1996 through 2001.

Form 10-Q for the Fiscal Quarter Ended November 26, 2006

Item 1.  Financial Statements

Notes to Condensed Consolidated Financial Statements

Note 8.  Subsequent Event, page 15

11. We note your estimate of an additional $70 million pre-tax charge relating to your review of stock option grants, in addition to the $116 million adjustment to retained earnings disclosed in Note 11 of Form 10-K for the year ended September 3, 2006.  Please explain to us the nature of the charge.  If this charge will reflect additional unrecorded compensation expense related to prior periods, please state that fact.  In addition, please explain why you did not consider an estimate of this charge along with your other adjustments.  Please also provide us the before-tax amount of the adjustment by year for

Mr. James D. Sinegal     Costco Wholesale Corporation    January 26, 2007 Page 5

 the $70 million.  Tell us your estimate of the amount of the charge that would relate to employees outside the United States.

Item 2.  Management’s Discussion and Analys is of Financial Condition and Results of
Operations

Results of Operations

Selling, General and Administrative Expenses, page 18

12. We note your disclosure that during the fi rst quarter of fiscal 2007 you changed your
method of allocating certain payroll-related expenses.  You also state that historically certain costs were estimated for the entire fiscal year and then recognized over 13 periods.  Please tell us the nature of the certain payroll expenses and costs that had been estimated for the entire year.  Provide us with a more comprehensive description of your process of estimating annual warehouse and central operating costs and your basis for recognizing the costs over 13 periods instead of when they were actually incurred.  In addition, please explain your new approach for aligning these expenses with the period in which they are actually incurred.  Tell us the dollar impact this new approach had on your results of operations for the quarter ended November 26, 2006.

General

           We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing reviewed by the staff to be certain that they have provided all information investors require for an informed decision.  Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

           In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:

• the company is responsible for the adequacy and accuracy of the disclosures in the filing;

• staff comments or changes to disclosure in  response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

• the company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

           In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Division of Corporation Finance in connection with our review of your filings or in response to our comments on your filings.

Mr. James D. Sinegal     Costco Wholesale Corporation    January 26, 2007 Page 6

            Please send us your response to our comments within ten days from the date of this letter.  You should provide a cover letter keying your response to our comments, and provide the requested supplementary information, if any.  Where our comment requests you to revise future filings, we would expect that information to be included in your next filing.  If you believe complying with a comment is not appropriate, please tell us why in your letter. Your supplemental response should be submitted in electronic form on EDGAR as a correspondence file.  Refer to Rule 101 (a) of Regulation S-T.

           You may contact Milwood Hobbs, Staff Accountant, at (202) 551-3241 or Donna Di Silvio, Senior Staff Accountant, at (202) 551-3202, if you have questions regarding comments
on the financial statements and related matters.  Please contact me at (202) 551-3725 with any other questions.

       S i n c e r e l y ,

       Michael Moran
       Accounting Branch Chief

CORRESP
1
filename1.htm

Costco Wholesale Corporation

999 Lake Drive

Issaquah, WA 98027

August 18, 2005

Via EDGAR

Securities and Exchange Commission

Division of Corporation Finance

Washington, D.C.  20549

            Attn: Mr. Pradip Bhaumik, Attorney-Advisor

Costco Wholesale Corporation

Registration Statement on Form S-3

 File No. 333-125637

Ladies and Gentlemen:

Pursuant to Rule 461 under the Securities Act Costco Wholesale Corporation (the “Company”) hereby requests hereby requests that the effectiveness of the Registration Statement on Form S-3 (File No. 333-125637) be accelerated so that it will become effective at 5 p.m., Washington, D.C. time, on August 19, 2005, or as soon thereafter as practicable.

The Company acknowledges that:

            •

            Should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

            •

            The action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its fully responsibility for the adequacy and accuracy of the disclosure in the filing; and

            •

            The Company may not assert this action as defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Sincerely,

Costco Wholesale Corporation

/s/ Richard J. Olin

Richard J. Olin

Vice President and General Counsel

IMS_Last_Page

CORRESP
1
filename1.htm

            August 17, 2005

            David R. Wilson

David.Wilson@hellerehrman.com
 Direct +1.206.389.4264
 Direct Fax +1.206.515.8918

Main +1.206.447.0900
 Fax +1.206.447.0849

Mr. H. Christopher Owings

Assistant Director

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

            Mail Stop 3561

            Re:

            Costco Wholesale Corporation

Registration Statement on Form S-3

Filed June 8, 2005

File No. 333-125637

Dear Mr. Owings:

We are in receipt of the staff's comment letter dated August 15, 2005 with respect to the above-referenced registration statement.  Registrant has filed Amendment No. 3 to its Registration Statement, which contains revised disclosure in response to the staff's comments.  Registrant has responded to the staff's comments as set forth below.

The Rescission Offer, page 23

Background and Reasons for the Rescission Offer, page 23

            1.

            Please refer to comment 2 in our letter dated August 2, 2005.  Please add in the interest rate related to rescission offers for the District of Columbia in the table on page 25.

Response:  We have included the interest rate for the District of Columbia in the table.

The Terms of the Rescission Offer, page 24

            .

            In the legality opinion, counsel assumes that you have issued shares in accordance with your articles of incorporation and bylaws, and any related

            Heller Ehrman LLP

            701 Fifth Avenue, Suite 6100

            Seattle, WA  98104-7098

            www.hellerehrman.com

Anchorage Beijing Hong Kong Los Angeles Madison, WI New York San Diego San Francisco Seattle

            Silicon Valley

            Singapore

            Washington, D.C.

agreements.  This is an inappropriate assumption as counsel assumes material facts underlying the opinion.  Please revise.

Response:  The opinion as filed did not make the assumption stated in the comment.  The opinion assumed that the shares were issued in accordance with the Plan.  The opinion has been revised to remove that assumption.  The staff should be aware that none of the shares purchased by the 401(k) Plan for participants' accounts were issued by the Company to the Plan.  Instead, all of the shares were purchased by the Plan administrator in the market.  Accordingly, if these shares had registered on Form S-8 prior to purchase by the Plan, under Item 8 of Form S-8, an opinion would not have been required.

We intend to seek acceleration of the effectiveness of the registration statement as soon as the staff has advised us that it has no further comments.  Please address any additional questions or comments to the undersigned by telephone at (206) 389-4264 or by fax at (206) 447-0849.

            Sincerely,

            /s/ David R. Wilson

            David R. Wilson

cc:  Mr. John Sullivan

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 3561
August 15, 2005

Richard J. Olin
Vice President and General Counsel
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington 98027

      Re:	Costco Wholesale Corporation
		Amendment No. 3 to Registration Statement on Form S-3
      Filed August 8, 2005
		File No. 333-125637

Dear Mr. Olin:

      We have limited our review of your filing to those issues we
have addressed in our comments.  Where indicated, we think you
should
revise your document in response to these comments.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure.  After reviewing this information, we may raise
additional comments.  Feel free to call us at the telephone
numbers
listed at the end of this letter.

The Rescission Offer, page 23

Terms of the Rescission Offer, page 24
1. Please refer to comment 2 in our letter dated August 2, 2005.
Please add the interest rate related to rescission offers for the
District of Columbia in the table on page 25.

Exhibit 5.1
2. In the legality opinion, counsel assumes that you have issued
shares in accordance with your articles of incorporation and by-
laws,
and any related agreements.  This is an inappropriate assumption
as
counsel assumes material facts underlying the opinion.  Please
revise.

* * * * *

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

      Please contact Pradip Bhaumik, Attorney-Advisor, at (202)
551-
3333, Ellie Quarles, Special Counsel, at (202) 551-3238 or me at
(202) 551-3720 with any other questions.

      					Sincerely,

						H. Christopher Owings
      					Assistant Director

cc: 	David R. Wilson, Esq.
	Heller Ehrman LLP
      Fax: (206) 447-0849

??

??

??

??

Richard J. Olin
Costco Wholesale Corporation
August 15, 2005
Page 1

</TEXT>
</DOCUMENT>

CORRESP
1
filename1.htm

            August 8, 2005

            David R. Wilson

David.Wilson@hellerehrman.com
 Direct +1.206.389.4264
 Direct Fax +1.206.515.8918

Main +1.206.447.0900
 Fax +1.206.447.0849

Mr. H. Christopher Owings

Assistant Director

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

            Mail Stop 3561

            Re:

            Costco Wholesale Corporation

Registration Statement on Form S-3

Filed June 8, 2005

File No. 333-125637

Dear Mr. Owings:

We are in receipt of the staff's comment letter dated June 30, 2005 with respect to the above-referenced registration statement.  Registrant has filed Amendment No. 3 to its Registration Statement, which contains revised disclosure in response to the staff's comments.  Registrant has responded to the staff's comments as set forth below.

The Rescission Offer, page 23

Background and Reasons for the Rescission Offer, page 23

            1.

            Please refer to comment 6 in our letter dated June 30, 2005.  At the beginning of the third paragraph on page 23, please make it clear that you may have violated Section 5.  The present language only implies that you are required to register under Section 5 the securities you have issued.  Please revise.

Response:  We have included a statement that the Company may have violated Section 5 on page 23 of the prospectus

The Terms of the Rescission Offer, page 24

            Heller Ehrman LLP

            701 Fifth Avenue, Suite 6100

            Seattle, WA  98104-7098

            www.hellerehrman.com

Anchorage Beijing Hong Kong Los Angeles Madison, WI New York San Diego San Francisco Seattle

            Silicon Valley

            Singapore

            Washington, D.C.

            2.

            Please refer to comment 10 in our letter dated June 30, 2005.  We understand that it is your position that you are not obligated to use the interest rate set by states for purposes of rescission offers.  Although you have changed the interest rate to match the statutory rate in California, it appears that you may have to make the rescission offer in other states as well.  Investors are entitled to compare the rate you are offering with those mandated by other states where the offer is made.  We reissue the comment.

Response:  We have added a table showing the applicable interest rate for each state on page 25 of the prospectus.

            3.

            Per an oral comment from Mr. Pradip Bhaumik subsequent to your letter, a validity opinion with respect to the shares being registered is included as an exhibit.

We intend to seek acceleration of the effectiveness of the registration statement as soon as the staff has advised us that it has no further comments.  Please address any additional questions or comments to the undersigned by telephone at (206) 389-4264 or by fax at (206) 447-0849.

            Sincerely,

            David R. Wilson

cc:  Mr. John Sullivan

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 3561
August 2, 2005

Richard J. Olin
Vice President and General Counsel
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington 98027

      Re:	Costco Wholesale Corporation
		Amendment No. 2 to Registration Statement on Form S-3
      Filed July 19, 2005
		File No. 333-125637

Dear Mr. Olin:

      We have limited our review of your filing to those issues we
have addressed in our comments.  Where indicated, we think you
should
revise your document in response to these comments.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure.  After reviewing this information, we may raise
additional comments.  Feel free to call us at the telephone
numbers
listed at the end of this letter.

The Rescission Offer, page 23

Background and Reasons for the Rescission Offer, page 23
1. Please refer to comment 6 in our letter dated June 30, 2005.
At
the beginning of the third paragraph on page 23, please make it
clear
that you may have violated Section 5.  The present language only
implies that you are required to register under Section 5 the
securities you have issued.  Please revise.

Terms of the Rescission Offer, page 24
2. Please refer to comment 10 in our letter dated June 30, 2005.
We
understand that it is your position that you are not obligated to
use
the interest rate set by states for purposes of rescission offers.
Although you have changed the interest rate to match the statutory
rate in California, it appears that you may have to make the
rescission offer in other states as well.  Investors are entitled
to
compare the rate you are offering with those mandated by other
states
where the offer is made.  We reissue the comment.

* * * * *

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

      Please contact Pradip Bhaumik, Attorney-Advisor, at (202)
551-
3333, Ellie Quarles, Special Counsel, at (202) 551-3238 or me at
(202) 551-3720 with any other questions.

      					Sincerely,

						H. Christopher Owings
      					Assistant Director

cc: 	David R. Wilson, Esq.
	Heller Ehrman LLP
      Fax: (206) 447-0849

??

??

??

??

Richard J. Olin
Costco Wholesale Corporation
August 2, 2005
Page 1

</TEXT>
</DOCUMENT>

CORRESP
1
filename1.htm

July 19, 2005

Mr. H. Christopher Owings

Assistant Director

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

            Mail Stop 3561

            Re:

            Costco Wholesale Corporation

Registration Statement on Form S-3

Filed June 8, 2005

File No. 333-125637

Dear Mr. Owings:

We are in receipt of the staff's comment letter dated June 30, 2005 with respect to the above-referenced registration statement.  Registrant has filed Amendment No. 2 to its Registration Statement, which contains revised disclosure in response to the staff's comments.  Registrant has responded to the staff's comments as set forth below.

Registration Statement Front Cover Page

1.          Please advise why you did not rely on Rule 457(j) of Regulation C to calculate the registration fees.

Response:  There are in excess of 40,000 participants in the 401(k) plan who purchased Costco stock in their accounts during the rescission period.  Substantially all of these participants make bi-monthly contributions through payroll deduction.  The number of transactions made it extremely time consuming and expensive to calculate the exact aggregate purchase price of the shares subject to the Rescission Offer.  During the rescission period, Costco stock traded in a range of $33.64 per share to $49.74 per share.  Since the weighted average purchase price was less than current market at the date of filing the Registration Statement, for convenience, the registration fee was determined using a current market price , $45.56 per share, per Rule 457(h) rather than pursuant to Rule 457(j).  Upon receiving the staff's comment, Registrant instructed the trustee to
determine the aggregate purchase price for the shares subject to the Rescission Offer, which $51,975,996.  Thus, the registration fee calculated under Rule 457(h) is higher than the fee that would be payable under Rule 457(j)

In the process of computing the aggregate purchase price, the trustee determined that the number of shares purchased during the rescission period set forth in the Registration Statement was inaccurate.  Originally, 1,326,325 shares were registered.  The trustee determined that the correct number is 1,301,441.  This change has been made throughout the Prospectus.  Registrant will de-register any excess shares upon completion of the Rescission Offer.

Richard J. Olin

Costco Wholesale Corporation

June 30, 2005

Page 2

Summary, page 4

What Happens If You Do Not Accept The Rescission Offer?, page 5

2.              Please expand the sub-section to include a brief discussion addressing the impact to securityholders who decide to reject the rescission offer.  Please note that a securityholder’s federal right of rescission may survive the rescission offer and the statute of limitations related to a rescission offer.  In this regard, securityholders who do not accept the rescission offer may exercise their legal rights under Section 12 of the Securities Act throughout the remaining statutory period, even after the end of the rescission offer.  Provide corresponding disclosure in a risk factor and in The Rescission Offer section.  As part of the corresponding disclosure, briefly explain the nature of Section 12 rights and the length of the statutory period as provided
by Section 13.

Response:  Additional disclosure has been added to page 5, in the Risk Factors and in the Rescission Offer section to address the staff's comment.

Risk Factors, page 6

3.              Please include a risk factor discussing how a total or partial acceptance will affect your continued business vitality and what impact a partial acceptance may have upon the market value of the remaining securities.

Response:  Registrant does not believe that the rescission offer itself or any anticipated level of acceptance will have any affect on its continued business vitality or on the market value of its remaining securities.  At the end of registrant's last fiscal quarter, May 8, 2005, Registrant had approximately $4 billion in cash and short-term investments, and had slightly in excess of 479 million shares of common stock outstanding.  Registrant's common stock has a market value in excess of $22 billion and has an average daily trading volume well in excess of two million shares.  If all shares subject to the Rescission Offer were repurchased by Registrant (1,326,325 shares), it would be less than one day's trading volume. In addition, Registrant has determined, based on the current market price, that approximately 10% of eligible participants would have
suffered damages during the Rescission Period and that the aggregate amount of those damages is less than $1 million.  Accordingly, registrant does not believe that a risk factor such as suggested by the staff is necessary.

4.              To the extent material, please include a risk factor indicating that if your securityholders sell substantial amounts of your common stock in the public market following this rescission offering, the market price of your common stock could fall.  Also, those sales might make it more difficult for you to sell equity or equity-related securities in the future at a time and price that you deem appropriate.

Response:  As noted in the response above, registrant does not believe that the Rescission Offer will have any significant affect on the trading market for its common stock.  Registrant

Richard J. Olin

Costco Wholesale Corporation

June 30, 2005

Page 3

also does not believe that the Rescission Offer increases the risk that participants in the 401(k) Plan who are not subject to the Rescission Offer will sell the shares of registrant's common stock that they hold in their Plan accounts.  Accordingly, registrant does not believe that a risk factor such as suggested by the staff is necessary.

Questions and Answers About Our Recession Offer, page 8

5.              In a tabular format, please disclose any state law issues associated with this rescission offer, including any state laws that may have been violated, the relevant statute of limitation under state law, and the effect of the rescission offer under state law for each state where the rescission offer is made.

Response:  Registrant does not believe that the qualification provisions of any state securities law have been violated by the sale of the unregistered shares through the 401(k) Plan for two reasons.  First, shares of Registrant's common stock are "covered securities" and thus the qualification provisions of state securities laws have been preempted by federal law.  Second, Registrant believes that the purchase of shares by the 401(k) plan and 401(k) plan participants in open market purchases are non-issuer transactions that are exempt from the qualification provisions of state securities laws due to the exemption for securities qualified for trading on the Nasdaq National Market System.

Accordingly, no tabular format has been included in the Registration Statement.  Disclosure has been added to the Registration Statement concerning the possible effects of the Rescission Offer under state securities laws and the generally applicable statutes of limitations that would apply.

The Rescission Offer, page 21

Background and Reason for the Rescission Offer, page 21

6.              We note your disclosure that “up to 1,326,325 shares of your common stock that the trustee purchased...may not have been registered for sale by Costco Wholesale Corporation in a timely manner in accordance with the Securities Act.”  Please expand your disclosure to provide further detail.  For example, please specify the section(s) of the Securities Act that may have been violated and describe the actual circumstances under which the possible violations arose.  Also disclose how and when you discovered that you may have issued shares that were not properly registered under the Securities Act.  Finally, clarify, if accurate, that there is no requirement that there be a finding of a violation of the securities laws for the securityholders to be able to
participate in the rescission offer.

Response:  Disclosure has been added on page 21 to disclose that Section 5 of the Act may have been violated.  Disclosure has also been added to clarify that no finding of a violation of securities is required for holders to participate in the Rescission Offer.

Richard J. Olin

Costco Wholesale Corporation

June 30, 2005

Page 4

In July 2004, in connection with ERISA qualification of amendments to the 401(k) Plan, Registrant reviewed the number of shares purchased by participants in the Plan and discovered that at some point during late 2003 or early 2004, participants had purchased more shares in the Plan than had been previously registered.  The 401(k) Plan has in excess of 40,000 participants, substantially all of whom have some shares of Costco stock in their account.  These participants generally fund these contributions through bi-monthly payroll deductions, so that the amount of any particular purchase is often less then one share.  Under these circumstances, determining the exact date when the Plan had exhausted the number of shares registered was impractical.

The Registrant does not admit that any registration violation has occurred.  Registrant has chosen to register shares purchased by 401(k) Plan participants in order to avoid potential liability for registration violations.  Under SEC Release 33-4790, registration of shares sold to 401(k) Plan participants is not required if the employer performs no more than the following functions:

1.  Announcing the existence of the plan.

2.  Making payroll deductions at the request of the employee for the purpose of participating in the plan.

3.  Making available to a broker or other agent the names and addresses of employees for direct communication.

4.  Paying no more than its expense of payroll deductions and the reasonable fees and charges of the broker or other agent for brokerage commissions and bookkeeping and custodial expenses.

Registrant believes that its activities in connection with the 401(k) plan fit into the requirements of Release 33-4790.  However, since the Registrant, as with most sponsors of 401(k) plans in large public companies, communicates with its employees and plan participants in numerous ways, it has chosen to register the shares sold to participants in the Plan so that it will not have to be concerned with inadvertently acting outside the parameters of Release 33-4790.

On November 16, 2004, Registrant filed a registration statement on Form S-8 to register additional shares for sale by the 401(k) Plan.  With respect to the number of shares subject to the Rescission Offer, the 1,326,325 shares being registered represents the total number of shares purchased by participants in the 401(k) plan with salary deferral, employer matching, rollover or after-tax contributions, including intra-plan transfers, in the one year period commencing on November 16, 2003.  Based on existing SEC staff interpretations, it is not clear whether the shares to be registered are those acquired by participants in the Plan, including intra-plan transfers (the "gross method") or only those shares purchased by the Plan administrator in the market to be added to plan accounts (the "net method").  The Registrant has used the gross method, both in determining that shares in excess of
those registered had been sold and in

Richard J. Olin

Costco Wholesale Corporation

June 30, 2005

Page 5

determining the number of shares that would be subject to the Rescission Offer, because it is more inclusive. [ If the net method were used, the Registrant does not believe that a registration violation would have occurred.]

Based on the above analysis, Registrant does not believe that disclosure in the Registration Statement of the uncertainties and vagaries surrounding whether registration is required and whether a violation has actually occurred will be of any benefit to plan participants to whom the Rescission Offer will be made.  Accordingly, Registrant has not included such discussion in Amendment No. 2.

7.              Please revise to fully disclose the extent to which the offeree’s right to sue is affected by the rescission offer under state law, including possible remedies.  For example, please discuss whether rejection of the rescission offer would limit any common law or statutory remedies.  Also, discuss how a securityholder can preserve any statutory remedies, and for how long.  Moreover, discuss how the rescission offer will affect the securityholder’s remedies arising out of both technical and fraud violations.

Response:  Disclosure has been added throughout the Registration Statement discussing the effects of the Rescission Offer on remedies under state law.  See pages 13 and 24.

8.              Please expand your disclosure to address whether there will be any restrictions on future transferability of common shares that are not tendered in the rescission offer.

Response:  Disclosure has been added on page 24 to address this comment.

9.              Please state the dollar amount of funds needed if all purchasers were to accept the rescission offer.

Response  We have added disclosure concerning the aggregate repurchase amount if all participants accept the Rescission Offer.  As noted previously, based on current market prices, Registrant has determined that only a small percentage of participants will have suffered damages during the rescission period and that the amount of damages is less than $1 million.  As previously noted, the effect on registrant's financial condition is immaterial.

Terms of the Rescission Offer, page 22

10.           We note that you will pay an interest of 8% per annum to purchasers of your rescinded securities.  To provide securityholders a comparative estimate of your offer, please provide in a tabular format the interest rates required by the states in which the rescission offer is made.  In addition, please explain why the securityholders are not entitled to the rates set forth by the states.

Response:  The interest rate has been increased to 10%.  This is the statutory rate in California, where a significant number of participants reside.  While Costco is using the rate set

Richard J. Olin

Costco Wholesale Corporation

June 30, 2005

Page 6

by California for purposes of the Rescission Offer, we do not believe that Costco is obligated to use the rate set by any state.  As discussed earlier, we do not believe that Costco has violated the qualification provisions of any state securities law and thus no shareholder has a rescission right under state law.

Please address any additional questions or comments to the undersigned by telephone at (206) 389-4264 or by fax at (206) 447-0849.

            Sincerely,

                      /s/ David R. Wilson

            David R. Wilson

cc:  Mr. John Sullivan

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 3561
      June 30, 2005

Richard J. Olin
Vice President and General Counsel
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington 98027

      Re:	Costco Wholesale Corporation
		Registration Statement on Form S-3
      Filed June 8, 2005
		File No. 333-125637

Dear Mr. Olin:

      We have limited our review of your filing to those issues we
have addressed in our comments.  Where indicated, we think you
should
revise your document in response to these comments.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure.  After reviewing this information, we may raise
additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Registration Statement Front Cover Page
1. Please advise why you did not rely on Rule 457(j) of Regulation
C
to calculate the registration fees.
Summary, page 4

What Happens If You Do Not Accept The Rescission Offer?, page 5
2. Please expand the sub-section to include a brief discussion
addressing the impact to securityholders who decide to reject the
rescission offer.  Please note that a securityholder`s federal
right
of rescission may survive the rescission offer and the statute of
limitations related to a rescission offer.  In this regard,
securityholders who do not accept the rescission offer may
exercise
their legal rights under Section 12 of the Securities Act
throughout
the remaining statutory period, even after the end of the
rescission
offer.  Provide corresponding disclosure in a risk factor and in
The
Rescission Offer section.  As part of the corresponding
disclosure,
briefly explain the nature of Section 12 rights and the length of
the
statutory period as provided by Section 13.
Risk Factors, page 6
3. Please include a risk factor discussing how a total or partial
acceptance will affect your continued business vitality and what
impact a partial acceptance may have upon the market value of the
remaining securities.
4. To the extent material, please include a risk factor indicating
that if your securityholders sell substantial amounts of your
common
stock in the public market following this rescission offering, the
market price of your common stock could fall.  Also, those sales
might make it more difficult for you to sell equity or equity-
related
securities in the future at a time and price that you deem
appropriate.

Questions and Answers About Our Recession Offer, page 8
5. In a tabular format, please disclose any state law issues
associated with this rescission offer, including any state laws
that
may have been violated, the relevant statute of limitation under
state law, and the effect of the rescission offer under state law
for
each state where the rescission offer is made.
The Rescission Offer, page 21

Background and Reason for the Rescission Offer, page 21
6. We note your disclosure that "up to 1,326,325 shares of [y]our
common stock that the trustee purchased...may not have been
registered for sale by Costco Wholesale Corporation in a timely
manner in accordance with the Securities Act."  Please expand your
disclosure to provide further detail.  For example, please specify
the section(s) of the Securities Act that may have been violated
and
describe the actual circumstances under which the possible
violations
arose.  Also disclose how and when you discovered that you may
have
issued shares that were not properly registered under the
Securities
Act.  Finally, clarify, if accurate, that there is no requirement
that there be a finding of a violation of the securities laws for
the
securityholders to be able to participate in the rescission offer.
7. Please revise to fully disclose the extent to which the
offeree`s
right to sue is affected by the rescission offer under state law,
including possible remedies.  For example, please discuss whether
rejection of the rescission offer would limit any common law or
statutory remedies.  Also, discuss how a securityholder can
preserve
any statutory remedies, and for how long.  Moreover, discuss how
the
rescission offer will affect the securityholder`s remedies arising
out of both technical and fraud violations.
8. Please expand your disclosure to address whether there will be
any
restrictions on future transferability of common shares that are
not
tendered in the rescission offer.
9. Please state the dollar amount of funds needed if all
purchasers
were to accept the rescission offer.
Terms of the Rescission Offer, page 22
10. We note that you will pay an interest of 8% per annum to
purchasers of your rescinded securities.  To provide
securityholders
a comparative estimate of your offer, please provide in a tabular
format the interest rates required by the states in which the
rescission offer is made.  In addition, please explain why the
securityholders are not entitled to the rates set forth by the
states.

* * * * *

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision.  Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

      Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:

?	should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;

?	the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and

?	the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

      We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      Please contact Pradip Bhaumik, Attorney-Advisor, at (202)
551-
3333, Ellie Quarles, Special Counsel, at (202) 551-3238 or me at
(202) 551-3720 with any other questions.

      					Sincerely,

						H. Christopher Owings
      					Assistant Director

cc: 	David R. Wilson, Esq.
	Heller Ehrman LLP
      Fax: (206) 447-0849

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Richard J. Olin
Costco Wholesale Corporation
June 30, 2005
Page 1

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