1、FISCAL YEAR ENDED AUGUST 28,2022ANNUAL REPORT2022December 7,2022Dear Costco Shareholders,Through the years,Costcos mission has stayed the same:providing our members with quality goods and services at thelowest prices.We follow our Code of Ethics of obeying the law,taking care of our members and empl

2、oyees,respecting oursuppliers,and rewarding our shareholders.By staying true to our culture,Costco has continued to succeed,despite thechallenging business environment.The past year presented many challenges due to inflationary pressures in commodities,labor and transportation.Our buyingstaff around

3、 the world exhibited diligence and perseverance in developing and executing on strategies to minimize the impactto both our members and the business.Our business model,including limiting SKU counts,focusing on the most productiveitems,and bringing goods to market in high volumes,can not only sustain

4、 but provide opportunities in even challengingcircumstances.We had strong operating results in fiscal 2022.Net sales for the 52-week fiscal year totaled$222.7 billion,an increase of 16%,with a comparable sales increase of 14%.Net income for the 52-week fiscal year was$5.8 billion,or$13.14 per dilute

5、d share,an increase of 17%.Revenue from membership fees increased 9%to$4.2 billion.With the slowing of the pandemic,we were able to increase the pace of opening warehouses and business centersdomestically and internationally,including 23 net new locations:14 in the U.S.,two in Canada,and one each in

6、 Mexico,Korea,Japan,Spain,France,Australia and China.Subsequent to the end of fiscal 2022,we expanded our operations to New Zealandand Sweden.In June 2022,we purchased the equity interest of our Taiwan operations from our former joint venture partner.Our Kirkland Signature brand realized strong glob

7、al growth in fiscal 2022.As always,we kept our focus on the key prioritiesof offering new items,providing cost savings and improving quality.New items included BBQ pellets,womens jeans,reformulated dog food,saut pans,fresh mini cakes and chicken yakisoba.Our eight e-commerce websites advanced global

8、ly with sales growth of 10%in fiscal 2022,on top of a 44%increase the prioryear.The majority of that sales growth is due to items such as furniture,TVs,mattresses,appliances,exercise and patioequipment,where our expanded big and bulky delivery capacity improved our service and value.Costco continues

9、 to focus oncomplementing the core warehouse business with e-commerce offerings,with expanded selection in home furnishings,consumer electronics,lawn and garden,health and beauty,apparel and 2-Day Delivery.Costco Next provides members theoption to digitally purchase an expanded selection of products

10、 directly from vendors at a great value.Our employees are the foundation of Costcos business,the heart of the Companys culture,and the driver for our success.Inthe spirit of acknowledging and rewarding the excellence of our employees,in fiscal 2022,we instituted several wageincreases and provided ad

11、ditional benefits to the majority of our employees.Costco is continuing work on sustainability initiatives,reflected in our Sustainability Commitment on C.Theseinclude continuing progress on our Climate Action Plan,decreasing packaging and plastics use,utilizing recycled contentwhen available,and be

12、ing creative in arranging for more products per transport.We have redoubled our efforts related todiversity and inclusion.We extend our deepest appreciation to our more than 314,000 Costco employees and all our members worldwide,who are theheart and soul of our company.Thank you for your continued s

13、upport and trust in Costco.We wish for good health,happiness,peace and prosperity for you and your families in the New Year.Sincerely,Craig JelinekChief Executive OfficerRon VachrisPresident&COOCanadaPuerto Rico United States andMxico10758340 UNITED STATESCOSTCO.COMALABAMA 4ALASKA 4ARIZONA 18ARKANSA

14、S 1CALIFORNIA 133COLORADO 14CONNECTICUT 8DELAWARE 1FLORIDA 30GEORGIA 16HAWAII 7IDAHO 7ILLINOIS 23INDIANA 8IOWA 4KANSAS 3KENTUCKY 4LOUISIANA 3MARYLAND 11MASSACHUSETTS 6MICHIGAN 16MINNESOTA 13MISSISSIPPI 1MISSOURI 8MONTANA 5NEBRASKA 3NEVADA 8NEW HAMPSHIRE 1NEW JERSEY 21NEW MEXICO 3NEW YORK 19NORTH CAR

15、OLINA 10NORTH DAKOTA 2OHIO 12OKLAHOMA 3OREGON 13PENNSYLVANIA 11SOUTH CAROLINA 6SOUTH DAKOTA 1TENNESSEE 6TEXAS 36UTAH 14VERMONT 1 VIRGINIA 17WASHINGTON 33WISCONSIN 10WASHINGTON,D.C.1PUERTO RICO 4 CANADACOSTCO.CAALBERTA 19BRITISH COLUMBIA 14MANITOBA 3NEW BRUNSWICK 3NEWFOUNDLAND ANDLABRADOR 1NOVA SCOTI

16、A 2ONTARIO 39QUBEC 23SASKATCHEWAN 3 MXICO COSTCO.COM.MXAGUASCALIENTES 1BAJA CALIFORNIA 4BAJA CALIFORNIA SUR 1CHIHUAHUA 2CIUDAD DE MXICO 5COAHUILA 1GUANAJUATO 3JALISCO 3MXICO 5MICHOACN 1MORELOS 1NUEVO LEN 3PUEBLA 1QUERTARO 1QUINTANA ROO 1SAN LUIS POTOS 1SINALOA 1S SONORA 1TA ABASCO 1VER RACRUZ 2YUCAT

17、ATN 1AustraliaChinaSpainFranceIcelandUnited Kingdom4212914Sweden12New Zealand1TaiwanJapanKorea 141831Spain4COR000296 0822AUSTRALIA COSTCO.COM.AUAUSTRALIAN CAPITALTERRITORY 1NEW SOUTH WALES 4QUEENSLAND 2SOUTH AUSTRALIA 1VICTORIA 4WESTERN AUSTRALIA 2NEW ZEALAND AUCKLAND 1SHANGHAI 1JAPAN COSTCO.CO.JPAI

18、CHI 2CHIBA 3FUKUOKA 2GIFU 1GUNMA 1HIROSHIMA 1HOKKAIDO 2HYOGO 2IBARAKI 2ISHIKAWA 1KANAGAWA 3KUMAMOTO 1KYOTO 1MIYAGI 1OSAKA 1SAITAMA 2SHIZUOKA 1TOCHIGI-1TOKYO 1TOYAMA 1YAMAGATA 1SWEDEN OLM 1STOCKHOKOREA.CO.KRCOSTCO.1BUSAN AN 1CHEONA2DAEGU N 1DAEJEON 1GIMHAE GGI-DO 5GYEONGN 1INCHEON 1SEJONG 4SEOUL 1ULS

19、AN CHINASHANGHAI 1SUZHOU-1TAIWAN COSTCO.COM.TWCHIAYI CITY 1HSINCHU CITY 1KAOHSIUNG CITY 2NEW TAIPEI CITY 3TAICHUNG CITY 2TAINAN CITY 1TAIPEI CITY 2TAOYUAN CITY 2UNITED KINGDOM COSTCO.CO.UKENGLAND 25SCOTLAND 3WALES 1ICELAND KAUPTN 1SPAIN LUCA 1ANDALUCABISCAY 1MADRID22MADRID2FRANCE E-FRANCE 2LE-DE-FUN

20、ITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the fiscal year ended August 28,2022orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934Commission file

21、number 0-20355Costco Wholesale Corporation(Exact name of registrant as specified in its charter)Washington91-1223280(State or other jurisdiction ofincorporation or organization)(I.R.S.Employer Identification No.)999 Lake Drive,Issaquah,WA 98027(Address of principal executive offices)(Zip Code)Regist

22、rants telephone number,including area code:(425)313-8100Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading SymbolName of each exchange onwhich registeredCommon Stock,$.005 Par ValueCOSTThe NASDAQ Global Select MarketSecurities registered pursuant to Section 12(g)of

23、the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of theAct.Yes No Indicate by check mark whether the

24、 registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of theSecurities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant wasrequired to file such reports),and(2)has been subject to such filing requirements for the past 90 days

25、.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to besubmitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or forsuch shorter period that the registrant was required to submit su

26、ch files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer”,“smaller reporting company”,and“emerg

27、ing growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transitionperiod for complying

28、with any new or revised financial accounting standards provided pursuant to Section 13(a)of theExchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessmentof the effectiveness of its internal control over financial reporting under Sec

29、tion 404(b)of the Sarbanes-Oxley Act(15U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No The aggregate market value of the voting stock held by no

30、n-affiliates of the registrant as of February 13,2022 was$225,434,477,639.The number of shares outstanding of the registrants common stock as of September 27,2022,was 442,604,145.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Companys Proxy Statement for the Annual Meeting of Shareholders to be

31、held on January 19,2023,are incorporated by reference into Part III of this Form 10-K.COSTCO WHOLESALE CORPORATIONANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED AUGUST 28,2022TABLE OF CONTENTSPagePART IItem 1.Business.3Item 1A.Risk Factors.9Item 1B.Unresolved Staff Comments.18Item 2.Properties

32、.18Item 3.Legal Proceedings.19Item 4.Mine Safety Disclosures.19PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and IssuerPurchases of Equity Securities.19Item 6.Reserved.20Item 7.Managements Discussion and Analysis of Financial Condition and Results ofOperations.21Item

33、 7A.Quantitative and Qualitative Disclosures About Market Risk.30Item 8.Financial Statements and Supplementary Data.31Item 9.Changes in and Disagreements with Accountants on Accounting and FinancialDisclosure.61Item 9A.Controls and Procedures.61Item 9B.Other Information.62Item 9C.Disclosure Regardin

34、g Foreign Jurisdictions that Prevent Inspections.62PART IIIItem 10.Directors,Executive Officers and Corporate Governance.62Item 11.Executive Compensation.62Item 12.Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters.62Item 13.Certain Relationships and Relate

35、d Transactions,and Director Independence.62Item 14.Principal Accounting Fees and Services.62PART IVItem 15.Exhibits,Financial Statement Schedules.62Item 16.Form 10-K Summary.65Signatures.662INFORMATION RELATING TO FORWARD LOOKING STATEMENTSCertain statements contained in this document constitute for

36、ward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995.For these purposes,forward-looking statementsare statements that address activities,events,conditions or developments that the Company expects oranticipates may occur in the future and may relate to suc

37、h matters as net sales growth,changes incomparable sales,cannibalization of existing locations by new openings,price or fee changes,earningsperformance,earnings per share,stock-based compensation expense,warehouse openings andclosures,capital spending,the effect of adopting certain accounting standa

38、rds,future financial reporting,financing,margins,return on invested capital,strategic direction,expense controls,membership renewalrates,shopping frequency,litigation,and the demand for our products and services.In some cases,forward-looking statements can be identified because they contain words su

39、ch as“anticipate,”“believe,”“continue,”“could,”“estimate,”“expect,”“intend,”“likely,”“may,”“might,”“plan,”“potential,”“predict,”“project,”“seek,”“should,”“target,”“will,”“would,”or similar expressions and the negatives of those terms.Such forward-looking statements involve risks and uncertainties th

40、at may cause actual events,results,orperformance to differ materially from those indicated by such statements,including,without limitation,thefactors set forth in the section titled“Item 1A-Risk Factors”,and other factors noted in the section titled“Item 7-Managements Discussion and Analysis of Fina

41、ncial Condition and Results of Operations”and inthe consolidated financial statements and related notes in Item 8 of this Report.Forward-lookingstatements speak only as of the date they are made,and we do not undertake to update thesestatements,except as required by law.PART IItem 1BusinessCostco Wh

42、olesale Corporation and its subsidiaries(Costco or the Company)began operations in 1983,inSeattle,Washington.We are principally engaged in the operation of membership warehouses in theUnited States(U.S.)and Puerto Rico,Canada,Mexico,Japan,United Kingdom(U.K.),Korea,Taiwan,Australia,Spain,France,Chin

43、a,and Iceland.Costco operated 838,815,and 795 warehouses worldwideat August 28,2022,August 29,2021,and August 30,2020,respectively.The Company operates e-commerce websites in the U.S.,Canada,Mexico,U.K.,Korea,Taiwan,Japan,and Australia.Ourcommon stock trades on the NASDAQ Global Select Market,under

44、the symbol“COST.”We report on a 52/53-week fiscal year,consisting of thirteen four-week periods and ending on the Sundaynearest the end of August.The first three quarters consist of three periods each,and the fourth quarterconsists of four periods(five weeks in the thirteenth period in a 53-week yea

45、r).The material seasonalimpact in our operations is increased net sales and earnings during the winter holiday season.References to 2022,2021,and 2020 relate to the 52-week fiscal years ended August 28,2022,August29,2021,and August 30,2020,respectively.GeneralWe operate membership warehouses and e-c

46、ommerce websites based on the concept that offering ourmembers low prices on a limited selection of nationally-branded and private-label products in a widerange of categories will produce high sales volumes and rapid inventory turnover.When combined withthe operating efficiencies achieved by volume

47、purchasing,efficient distribution and reduced handling ofmerchandise in no-frills,self-service warehouse facilities,these volumes and turnover enable us tooperate profitably at significantly lower gross margins(net sales less merchandise costs)than most otherretailers.We often sell inventory before

48、we are required to pay for it,even while taking advantage of earlypayment discounts.We buy most of our merchandise directly from manufacturers and route it to cross-docking consolidationpoints(depots)or directly to our warehouses.Our depots receive large shipments from manufacturersand quickly ship

49、these goods to warehouses.This process creates freight volume and handling3efficiencies,lowering costs associated with traditional multiple-step distribution channels.For our e-commerce operations we ship merchandise through our depots,our logistics operations for big and bulkyitems,as well as throu

50、gh drop-ship and other delivery arrangements with our suppliers.Our average warehouse space is approximately 146,000 square feet,with newer units being slightlylarger.Floor plans are designed for economy and efficiency in the use of selling space,the handling ofmerchandise,and the control of invento

51、ry.Because shoppers are attracted principally by the quality ofmerchandise and low prices,our warehouses are not elaborate.By strictly controlling the entrances andexits and using a membership format,we believe our inventory losses(shrinkage)are well below those oftypical retail operations.Our wareh

52、ouses on average operate on a seven-day,70-hour week.Gasoline operations generally haveextended hours.Because the hours of operation are shorter than many other retailers,and due to otherefficiencies inherent in a warehouse-type operation,labor costs are lower relative to the volume of sales.Merchan

53、dise is generally stored on racks above the sales floor and displayed on pallets containing largequantities,reducing labor required.In general,with variations by country,our warehouses accept certaincredit cards,including Costco co-branded cards,debit cards,cash and checks,Executive member 2%reward

54、certificates,co-brand cardholder rebates,and our proprietary stored-value card(shop card).Our strategy is to provide our members with a broad range of high-quality merchandise at prices webelieve are consistently lower than elsewhere.We seek to limit most items to fast-selling models,sizes,and color

55、s.We carry less than 4,000 active stock keeping units(SKUs)per warehouse in our corewarehouse business,significantly less than other broadline retailers.We average anywhere from 10,000to 11,000 SKUs online,some of which are also available in our warehouses.Many consumable productsare offered for sal

56、e in case,carton,or multiple-pack quantities only.In keeping with our policy of member satisfaction,we generally accept returns of merchandise.On certainelectronic items,we typically have a 90-day return policy and provide,free of charge,technical supportservices,as well as an extended warranty.Addi

57、tional third-party warranty coverage is sold on certainelectronic items.We offer merchandise and services in the following categories:Core Merchandise Categories(or core business):Foods and Sundries(including sundries,dry grocery,candy,cooler,freezer,deli,liquor,andtobacco)Non-Foods(including major

58、appliances,electronics,health and beauty aids,hardware,gardenand patio,sporting goods,tires,toys and seasonal,office supplies,automotive care,postage,tickets,apparel,small appliances,furniture,domestics,housewares,special order kiosk,andjewelry)Fresh Foods(including meat,produce,service deli,and bak

59、ery)Warehouse Ancillary(includes gasoline,pharmacy,optical,food court,hearing aids,and tire installation)and Other Businesses(includes e-commerce,business centers,travel,and other)Warehouse ancillary businesses operate primarily within or next to our warehouses,encouragingmembers to shop more freque

60、ntly.The number of warehouses with gas stations varies significantly bycountry,and we have no gasoline business in Korea or China.We operated 668 gas stations at the end of2022.Net sales for our gasoline business increased to approximately 14%of total net sales in 2022.Our other businesses sell prod

61、ucts and services that complement our warehouse operations(core andwarehouse ancillary businesses).Our e-commerce operations give members convenience and a broaderselection of goods and services.Net sales for e-commerce represented approximately 7%of total netsales in 2022.This figure does not inclu

62、de other services we offer online in certain countries such as4business delivery,travel,same-day grocery,and various other services.Our business centers carry itemstailored specifically for food services,convenience stores and offices,and offer walk-in shopping anddeliveries.Business centers are inc

63、luded in our total warehouse count.Costco Travel offers vacationpackages,hotels,cruises,and other travel products exclusively for Costco members(offered in the U.S.,Canada,and the U.K.).We have direct buying relationships with many producers of brand-name merchandise.We do not obtaina significant po

64、rtion of merchandise from any one supplier.The COVID-19 pandemic createdunprecedented supply constraints,including disruptions and delays that have impacted and couldcontinue to impact the flow and availability of certain products.When sources of supply becomeunavailable,we seek alternatives.We also

65、 purchase and manufacture private-label merchandise,as longas quality and member demand are high and the value to our members is significant.Certain financial information for our segments and geographic areas is included in Note 11 to theconsolidated financial statements included in Item 8 of this R

66、eport.MembershipOur members may utilize their memberships at all of our warehouses and websites.Gold Starmemberships are available to individuals;Business memberships are limited to businesses,includingindividuals with a business license,retail sales license,or comparable document.Business members m

67、ayadd additional cardholders(affiliates),to which the same annual fee applies.Affiliates are not available forGold Star members.Our annual fee for these memberships is$60 in the U.S.and varies in othercountries.All paid memberships include a free household card.Our member renewal rate was 93%in the

68、U.S.and Canada and 90%worldwide at the end of 2022.Themajority of members renew within six months following their renewal date.Our renewal rate,whichexcludes affiliates of Business members,is a trailing calculation that captures renewals during the periodseven to eighteen months prior to the reporti

69、ng date.Our membership counts include active membershipsas well as memberships that have not renewed within the 12 months prior to the reporting date.At theend of 2020,we standardized our membership count methodology globally to be consistent with the U.S.and Canada,which resulted in the addition to

70、 the count of approximately 2.0 million total cardholders for2020,of which 1.3 million were paid members.Membership fee income and the renewal rate calculationswere not affected.Our membership was made up of the following(in thousands):202220212020Gold Star.54,00050,20046,800Business,including affil

71、iates.11,80011,50011,300Total paid members.65,80061,70058,100Household cards.53,10049,90047,400Total cardholders.118,900111,600105,500Paid cardholders(except affiliates)are eligible to upgrade to an Executive membership in the U.S.,for anadditional annual fee of$60.Executive memberships are also ava

72、ilable in Canada,Mexico,the U.K.,Japan,Korea,and Taiwan,for which the additional fee varies.Executive members earn a 2%reward onqualified purchases(generally up to a maximum reward of$1,000 per year),redeemable at Costcowarehouses.This program also offers(except in Mexico and Korea)access to additio

73、nal savings andbenefits on various business and consumer services,such as auto and home insurance,the Costco autopurchase program,and check printing.These services are generally provided by third parties and vary bystate and country.Executive members totaled 29.1 million and represented 57%of paid m

74、embers(excluding affiliates)in the U.S.and Canada,and 22%of paid members(excluding affiliates)in our OtherInternational operations.The sales penetration of Executive members represented approximately 71%ofworldwide net sales in 2022.5Human CapitalOur Code of Ethics requires that we“Take Care of Our

75、Employees,”which is fundamental to theobligation to“Take Care of Our Members.”We must also carefully control our selling,general andadministrative(SG&A)expenses,so that we can sell high quality goods and services at low prices.Compensation and benefits for employees is our largest expense after the

76、cost of merchandise and iscarefully monitored.Employee BaseAt the end of 2022,we employed 304,000 employees worldwide.The large majority(approximately 95%)is employed in our membership warehouses and distribution channels,and less than 10%arerepresented by unions.We also utilize seasonal employees d

77、uring peak periods.The total number ofemployees by segment is:Number of Employees202220212020United States.202,000192,000181,000Canada.50,00047,00046,000Other International.52,00049,00046,000Total employees.304,000288,000273,000Growth and EngagementWe believe that our warehouses are among the most p

78、roductive in the retail industry,owing in substantialpart to the commitment and efficiency of our employees.We seek to provide them not merely withemployment but careers.Many attributes of our business contribute to the objective;the more significantinclude:competitive compensation and benefits for

79、those working in our membership warehouses anddistributions channels;a commitment to promoting from within;and maintaining a ratio of at least 50%ofour employee base being full-time employees.These attributes contribute to what we consider,especiallyfor the industry,a high retention rate.In 2022,in

80、the U.S.that rate was approximately 90%for employeeswho have been with us for at least one year.Diversity,Equity and InclusionThe commitment to“Take Care of Our Employees”is also the foundation of our approach to diversity,equity and inclusion and creating an inclusive and respectful workplace.In 20

81、22,we appointed a newChief Diversity and Inclusion Officer.Embracing differences is important to the growth of our Company.Itleads to more opportunities,innovation,and employee satisfaction and connects us to the communitieswhere we do business.Well BeingIn October 2021,we provided an increase of a

82、minimum of$0.50 per hour for U.S.and Canada wagescales.In March 2022,we provided certain compensation increases,including a$0.75 per hour increaseto the top of the U.S.wage scales,increased the starting wage to$17.50,and granted our employeesone additional day of paid time off.In July 2022,we provid

83、ed an additional increase to the top of the U.S.wage scales of$0.50 per hour.Costco is firmly committed to helping protect the health and safety of ourmembers and employees and to serving our communities.As the global effect of COVID-19 continues toevolve,we are closely monitoring the changing situa

84、tion and complying with public health guidance.For more detailed information regarding our programs and initiatives,see“Employees”within ourSustainability Commitment(located on our website).This report and other information on our website arenot incorporated by reference into and do not form any par

85、t of this Annual Report.6CompetitionOur industry is highly competitive,based on factors such as price,merchandise quality and selection,location,convenience,distribution strategy,and customer service.We compete on a worldwide basis withglobal,national,and regional wholesalers and retailers,including

86、 supermarkets,supercenters,internetretailers,gasoline stations,hard discounters,department and specialty stores,and operators selling asingle category or narrow range of merchandise.Walmart,Target,Kroger,and Amazon are among oursignificant general merchandise retail competitors in the U.S.We also co

87、mpete with other warehouseclubs,including Walmarts Sams Club and BJs Wholesale Club.Many of the major metropolitan areas inthe U.S.and certain of our Other International locations have multiple competing clubs.Intellectual PropertyWe believe that,to varying degrees,our trademarks,trade names,copyrig

88、hts,proprietary processes,trade secrets,trade dress,domain names and similar intellectual property add significant value to ourbusiness and are important to our success.We have invested significantly in the development andprotection of our well-recognized brands,including the Costco Wholesale tradem

89、arks and our private-label brand,Kirkland Signature.We believe that Kirkland Signature products are high quality,offered atprices that are generally lower than national brands,and help lower costs,differentiate our merchandiseofferings,and generally earn higher margins.We expect to continue to incre

90、ase the sales penetration ofour private-label items.We rely on trademark and copyright laws,trade-secret protection,and confidentiality,license and otheragreements with our suppliers,employees and others to protect our intellectual property.The availabilityand duration of trademark registrations var

91、y by country;however,trademarks are generally valid and maybe renewed indefinitely as long as they are in use and registrations are maintained.Available InformationOur U.S.website is .We make available through the Investor Relations section of thatsite,free of charge,our Annual Reports on Form 10-K,

92、Quarterly Reports on Form 10-Q,Current Reportson Form 8-K,Proxy Statements and Forms 3,4 and 5,and any amendments to those reports,as soon asreasonably practicable after filing such materials with or furnishing such documents to the Securities andExchange Commission(SEC).The information found on our

93、 website is not part of this or any other reportfiled with or furnished to the SEC.The SEC maintains a site that contains reports,proxy and informationstatements,and other information regarding issuers,such as the Company,that file electronically with theSEC at www.sec.gov.We have a code of ethics f

94、or senior financial officers,pursuant to Section 406 of the Sarbanes-Oxley Act.Copies of the code are available free of charge by writing to Secretary,Costco Wholesale Corporation,999 Lake Drive,Issaquah,WA 98027.If the Company makes any amendments to this code(other thantechnical,administrative,or

95、non-substantive amendments)or grants any waivers,including implicitwaivers,to the Chief Executive Officer,Chief Financial Officer or principal accounting officer andcontroller,we will disclose(on our website or in a Form 8-K report filed with the SEC)the nature of theamendment or waiver,its effectiv

96、e date,and to whom it applies.7Information about our Executive OfficersThe executive officers of Costco,their position,and ages are listed below.All have over 25 years ofservice with the Company,with the exception of Mr.Sullivan who has 21 years of service.NamePositionExecutiveOfficerSinceAgeW.Craig

97、 Jelinek.Chief Executive Officer.Mr.Jelinek has been a director sinceFebruary 2010.Mr.Jelinek previously was President andCEOfromJanuary2012toFebruary2022.HewasPresident and Chief Operating Officer from February 2010 toDecember 2011.Prior to that he was Executive VicePresident,Chief Operating Office

98、r,Merchandising since2004.199570Ron M.Vachris.President and Chief Operating Officer.Mr.Vachris has beena director since February 2022.Mr.Vachris previouslyserved as Executive Vice President of Merchandising fromJune 2016 to January 2022,as Senior Vice President,RealEstate Development,from August 201

99、5 to June 2016,andSenior Vice President,General Manager,Northwest Region,from 2010 to July 2015.201657Richard A.Galanti.ExecutiveVicePresidentandChiefFinancialOfficer.Mr.Galanti has been a director since January 1995.199366Jim C.Klauer.Executive Vice President,Chief Operating Officer,NorthernDivisio

100、n.Mr.Klauer was Senior Vice President,Non-Foodsand E-commerce Merchandise,from 2013 to January 2018.201860Patrick J.Callans.Executive Vice President,Administration.Mr.Callans wasSeniorVicePresident,HumanResourcesandRiskManagement,from 2013 to December 2018.201960Russ D.Miller.Senior Executive Vice P

101、resident,U.S.Operations.Mr.Millerwas Executive Vice President,Chief Operating Officer,Southern Division and Mexico,from January 2018 to May2022.Mr.Miller was Senior Vice President,Western CanadaRegion,from 2001 to January 2018.201865James P.Murphy.ExecutiveVicePresident,ChiefOperatingOfficer,Interna

102、tionalDivision.Mr.MurphywasSeniorVicePresident,International,from 2004 to October 2010.Mr.Murphy is retiring from the Company at the end of calendaryear 2022.201169Timothy L.Rose.ExecutiveVicePresident,AncillaryBusinesses,Manufacturing,and Business Centers.Mr.Rose was SeniorVice President,Merchandis

103、ing,Foods and Sundries andPrivate Label,from 1995 to December 2012.Mr.Rose isretiring from the Company effective November,2022.201370Yoram B.Rubanenko.Executive Vice President,Chief Operating Officer,EasternDivision.Mr.Rubanenko was Senior Vice President andGeneralManager,SoutheastRegion,from2013toS

104、eptember 2021,and Vice President,Regional OperationsManager for the Northeast Region,from 1998 to 2013.202158John Sullivan.Executive Vice President,General Counsel&CorporateSecretary.Mr.Sullivan has been General Counsel since2016 and Corporate Secretary since 2010.202162Claudine E.Adamo.Executive Vi

105、ce President,Merchandising.Ms.Adamo wasSenior Vice President,Non Foods,from 2018 to February2022,and Vice President,Non Foods,from 2013 to 2018.202252Caton Frates.Executive Vice President,Chief Operating Officer,SouthwestDivision.Mr.Frates was Senior Vice President,Los AngelesDivision,from 2015 to M

106、ay 2022.202254Pierre Riel.ExecutiveVicePresident,ChiefOperatingOfficer,International Division.Mr.Riel was Senior Vice President,Country Manager,Canada,from 2019 to March 2022,andSenior Vice President,Eastern Canada Region,from 2001 to2019.2022598Item 1ARisk FactorsThe risks described below could mat

107、erially and adversely affect our business,financial condition andresults of operations.We could also be affected by additional risks that apply to all companies operatingin the U.S.and globally,as well as other risks that are not presently known to us or that we currentlyconsider to be immaterial.Th

108、ese Risk Factors should be carefully reviewed in conjunction withManagements Discussion and Analysis of Financial Condition and Results of Operations in Item 7 andour consolidated financial statements and related notes in Item 8 of this Report.Business and Operating RisksWe are highly dependent on t

109、he financial performance of our U.S.and Canadian operations.Our financial and operational performance is highly dependent on our U.S.and Canadian operations,which comprised 87%and 85%of net sales and operating income in 2022,respectively.Within the U.S.,we are highly dependent on our California oper

110、ations,which comprised 28%of U.S.net sales in 2022.Our California market,in general,has a larger percentage of higher volume warehouses as compared toour other domestic markets.Any substantial slowing or sustained decline in these operations couldmaterially adversely affect our business and financia

111、l results.Declines in financial performance of ourU.S.operations,particularly in California,and our Canadian operations could arise from,among otherthings:slow growth or declines in comparable warehouse sales(comparable sales);negative trends inoperating expenses,including increased labor,healthcare

112、 and energy costs;failing to meet targets forwarehouse openings;cannibalizing existing locations with new warehouses;shifts in sales mix towardlower gross margin products;changes or uncertainties in economic conditions in our markets,includinghigher levels of unemployment and depressed home values;a

113、nd failing to consistently provide highquality and innovative new products.We may be unsuccessful implementing our growth strategy,including expanding our business inexisting markets and new markets,and integrating acquisitions,which could have an adverseimpact on our business,financial condition an

114、d results of operations.Our growth is dependent,in part,on our ability to acquire property and build or lease new warehousesand depots.We compete with other retailers and businesses for suitable locations.Local land use andother regulations restricting the construction and operation of our warehouse

115、s and depots,as well as localcommunity actions opposed to the location of our warehouses or depots at specific sites and the adoptionof local laws restricting our operations and environmental regulations,may impact our ability to findsuitable locations and increase the cost of sites and of construct

116、ing,leasing and operating warehousesand depots.We also may have difficulty negotiating leases or purchase agreements on acceptable terms.In addition,certain jurisdictions have enacted or proposed laws and regulations that would prevent orrestrict the operation or expansion plans of certain large ret

117、ailers and warehouse clubs,including us.Failure to effectively manage these and other similar factors may affect our ability to timely build or leaseand operate new warehouses and depots,which could have a material adverse effect on our futuregrowth and profitability.We seek to expand in existing ma

118、rkets to attain a greater overall market share.A new warehouse maydraw members away from our existing warehouses and adversely affect their comparable salesperformance,member traffic,and profitability.We intend to continue to open warehouses in new markets.Associated risks include difficulties inatt

119、racting members due to a lack of familiarity with us,attracting members of other wholesale cluboperators,our lesser familiarity with local member preferences,and seasonal differences in the market.Entry into new markets may bring us into competition with new competitors or with existing competitorsw

120、ith a large,established market presence.We cannot ensure that new warehouses and new e-commercewebsites will be profitable and future profitability could be delayed or otherwise materially adverselyaffected.9We have made and may continue to make investments and acquisitions to improve the speed,accu

121、racyand efficiency of our supply chains and delivery channels.The effectiveness of these investments can beless predictable than opening new locations and might not provide the anticipated benefits or desiredrates of return.Our failure to maintain membership growth,loyalty and brand recognition coul

122、d adversely affectour results of operations.Membership loyalty and growth are essential to our business.The extent to which we achieve growth inour membership base,increase the penetration of Executive membership,and sustain high renewal ratesmaterially influences our profitability.Damage to our bra

123、nds or reputation may negatively impactcomparable sales,diminish member trust,and reduce renewal rates and,accordingly,net sales andmembership fee revenue,negatively impacting our results of operations.We sell many products under our Kirkland Signature brand.Maintaining consistent product quality,co

124、mpetitive pricing,and availability of these products is essential to developing and maintaining memberloyalty.These products also generally carry higher margins than national brand products and represent agrowing portion of our overall sales.If the Kirkland Signature brand experiences a loss of memb

125、eracceptance or confidence,our sales and gross margin results could be adversely affected.Disruptions in merchandise distribution or processing,packaging,manufacturing,and otherfacilities could adversely affect sales and member satisfaction.We depend on the orderly operation of the merchandise recei

126、ving and distribution process,primarilythrough our depots.We also rely upon processing,packaging,manufacturing and other facilities tosupport our business,which includes the production of certain private-label items.Although we believethat our operations are efficient,disruptions due to fires,tornad

127、oes,hurricanes,earthquakes,pandemicsor other extreme weather conditions or catastrophic events,labor issues or other shipping problems mayresult in delays in the production and delivery of merchandise to our warehouses,which could adverselyaffect sales and the satisfaction of our members.Our e-comme

128、rce operations depend heavily on third-party and in-house logistics providers and is negatively affected when these providers are unable toprovide services in a timely fashion.We may not timely identify or effectively respond to consumer trends,which could negativelyaffect our relationship with our

129、members,the demand for our products and services,and ourmarket share.It is difficult to consistently and successfully predict the products and services that our members willdesire.Our success depends,in part,on our ability to identify and respond to trends in demographics andconsumer preferences.Fai

130、lure to identify timely or effectively respond to changing consumer tastes,preferences(including those relating to environmental,social and governance practices)and spendingpatterns could negatively affect our relationship with our members,the demand for our products andservices,and our market share

131、.If we are not successful at predicting our sales trends and adjusting ourpurchases accordingly,we may have excess inventory,which could result in additional markdowns,or wemay experience out-of-stock positions and delivery delays,which could result in higher costs,both ofwhich would reduce our oper

132、ating performance.This could have an adverse effect on net sales,grossmargin and operating income.Availability and performance of our information technology(IT)systems are vital to our business.Failure to successfully execute IT projects and have IT systems available to our business wouldadversely i

133、mpact our operations.IT systems play a crucial role in conducting our business.These systems are utilized to process a veryhigh volume of transactions,conduct payment transactions,track and value our inventory and producereports critical for making business decisions.Failure or disruption of these s

134、ystems could have anadverse impact on our ability to buy products and services from our suppliers,produce goods in our10manufacturing plants,move the products in an efficient manner to our warehouses and sell products toour members.We are undertaking large technology and IT transformation projects.T

135、he failure of theseprojects could adversely impact our business plans and potentially impair our day to day businessoperations.Given the high volume of transactions we process,it is important that we build strong digitalresiliency to prevent disruption from events such as power outages,computer and

136、telecommunicationsfailures,viruses,internal or external security breaches,errors by employees,and catastrophic eventssuch as fires,earthquakes,tornadoes and hurricanes.Any debilitating failure of our critical IT systems,data centers and backup systems would require significant investments in resourc

137、es to restore ITservices and may cause serious impairment in our business operations including loss of businessservices,increased cost of moving merchandise and failure to provide service to our members.We arecurrently making substantial investments in maintaining and enhancing our digital resilienc

138、y and failure ordelay in these projects could be costly and harmful to our business.Failure to deliver IT transformationefforts efficiently and effectively could result in the loss of our competitive position and adversely impactour financial condition and results of operations.We are required to ma

139、intain the privacy and security of personal and business information amidstmultiplying threat landscapes and in compliance with privacy and data protection regulationsglobally.Failure to do so could damage our business,including our reputation with members,suppliers and employees,cause us to incur s

140、ubstantial additional costs,and become subject tolitigation and regulatory action.Increased security threats and more sophisticated cyber misconduct pose a risk to our systems,networks,products and services.We rely upon IT systems and networks,some of which are managed bythird parties,in connection

141、with virtually all of our business activities.Additionally,we collect,store andprocess sensitive information relating to our business,members,suppliers and employees.Operatingthese IT systems and networks,and processing and maintaining this data,in a secure manner,is criticalto our business operatio

142、ns and strategy.Increased remote work has also increased the possible attacksurfaces.Threats designed to gain unauthorized access to systems,networks and data,both ours andthird parties with whom we work,are increasing in frequency and sophistication.Cybersecurity attacksmay range from random attemp

143、ts to coordinated and targeted attacks,including sophisticated computercrimes and advanced persistent threats.Phishing attacks have emerged as particularly prominent,including as vectors for ransomware attacks,which have increased in breadth and frequency.While wetrain our employees as part of our s

144、ecurity efforts,that training cannot be completely effective.Thesethreats pose a risk to the security of our systems and networks and the confidentiality,integrity,andavailability of our data.It is possible that our IT systems and networks,or those managed by third partiessuch as cloud providers or

145、suppliers that otherwise host confidential information,could havevulnerabilities,which could go unnoticed for a period of time.While our cybersecurity and complianceefforts seek to mitigate such risks,there can be no guarantee that the actions and controls we and ourthird-party service providers hav

146、e implemented and are implementing,will be sufficient to protect oursystems,information or other property.The potential impacts of a material cybersecurity attack include reputational damage,litigation,government enforcement actions,penalties,disruption to systems,unauthorized release of confidentia

147、l orotherwise protected information,corruption of data,diminution in the value of our investment in ITsystems and increased cybersecurity protection and remediation costs.This could adversely affect ourcompetitiveness,results of operations and financial condition and,critically in light of our busin

148、ess model,loss of member confidence.Further,the insurance coverage we maintain and indemnificationarrangements with third-parties may be inadequate to cover claims,costs,and liabilities relating tocybersecurity incidents.In addition,data we collect,store and process is subject to a variety of U.S.an

149、dinternational laws and regulations,such as the European Unions General Data Protection Regulation,California Consumer Privacy Act,Health Insurance Portability and Accountability Act,and other privacyand cybersecurity laws across the various states and around the globe,which may carry significantpot

150、ential penalties for noncompliance.11We are subject to payment-related risks.We accept payments using a variety of methods,including select credit and debit cards,cash and checks,co-brand cardholder rebates,Executive member 2%reward certificates,and our shop card.As we offernew payment options to ou

151、r members,we may be subject to additional rules,regulations,compliancerequirements,and higher fraud losses.For certain payment methods,we pay interchange and otherrelated acceptance fees,along with additional transaction processing fees.We rely on third parties toprovide payment transaction processi

152、ng services for credit and debit cards and our shop card.It coulddisrupt our business if these parties become unwilling or unable to provide these services to us.We arealso subject to fee increases by these service providers.We must comply with evolving payment card association and network operating

153、 rules,including datasecurity rules,certification requirements and rules governing electronic funds transfers.For example,weare subject to Payment Card Industry Data Security Standards,which contain compliance guidelines andstandards with regard to our security surrounding the physical and electroni

154、c storage,processing andtransmission of individual cardholder data.If our internal systems are breached or compromised,we maybe liable for card re-issuance costs,subject to fines and higher transaction fees and lose our ability toaccept card payments from our members,and our business and operating r

155、esults could be adverselyaffected.We might sell products that cause illness or injury to our members,harm to our reputation,andexpose us to litigation.If our merchandise,including food and prepared food products for human consumption,drugs,childrensproducts,pet products and durable goods,do not meet

156、 or are perceived not to meet applicable safety orlabeling standards or our members expectations,we could experience lost sales,increased costs,litigation or reputational harm.The sale of these items involves the risk of illness or injury to our members.Such illnesses or injuries could result from t

157、ampering by unauthorized third parties,product contaminationor spoilage,including the presence of foreign objects,substances,chemicals,other agents,or residuesintroduced during the growing,manufacturing,storage,handling and transportation phases,or faultydesign.Our suppliers are generally contractua

158、lly required to comply with product safety laws,and we aredependent on them to ensure that the products we buy comply with safety and other standards.While weare subject to governmental inspection and regulations and work to comply in all material respects withapplicable laws and regulations,we cann

159、ot be sure that consumption or use of our products will not causeillness or injury or that we will not be subject to claims,lawsuits,or government investigations relating tosuch matters,resulting in costly product recalls and other liabilities that could adversely affect ourbusiness and results of o

160、perations.Even if a product liability claim is unsuccessful or is not fully pursued,negative publicity could adversely affect our reputation with existing and potential members and ourcorporate and brand image,and these effects could be long-term.If we do not successfully develop and maintain a rele

161、vant omnichannel experience for ourmembers,our results of operations could be adversely impacted.Omnichannel retailing is rapidly evolving,and we must keep pace with changing member expectationsand new developments by our competitors.Our members are increasingly using mobile phones,tablets,computers

162、,and other devices to shop and to interact with us through social media.We are makinginvestments in our websites and mobile applications.If we are unable to make,improve,or developrelevant member-facing technology in a timely manner,our ability to compete and our results ofoperations could be advers

163、ely affected.12Inability to attract,train and retain highly qualified employees could adversely impact ourbusiness,financial condition and results of operations.Our success depends on the continued contributions of our employees,including members of our seniormanagement and other key operations,IT,m

164、erchandising and administrative personnel.Failure to identifyand implement a succession plan for senior management could negatively impact our business.We mustattract,train and retain a large and growing number of qualified employees,while controlling related laborcosts and maintaining our core valu

165、es.Our ability to control labor and benefit costs is subject tonumerous internal and external factors,including the continuing impacts of the pandemic,regulatorychanges,prevailing wage rates,union relations and healthcare and other insurance costs.We competewith other retail and non-retail businesse

166、s for these employees and invest significant resources in trainingand motivating them.There is no assurance that we will be able to attract or retain highly qualifiedemployees in the future,which could have a material adverse effect on our business,financial conditionand results of operations.We may

167、 incur property,casualty or other losses not covered by our insurance.Claims for employee health care benefits,workers compensation,general liability,property damage,directors and officers liability,vehicle liability,inventory loss,and other exposures are fundedpredominantly through self-insurance.I

168、nsurance coverage is maintained for certain risks to limitexposures arising from very large losses.The types and amounts of insurance may vary from time to timebased on our decisions with respect to risk retention and regulatory requirements.Significant claims orevents,regulatory changes,a substanti

169、al rise in costs of health care or costs to maintain our insurance orthe failure to maintain adequate insurance coverage could have an adverse impact on our financialcondition and results of operations.Although we maintain specific coverages for catastrophic property losses,we still bear a significa

170、ntportion of the risk of losses incurred as a result of any physical damage to,or the destruction of,anywarehouses,depots,manufacturing or home office facilities,loss or spoilage of inventory,and businessinterruption.Such losses could materially impact our cash flows and results of operations.Market

171、 and Other External RisksWe face strong competition from other retailers and warehouse club operators,which couldadversely affect our business,financial condition and results of operations.The retail business is highly competitive.We compete for members,employees,sites,products andservices and in ot

172、her important respects with a wide range of local,regional and national wholesalers andretailers,both in the United States and in foreign countries,including other warehouse-club operators,supermarkets,supercenters,internet retailers,gasoline stations,hard discounters,department andspecialty stores

173、and operators selling a single category or narrow range of merchandise.Such retailersand warehouse club operators compete in a variety of ways,including pricing,selection and availability,services,location,convenience,store hours,and the attractiveness and ease of use of websites andmobile applicati

174、ons.The evolution of retailing in online and mobile channels has improved the ability ofcustomers to comparison shop,which has enhanced competition.Some competitors have greaterfinancial resources and technology capabilities,better access to merchandise,and greater marketpenetration than we do.Our i

175、nability to respond effectively to competitive pressures,changes in the retailmarkets or customer expectations could result in lost market share and negatively affect our financialresults.13General economic factors,domestically and internationally,may adversely affect our business,financial conditio

176、n,and results of operations.Higher energy and gasoline costs,inflation,levels of unemployment,healthcare costs,consumer debtlevels,foreign-currency exchange rates,unsettled financial markets,weaknesses in housing and realestate markets,reduced consumer confidence,changes and uncertainties related to

177、 government fiscaland tax policies including changes in tax rates,duties,tariffs,or other restrictions,sovereign debt crises,pandemics and other health crises,and other economic factors could adversely affect demand for ourproducts and services,require a change in product mix,or impact the cost of o

178、r ability to purchaseinventory.Additionally,actions in various countries,particularly China and the United States,haveaffected the costs of some of our merchandise.The degree of our exposure is dependent on(amongother things)the type of goods,rates imposed,and timing of the tariffs.The impact to our

179、 net sales andgross margin is influenced in part by our merchandising and pricing strategies in response to potentialcost increases.Higher tariffs could adversely impact our results.Prices of certain commodities,including gasoline and consumable goods used in manufacturing and ourwarehouse retail op

180、erations,are historically volatile and are subject to fluctuations arising from changes indomestic and international supply and demand,inflationary pressures,labor costs,competition,marketspeculation,government regulations,taxes and periodic delays in delivery.Rapid and significant changesin commodi

181、ty prices and our ability and desire to pass them through to our members may affect our salesand profit margins.These factors could also increase our merchandise costs and selling,general andadministrative expenses,and otherwise adversely affect our operations and financial results.Generaleconomic c

182、onditions can also be affected by events like the outbreak of hostilities,including but notlimited to the Ukraine conflict,or acts of terrorism.Inflationary factors such as increases in merchandise costs may adversely affect our business,financialcondition and results of operations.If inflation on m

183、erchandise increases beyond our ability to control wemay not be able to adjust prices to sufficiently offset the effect of the various cost increases withoutnegatively impacting consumer demand.Certain merchandise categories were impacted by inflationhigher than what we have experienced in recent ye

184、ars due to,among other things,the continuing impactsof the pandemic and uncertain economic environment.Suppliers may be unable to timely supply us with quality merchandise at competitive prices ormay fail to adhere to our high standards,resulting in adverse effects on our business,merchandise invent

185、ories,sales,and profit margins.We depend heavily on our ability to purchase quality merchandise in sufficient quantities at competitiveprices.As the quantities we require continue to grow,we have no assurances of continued supply,appropriate pricing or access to new products,and any supplier has the

186、 ability to change the terms uponwhich they sell to us or discontinue selling to us.Member demands may lead to out-of-stock positionscausing a loss of sales and profits.We buy from numerous domestic and foreign manufacturers and importers.Our inability to acquiresuitable merchandise on acceptable te

187、rms or the loss of key suppliers could negatively affect us.We maynot be able to develop relationships with new suppliers,and products from alternative sources,if any,maybe of a lesser quality or more expensive.Because of our efforts to adhere to high quality standards forwhich available supply may

188、be limited,particularly for certain food items,the large volumes we demandmay not be consistently available.14Our suppliers(and those they depend upon for materials and services)are subject to risks,includinglabor disputes,union organizing activities,financial liquidity,natural disasters,extreme wea

189、therconditions,public health emergencies,supply constraints and general economic and political conditionsthat could limit their ability to timely provide us with acceptable merchandise.One or more of our suppliersmight not adhere to our quality control,packaging,legal,regulatory,labor,environmental

190、or animalwelfare standards.These deficiencies may delay or preclude delivery of merchandise to us and might notbe identified before we sell such merchandise to our members.This failure could lead to recalls andlitigation and otherwise damage our reputation and our brands,increase costs,and otherwise

191、 adverselyimpact our business.Fluctuations in foreign exchange rates may adversely affect our results of operations.During 2022,our international operations,including Canada,generated 27%and 32%of our net salesand operating income,respectively.Our international operations have accounted for an incre

192、asing portionof our warehouses,and we plan to continue international growth.To prepare our consolidated financialstatements,we translate the financial statements of our international operations from local currencies intoU.S.dollars using current exchange rates.Future fluctuations in exchange rates t

193、hat are unfavorable tous may adversely affect the financial performance of our Canadian and Other International operations andhave a corresponding adverse period-over-period effect on our results of operations.As we continue toexpand internationally,our exposure to fluctuations in foreign exchange r

194、ates may increase.A portion of the products we purchase is paid for in a currency other than the local currency of the countryin which the goods are sold.Currency fluctuations may increase our merchandise costs and may not bepassed on to members.Consequently,fluctuations in currency exchange rates m

195、ay adversely affect ourresults of operations.Natural disasters,extreme weather conditions,public health emergencies or other catastrophicevents could negatively affect our business,financial condition,and results of operations.Natural disasters and extreme weather conditions,including those impacted

196、 by climate change,such ashurricanes,typhoons,floods,earthquakes,wildfires,droughts;acts of terrorism or violence,includingactive shooter situations;energy shortages;public health issues,including pandemics and quarantines,particularly in California or Washington state,where our centralized operatin

197、g systems and administrativepersonnel are located,could negatively affect our operations and financial performance.Such eventscould result in physical damage to our properties,limitations on store operating hours,less frequent visitsby members to physical locations,the temporary closure of warehouse

198、s,depots,manufacturing or homeoffice facilities,the temporary lack of an adequate work force,disruptions to our IT systems,thetemporary or long-term disruption in the supply of products from some local or overseas suppliers,thetemporary disruption in the transport of goods to or from overseas,delays

199、 in the delivery of goods to ourwarehouses or depots,and the temporary reduction in the availability of products in our warehouses.Public health issues,whether occurring in the U.S.or abroad,could disrupt our operations,disrupt theoperations of suppliers or members,or have an adverse impact on consu

200、mer spending and confidencelevels.These events could also reduce demand for our products or make it difficult or impossible toprocure products.We may be required to suspend operations in some or all of our locations,which couldhave a material adverse effect on our business,financial condition and re

201、sults of operations.The COVID-19 pandemic continues to affect our business,financial condition and results ofoperations in many respects.The continuing impacts of the COVID-19 pandemic are highly unpredictable and volatile and are affectingcertain business operations,demand for our products and serv

202、ices,in-stock positions,costs of doingbusiness,availability of labor,access to inventory,supply chain operations,our ability to predict futureperformance,exposure to litigation,and our financial performance,among other things.15Other factors and uncertainties include,but are not limited to:The sever

203、ity and duration of the pandemic,including future mutations or related variants of thevirus in areas in which we operate;Evolving macroeconomic factors,including general economic uncertainty,unemployment rates,and recessionary pressures;Changes in labor markets affecting us and our suppliers;Unknown

204、 consequences on our business performance and initiatives stemming from thesubstantial investment of time and other resources to the pandemic response;The pace of recovery when the pandemic subsides;The long-term impact of the pandemic on our business,including consumer behaviors;andDisruption and v

205、olatility within the financial and credit markets.To the extent that COVID-19 continues to adversely affect the U.S.and global economy,our business,results of operations,cash flows,or financial condition,it may also heighten other risks described in thissection,including but not limited to those rel

206、ated to consumer behavior and expectations,competition,brand reputation,implementation of strategic initiatives,cybersecurity threats,payment-related risks,technology systems disruption,supply chain disruptions,labor availability and cost,litigation,operationalrisk as a result of remote work arrange

207、ments and regulatory requirements.Factors associated with climate change could adversely affect our business.We use natural gas,diesel fuel,gasoline,and electricity in our distribution and warehouse operations.Government regulations limiting carbon dioxide and other greenhouse gas emissions may incr

208、easecompliance and merchandise costs,and other regulation affecting energy inputs could materially affectour profitability.As the economy transitions to lower carbon intensity we cannot guarantee that we willmake adequate investments or successfully implement strategies that will effectively achieve

209、 our climate-related goals,which could lead to negative perceptions among members and other stakeholders andresult in reputational harm.Climate change,extreme weather conditions,wildfires,droughts and risingsea levels could affect our ability to procure commodities at costs and in quantities we curr

210、entlyexperience.We also sell a substantial amount of gasoline,the demand for which could be impacted by concernsabout climate change and increased regulations.More stringent fuel economy standards and publicpolicies aimed at increasing the adoption of zero-emission and alternative fuel vehicles and

211、otherregulations related to climate change will affect our future operations and may adversely impact ourprofitability,and require significant capital expenditures.Failure to meet financial market expectations could adversely affect the market price and volatilityof our stock.We believe that the pri

212、ce of our stock currently reflects high market expectations for our future operatingresults.Any failure to meet or delay in meeting these expectations,including our warehouse and e-commerce comparable sales growth rates,membership renewal rates,new member sign-ups,grossmargin,earnings,earnings per s

213、hare,new warehouse openings,or dividend or stock repurchase policiescould cause the price of our stock to decline.16Legal and Regulatory RisksWe are subject to risks associated with the legislative,judicial,accounting,regulatory,politicaland economic factors specific to the countries or regions in w

214、hich we operate,which couldadversely affect our business,financial condition and results of operations.At the end of 2022,we operated 260 warehouses outside of the U.S.,and we plan to continue expandingour international operations.Future operating results internationally could be negatively affected

215、 by avariety of factors,many similar to those we face in the U.S.,certain of which are beyond our control.These factors include political and economic conditions,regulatory constraints,currency regulations,policy changes such as the withdrawal of the U.K.from the European Union,and other matters in

216、any ofthe countries or regions in which we operate,now or in the future.Other factors that may impactinternational operations include foreign trade(including tariffs and trade sanctions),monetary and fiscalpolicies and the laws and regulations of the U.S.and foreign governments,agencies and similaro

217、rganizations,and risks associated with having major facilities in locations which have been historicallyless stable than the U.S.Risks inherent in international operations also include,among others,the costsand difficulties of managing international operations,adverse tax consequences,and difficulty

218、 in enforcingintellectual property rights.Changes in accounting standards and subjective assumptions,estimates and judgments bymanagement related to complex accounting matters could significantly affect our financialcondition and results of operations.Accounting principles and related pronouncements

219、,implementation guidelines,and interpretations weapply to a wide range of matters that are relevant to our business,including self-insurance liabilities,arehighly complex and involve subjective assumptions,estimates and judgments by our management.Changes in rules or interpretation or changes in und

220、erlying assumptions,estimates or judgments by ourmanagement could significantly change our reported or expected financial performance and have amaterial impact on our consolidated financial statements.We are exposed to risks relating to evaluations of controls required by Section 404 of theSarbanes-

221、Oxley Act.Section 404 of the Sarbanes-Oxley Act of 2002 requires management assessments of the effectivenessof internal control over financial reporting and disclosure controls and procedures.If we are unable tomaintain effective internal control over financial reporting or disclosure controls and p

222、rocedures,our abilityto record,process and report financial information accurately and to prepare financial statements withinrequired time periods could be adversely affected,which could subject us to litigation or investigationsrequiring management resources and payment of legal and other expenses,

223、negatively affect investorconfidence in our financial statements and adversely impact our stock price.Changes in tax rates,new U.S.or foreign tax legislation,and exposure to additional tax liabilitiescould adversely affect our financial condition and results of operations.We are subject to a variety

224、 of taxes and tax collection and remittance obligations in the U.S.andnumerous foreign jurisdictions.Additionally,at any point in time,we may be under examination for valueadded,sales-based,payroll,product,import or other non-income taxes.We may recognize additional taxexpense,be subject to addition

225、al tax liabilities,or incur losses and penalties,due to changes in laws,regulations,administrative practices,principles,assessments by authorities and interpretations related totax,including tax rules in various jurisdictions.We compute our income tax provision based on enactedtax rates in the count

226、ries in which we operate.As tax rates vary among countries,a change in earningsattributable to the various jurisdictions in which we operate could result in an unfavorable change in ouroverall tax provision.Additionally,changes in the enacted tax rates or adverse outcomes in tax audits,including tra

227、nsfer pricing disputes,could have a material adverse effect on our financial condition andresults of operations.17Significant changes in or failure to comply with regulations relating to the use,storage,dischargeanddisposalofhazardousmaterials,hazardousandnon-hazardouswastesandotherenvironmental mat

228、ters could adversely impact our business,financial condition and results ofoperations.We are subject to a wide and increasingly broad array of federal,state,regional,local and internationallaws and regulations relating to the use,storage,discharge and disposal of hazardous materials,hazardous and no

229、n-hazardous wastes and other environmental matters.Failure to comply with theselaws could result in harm to our members,employees or others,significant costs to satisfy environmentalcompliance,remediation or compensatory requirements,or the imposition of severe penalties orrestrictions on operations

230、 by governmental agencies or courts that could adversely affect our business,financial condition and results of operations.Operations at our facilities require the treatment and disposal of wastewater,stormwater and agriculturaland food processing wastes,the use and maintenance of refrigeration syst

231、ems,including ammonia-basedchillers,noise,odor and dust management,the operation of mechanized processing equipment,andother operations that potentially could affect the environment and public health and safety.Failure tocomply with current and future environmental,health and safety standards could

232、result in the imposition offines and penalties,illness or injury of our employees,and claims or lawsuits related to such illnesses orinjuries,and temporary closures or limits on the operations of facilities.We are involved in a number of legal proceedings and audits and some of these outcomes coulda

233、dversely affect our business,financial condition and results of operations.Our business requires compliance with many laws and regulations.Failure to achieve compliance couldsubject us to lawsuits and other proceedings,and lead to damage awards,fines,penalties,andremediation costs.We are or may beco

234、me involved in a number of legal proceedings and audits,including grand jury investigations,government and agency investigations,and consumer,employment,tort,unclaimed property laws,and other litigation.We cannot predict with certainty the outcomes of theseproceedings and other contingencies,includi

235、ng environmental remediation and other proceedingscommenced by governmental authorities.The outcome of some of these proceedings,audits,unclaimedproperty laws,and other contingencies could require us to take,or refrain from taking,actions which couldnegatively affect our operations or could require

236、us to pay substantial amounts of money,adverselyaffecting our financial condition and results of operations.Additionally,defending against these lawsuitsand proceedings may involve significant expense and diversion of managements attention andresources.Item 1BUnresolved Staff CommentsNone.Item 2Prop

237、ertiesWarehouse PropertiesAt August 28,2022,we operated 838 membership warehouses:Own Landand BuildingLease Landand/orBuilding(1)TotalUnited States and Puerto Rico.466112578Canada.9017107Other International.10548153Total.661177838_(1)126 of the 177 leases are land-only leases,where Costco owns the b

238、uilding.18At the end of 2022,our warehouses contained approximately 122.5 million square feet of operating floorspace:85.4 million in the U.S.;15.2 million in Canada;and 21.9 million in Other International.Totalsquare feet associated with distribution and logistics facilities were approximately 31.0

239、 million.Additionally,we operate various processing,packaging,manufacturing and other facilities to support ourbusiness,which includes the production of certain private-label items.Item 3Legal ProceedingsSee discussion of Legal Proceedings in Note 10 to the consolidated financial statements included

240、 inItem 8 of this Report.Item 4Mine Safety DisclosuresNot applicable.PART IIItem 5Market for Registrants Common Equity,Related Stockholder Matters and IssuerPurchases of Equity SecuritiesMarket Information and Dividend PolicyOur common stock is traded on the NASDAQ Global Select Market under the sym

241、bol“COST.”OnSeptember 27,2022,we had 10,279 stockholders of record.Payment of dividends is subject to declaration by the Board of Directors.Factors considered indetermining dividends include our profitability and expected capital needs.Subject to these qualifications,we presently expect to continue

242、to pay dividends on a quarterly basis.Issuer Purchases of Equity SecuritiesThe following table sets forth information on our common stock repurchase activity for the fourth quarterof 2022(dollars in millions,except per share data):PeriodTotal Numberof SharesPurchasedAverage PricePaid perShareTotal N

243、umber ofSharesPurchased asPart of PubliclyAnnouncedProgram(1)Maximum DollarValue of Sharesthat May Yet bePurchased underthe ProgramMay 9June 5,2022.98,000$463.7798,000$2,947June 6July 3,2022.98,000467.5398,0002,901July 4July 31,2022.89,000512.0889,0002,856August 1August 28,2022.88,000545.0888,0002,8

244、08Total fourth quarter.373,000$495.49373,000_(1)The repurchase program is conducted under a$4,000 authorization approved by our Board of Directors in April 2019,whichexpires in April 2023.19Performance GraphThe following graph compares the cumulative total shareholder return assuming reinvestment of

245、dividends on an investment of$100 in Costco common stock,S&P 500 Index,and the S&P 500 RetailIndex over the five years from September 3,2017,through August 28,2022.The following graph provides information concerning average sales per warehouse over a 10-year period.Average Sales Per Warehouse*(Sales

246、 In Millions)Year Opened#of Whses202223$150202120$3$1920$8201821$2202201726$6206237201629$87973204201523$8385943189201430$522082013&Before633$73230261Totals838916317618

247、200022Fiscal Year*First year sales annualized.2017 was a 53-week fiscal year but it has been normalized for purposes of comparabilityItem 6Reserved20?$?$50.00?$100.00?$150.00?$200.00?$250.00?$300.00?$350.00?$400.001/1/20171/1/20181/1/20191/1/20201/1/20211/

248、1/2022DollarsComparison?of?5?Year?Cumulative?Total?Return?Among?Costco?Wholesale?Corporation,?S&P?500?Index?and?S&P?500?Retail?Index?(S5RETL)Costco?Wholesale?CorporationS&P?500S&P?500?Retail?Index?(S5RETL)Item7ManagementsDiscussionandAnalysisofFinancialConditionsandResultsofOperations(amounts in mil

249、lions,except per share,share,membership fee,and warehouse count data)The following Managements Discussion and Analysis of Financial Condition and Results of Operations(MD&A)is intended to promote understanding of the results of operations and financial condition.MD&Ais provided as a supplement to,an

250、d should be read in conjunction with,our consolidated financialstatements and the accompanying Notes to Financial Statements(Part II,Item 8 of this Form 10-K).Thissection generally discusses the results of operations for 2022 compared to 2021.For discussion relatedto the results of operations and ch

251、anges in financial condition for 2021 compared to 2020 refer to Part II,Item 7,Managements Discussion and Analysis of Financial Condition and Results of Operations in ourfiscal year 2021 Form 10-K,which was filed with the United States Securities and Exchange Commission(SEC)on October 6,2021.Overvie

252、wWe believe that the most important driver of our profitability is increasing net sales,particularlycomparable sales.Net sales includes our core merchandise categories(foods and sundries,non-foods,and fresh foods),warehouse ancillary(gasoline,pharmacy,optical,food court,hearing aids,and tireinstalla

253、tion)and other businesses(e-commerce,business centers,travel and other).We definecomparable sales as net sales from warehouses open for more than one year,including remodels,relocations and expansions,and sales related to e-commerce websites operating for more than oneyear.Comparable sales growth is

254、 achieved through increasing shopping frequency from new and existingmembers and the amount they spend on each visit(average ticket).Sales comparisons can also beparticularly influenced by certain factors that are beyond our control:fluctuations in currency exchangerates(with respect to our internat

255、ional operations);inflation and changes in the cost of gasoline andassociated competitive conditions.The higher our comparable sales exclusive of these items,the morewe can leverage our SG&A expenses,reducing them as a percentage of sales and enhancing profitability.Generating comparable sales growt

256、h is foremost a question of making available to our members the rightmerchandise at the right prices,a skill that we believe we have repeatedly demonstrated over the long-term.Another substantial factor in net sales growth is the health of the economies in which we dobusiness,including the effects o

257、f inflation or deflation,especially the United States.Net sales growth andgross margins are also impacted by our competition,which is vigorous and widespread,across a widerange of global,national and regional wholesalers and retailers,including those with e-commerceoperations.While we cannot control

258、 or reliably predict general economic health or changes incompetition,we believe that we have been successful historically in adapting our business to thesechanges,such as through adjustments to our pricing and merchandise mix,including increasing thepenetration of our private-label items,and throug

259、h online offerings.Our philosophy is to provide our members with quality goods and services at competitive prices.We donot focus in the short-term on maximizing prices charged,but instead seek to maintain what we believe isa perception among our members of our“pricing authority”consistently providin

260、g the most competitivevalues.Merchandise costs in 2022 were impacted by inflation higher than what we have experienced inrecent years.The impact to our net sales and gross margin is influenced in part by our merchandising andpricing strategies in response to cost increases.Those strategies can inclu

261、de,but are not limited to,working with our suppliers to share in absorbing cost increases,earlier-than-usual purchasing and ingreater volumes,offering seasonal merchandise outside its season,as well as passing cost increases onto our members.Our investments in merchandise pricing may include reducin

262、g prices on merchandise todrive sales or meet competition and holding prices steady despite cost increases instead of passing theincreases on to our members,all negatively impacting gross margin and gross margin as a percentage ofnet sales(gross margin percentage).21We believe our gasoline business

263、enhances traffic in our warehouses,but it generally has a lower grossmargin percentage relative to our non-gasoline business.It also has lower SG&A expenses as a percentof net sales compared to our non-gasoline business.A higher penetration of gasoline sales will generallylower our gross margin perc

264、entage.Rapidly changing gasoline prices may significantly impact our near-term net sales growth.Generally,rising gasoline prices benefit net sales growth which,given the highersales base,negatively impacts our gross margin percentage but decreases our SG&A expenses as apercentage of net sales.A decl

265、ine in gasoline prices has the inverse effect.Additionally,actions in variouscountries,particularly China and the United States,have affected the costs of some of our merchandise.The degree of our exposure is dependent on(among other things)the type of goods,rates imposed,andtiming of the tariffs.Hi

266、gher tariffs could adversely impact our results.We also achieve net sales growth by opening new warehouses.As our warehouse base grows,availableand desirable sites become more difficult to secure,and square footage growth becomes a comparativelyless substantial component of growth.The negative aspec

267、ts of such growth,however,including lowerinitial operating profitability relative to existing warehouses and cannibalization of sales at existingwarehouses when openings occur in existing markets,are continuing to decline in significance as theyrelate to the results of our total operations.Our rate

268、of square footage growth is generally higher in foreignmarkets,due to the smaller base in those markets,and we expect that to continue.Our e-commercebusiness growth,domestically and internationally,has also increased our sales but it generally has alower gross margin percentage relative to our wareh

269、ouse operations.E-commerce sales growth slowed in2022 compared to 2021 and 2020.The membership format is an integral part of our business and has a significant effect on our profitability.This format is designed to reinforce member loyalty and provide continuing fee revenue.The extent towhich we ach

270、ieve growth in our membership base,increase the penetration of our Executive members,and sustain high renewal rates materially influences our profitability.Our paid membership growth ratemay be adversely impacted when warehouse openings occur in existing markets as compared to newmarkets.Our financi

271、al performance depends heavily on controlling costs.While we believe that we have achievedsuccesses in this area,some significant costs are partially outside our control,particularly health care andutility expenses.With respect to the compensation of our employees,our philosophy is not to seek tomin

272、imize their wages and benefits.Rather,we believe that achieving our longer-term objectives ofreducing employee turnover and enhancing employee satisfaction requires maintaining compensationlevels that are better than the industry average for much of our workforce.This may cause us,forexample,to abso

273、rb costs that other employers might seek to pass through to their workforces.Becauseour business operates on very low margins,modest changes in various items in the consolidatedstatements of income,particularly merchandise costs and SG&A expenses,can have substantial impactson net income.Our operati

274、ng model is generally the same across our U.S.,Canadian,and Other International operatingsegments(see Note 11 to the consolidated financial statements included in Item 8 of this Report).Certainoperations in the Other International segment have relatively higher rates of square footage growth,lowerwa

275、ge and benefit costs as a percentage of sales,less or no direct membership warehouse competition,orlack e-commerce or business delivery.22In discussions of our consolidated operating results,we refer to the impact of changes in foreigncurrencies relative to the U.S.dollar,which are the differences b

276、etween the foreign-exchange rates weuse to convert the financial results of our international operations from local currencies into U.S.dollars.This impact of foreign-exchange rate changes is calculated based on the difference between the currentperiods currency exchange rates and that of the compar

277、able prior period.The impact of changes ingasoline prices on net sales is calculated based on the difference between the current periods averageprice per gallon sold and that of the comparable prior period.Our fiscal year ends on the Sunday closest to August 31.References to 2022,2021,and 2020 relat

278、e tothe 52-week fiscal years ended August 28,2022,August 29,2021,and August 30,2020,respectively.Certain percentages presented are calculated using actual results prior to rounding.Unless otherwisenoted,references to net income relate to net income attributable to Costco.Highlights for 2022 versus 2

279、021 include:We opened 26 new warehouses,including 3 relocations:14 net new in the U.S.,2 net new in ourCanadian segment,and 7 new in our Other International segment,compared to 22 newwarehouses,including 2 relocations in 2021;Net sales increased 16%to$222,730 driven by a 14%increase in comparable sa

280、les and sales atnew warehouses opened in 2021 and 2022;Membership fee revenue increased 9%to$4,224,driven by new member sign-ups,upgrades toExecutive membership,and an increase in our renewal rate;Gross margin percentage decreased 65 basis points,driven primarily by our core merchandisecategories an

281、d a LIFO charge for higher merchandise costs;SG&A expenses as a percentage of net sales decreased 77 basis points,primarily due to leveragingincreased sales and ceasing of incremental wages related to COVID-19,despite additional wageand benefits increases;We incurred a one-time$77 pretax charge,prim

282、arily related to granting our employees oneadditional day of paid time off in March 2022;The effective tax rate in 2022 was 24.6%compared to 24.0%in 2021;Net income increased 17%to$5,844,or$13.14 per diluted share compared to$5,007,or$11.27 perdiluted share in 2021;In June 2022,the Company paid a ca

283、sh dividend of$208 and purchased the remaining equityinterest of its Taiwan operations from its former joint-venture partner for$842,totaling$1,050 in theaggregate;andIn April 2022,the Board of Directors approved an increase in the quarterly cash dividend from$0.79to$0.90 per share.COVID-19The COVID

284、-19 pandemic continued to impact our business during 2022,albeit to a lesser extent.COVID-related and other supply and logistics constraints have continued to adversely affect some merchandisecategories and are expected to do so for the foreseeable future.During 2021,we paid$515 inincremental wages

285、related to COVID-19,which ceased in February 2021.23RESULTS OF OPERATIONSNet Sales202220212020Net Sales.$222,730$192,052$163,220Increases in net sales:U.S.17%16%9%Canada.16%22%5%Other International.10%23%13%Total Company.16%18%9%Increases in comparable sales:U.S.16%15%8%Canada.15%20%5%Other Internat

286、ional.7%19%9%Total Company.14%16%8%Increases in comparable sales excluding the impact ofchanges in foreign currency and gasoline prices:U.S.10%14%9%Canada.12%12%7%Other International.10%13%11%Total Company.11%13%9%Net SalesNet sales increased$30,678 or 16%during 2022.The improvement was attributable

287、 to an increase incomparable sales of 14%,and sales at new warehouses opened in 2021 and 2022.Sales increased$15,830 in core merchandise categories and$14,848 in warehouse ancillary and other businesses.Therate of increase was strongest in our gasoline,business centers,and travel businesses.Sales co

288、ntinuedto be impacted by inflation,higher than what we experienced in previous fiscal years.During 2022,higher gasoline prices positively impacted net sales by$9,230,481 basis points,comparedto 2021,with a 42%increase in the average price per gallon.The volume of gasoline sold increasedapproximately

289、 22%,positively impacting net sales by$3,847,200 basis points.Changes in foreigncurrencies relative to the U.S.dollar negatively impacted net sales by approximately$1,762,92 basispoints,compared to 2021,attributable primarily to our Other International operations.Comparable SalesComparable sales inc

290、reased 14%during 2022 and were positively impacted by increases in shoppingfrequency and average ticket,which includes the effects of inflation and changes in foreign currency.E-commerce comparable sales increased 10%during 2022,including inflation.24Membership Fees202220212020Membership fees.$4,224

291、$3,877$3,541Membership fees increase.9%9%6%Membership fee revenue increased 9%in 2022,driven by new member sign-ups and upgrades toExecutive membership.Changes in foreign currencies relative to the U.S.dollar negatively impactedmembership fees by$42,compared to 2021.At the end of 2022,our member ren

292、ewal rates were 93%inthe U.S.and Canada and 90%worldwide.Renewal rates continue to benefit from more members autorenewing and increased penetration of Executive members,who on average renew at a higher rate.Ourrenewal rate,which excludes affiliates of Business members,is a trailing calculation that

293、capturesrenewals during the period seven to eighteen months prior to the reporting date.We account formembership fee revenue on a deferred basis,recognized ratably over the one-year membership period.Gross Margin202220212020Net sales.$222,730$192,052$163,220Less merchandise costs.199,382170,684144,9

294、39Gross margin.$23,348$21,368$18,281Gross margin percentage.10.48%11.13%11.20%Total gross margin percentage decreased 65 basis points compared to 2021.Excluding the impact ofgasoline price inflation on net sales,gross margin was 10.94%,a decrease of 19 basis points.This wasprimarily due to a 33 basi

295、s-point decrease in core merchandise categories,predominantly driven bydecreases in fresh foods and foods and sundries,and 19 basis points due to a LIFO charge for highermerchandise costs.Gross margin was also negatively impacted by one basis point due to increased 2%rewards.Warehouse ancillary and

296、other businesses positively impacted gross margin by 29 basis points,predominantly gasoline,partially offset by e-commerce.Gross margin was positively impacted by fivebasis points due to the net impact of ceasing incremental wages related to COVID-19 and the negativeimpact of a one-time charge relat

297、ed to granting our employees one additional day of paid time off.Changes in foreign currencies relative to the U.S.dollar negatively impacted gross margin byapproximately$176,compared to 2021,primarily attributable to our Other International Operations.The gross margin in core merchandise categories

298、,when expressed as a percentage of core merchandisesales(rather than total net sales),decreased 27 basis points.The decrease was across all categories,most significantly in fresh foods.This measure eliminates the impact of changes in sales penetration andgross margins from our warehouse ancillary an

299、d other businesses.Gross margin on a segment basis,when expressed as a percentage of the segments own sales andexcluding the impact of changes in gasoline prices on net sales(segment gross margin percentage),decreased across all segments.All segments were negatively impacted due to decreases in core

300、merchandise categories,partially offset by increases in warehouse ancillary and other businesses.Grossmargin in our U.S.segment was also negatively impacted by the LIFO charge.Our Other Internationalsegment was negatively impacted by increased 2%rewards.All segments benefited from the ceasing ofincr

301、emental wages related to COVID-19.25Selling,General and Administrative Expenses202220212020SG&A expenses.$19,779$18,537$16,387SG&A expenses as a percentage of net sales.8.88%9.65%10.04%SG&A expenses as a percentage of net sales decreased 77 basis points compared to 2021.SG&Aexpenses as a percentage

302、of net sales excluding the impact of gasoline price inflation was 9.26%,adecrease of 39 basis points.Warehouse operations and other businesses were lower by 17 basis points,largely attributable to leveraging increased sales.This includes the impact of the starting wage increasewe instituted in Octob

303、er 2021,as well the increased wages and benefits that were effective on March 14,2022,and July 4,2022.SG&A expenses was benefited by a net of 16 basis points due to the positiveimpact of ceasing incremental wages related to COVID-19,partially offset by higher write-offs of certaininformation technol

304、ogy assets,and expenses related to granting our employees one additional day ofpaid time off.Central operating costs were lower by five basis points,and stock compensation expensewas lower by one basis point.Changes in foreign currencies relative to the U.S.dollar decreased SG&Aexpenses by approxima

305、tely$148,compared to 2021,primarily attributable to our Other Internationaloperations.Interest Expense202220212020Interest expense.$158$171$160Interest expense primarily relates to Senior Notes and financing leases.Interest expense decreased in2022 due to repayment of the 2.300%Senior Notes on Decem

306、ber 1,2021.For more information on ourdebt arrangements,refer to the consolidated financial statements included in Item 8 of this Report.Interest Income and Other,Net202220212020Interest income.$61$41$89Foreign-currency transaction gains,net.106567Other,net.3846(4)Interest income and other,net.$205$

307、143$92The increase in interest income in 2022 was primarily due to higher global interest rates.Foreign-currencytransaction gains,net,include revaluation or settlement of monetary assets and liabilities by our Canadianand Other International operations and mark-to-market adjustments for forward fore

308、ign-exchangecontracts.See Derivatives and Foreign Currency sections in Note 1 to the consolidated financialstatements included in Item 8 of this Report.26Provision for Income Taxes202220212020Provision for income taxes.$1,925$1,601$1,308Effective tax rate.24.6%24.0%24.4%The effective tax rate for 20

309、22 was impacted by net discrete tax benefits of$130.This included$94 ofexcess tax benefits related to stock compensation.Excluding discrete net tax benefits,the tax rate was26.2%for 2022.The effective tax rate for 2021 was impacted by net discrete tax benefits of$163.This included$75 ofexcess tax be

310、nefits related to stock compensation,$70 related to the special cash dividend paid throughour 401(k)plan,and$19 related to a reduction in the valuation allowance against certain deferred taxassets.Excluding net discrete tax benefits,the tax rate was 26.4%for 2021.LIQUIDITY AND CAPITAL RESOURCESThe f

311、ollowing table summarizes our significant sources and uses of cash and cash equivalents:202220212020Net cash provided by operating activities.$7,392$8,958$8,861Net cash used in investing activities.(3,915)(3,535)(3,891)Net cash used in financing activities.(4,283)(6,488)(1,147)Our primary sources of

312、 liquidity are cash flows generated from our operations,cash and cash equivalents,and short-term investments.Cash and cash equivalents and short-term investments were$11,049 and$12,175 at the end of 2022 and 2021,respectively.Of these balances,unsettled credit and debit cardreceivables represented a

313、pproximately$2,010 and$1,816 at the end of 2022 and 2021.Thesereceivables generally settle within four days.Changes in foreign exchange rates impacted cash and cashequivalents negatively by$249 in 2022,and positively by$46 and$70 in 2021 and 2020.Material contractual obligations arising in the norma

314、l course of business primarily consist of purchaseobligations,long-term debt and related interest payments,leases,and construction and land purchaseobligations.See Notes 4 and 5 to the consolidated financial statements included in Item 8 of this Reportfor amounts outstanding on August 28,2022,relate

315、d to debt and leases.Purchase obligations consist of contracts primarily related to merchandise,equipment,and third-partyservices,the majority of which are due in the next 12 months.Construction and land purchase obligationsconsist of contracts primarily related to the development and opening of new

316、 and relocated warehouses,the majority of which(other than leases)are due in the next 12 months.Management believes that our cash and investment position and operating cash flows with capacity underexisting and available credit agreements will be sufficient to meet our liquidity and capital requirem

317、ents forthe foreseeable future.We believe that our U.S.current and projected asset position is sufficient to meetour U.S.liquidity requirements.27Cash Flows from Operating ActivitiesNet cash provided by operating activities totaled$7,392 in 2022,compared to$8,958 in 2021.Our cashflow provided by ope

318、rations is primarily from net sales and membership fees.Cash flow used inoperations generally consists of payments to merchandise suppliers,warehouse operating costs,including payroll and employee benefits,utilities,and credit and debit card processing fees.Cash used inoperations also includes payme

319、nts for income taxes.Changes in our net investment in merchandiseinventories(the difference between merchandise inventories and accounts payable)is impacted byseveral factors,including how fast inventory is sold,the forward deployment of inventory to acceleratedelivery times,payment terms with our s

320、uppliers,and early payments to obtain discounts from suppliers.Cash Flows from Investing ActivitiesNet cash used in investing activities totaled$3,915 in 2022,compared to$3,535 in 2021,and is primarilyrelated to capital expenditures.Net cash flows from investing activities also includes purchases an

321、dmaturities of short-term investments.Capital ExpendituresOur primary requirements for capital are acquiring land,buildings,and equipment for new and remodeledwarehouses.Capital is also required for information systems,manufacturing and distribution facilities,initial warehouse operations,and workin

322、g capital.In 2022,we spent$3,891 on capital expenditures,andit is our current intention to spend approximately$3,800 to$4,000 during fiscal 2023.These expendituresare expected to be financed with cash from operations,existing cash and cash equivalents,and short-term investments.We opened 26 new ware

323、houses,including three relocations,in 2022,and plan to openapproximately up to 29 additional new warehouses,including four relocations,in 2023.There can be noassurance that current expectations will be realized,and plans are subject to change upon further reviewof our capital expenditure needs or ba

324、sed on the economic environment.Cash Flows from Financing ActivitiesNet cash used in financing activities totaled$4,283 in 2022,compared to$6,488 in 2021.Cash flowsused in financing activities primarily related to the payment of dividends,payments to our former joint-venture partner for a dividend a

325、nd the purchase of their equity interest in Taiwan,totaling$1,050 in theaggregate,repayments of our 2.300%Senior Notes,repurchases of common stock,and withholdingtaxes on stock awards.Stock Repurchase ProgramsDuring 2022 and 2021,we repurchased 863,000 and 1,358,000 shares of common stock,at average

326、prices of$511.46 and$364.39,respectively,totaling approximately$442 and$495,respectively.Theseamounts may differ from the stock repurchase balances in the accompanying consolidated statements ofcash flows due to changes in unsettled stock repurchases at the end of each fiscal year.Purchases aremade

327、from time-to-time,as conditions warrant,in the open market or in block purchases and pursuant toplans under SEC Rule 10b5-1.Repurchased shares are retired,in accordance with the WashingtonBusiness Corporation Act.The remaining amount available to be purchased under our approved plan was$2,808 at the

328、 end of 2022.DividendsCash dividends declared in 2022 totaled$3.38 per share,as compared to$12.98 per share in 2021.Dividends in 2021 included a special dividend of$10.00 per share,aggregating approximately$4,430.InApril 2022,the Board of Directors increased our quarterly cash dividend from$0.79 to$

329、0.90 per share.28Bank Credit Facilities and Commercial Paper ProgramsWe maintain bank credit facilities for working capital and general corporate purposes.At August 28,2022,we had borrowing capacity under these facilities of$1,257.Our international operations maintain$773 ofthis capacity under bank

330、credit facilities,of which$176 is guaranteed by the Company.Short-termborrowings outstanding under the bank credit facilities were$88 and$41 at the end of 2022 and 2021.The Company has letter of credit facilities,for commercial and standby letters of credit,totaling$224.Theoutstanding commitments un

331、der these facilities at the end of 2022 totaled$184,most of which werestandby letters of credit that do not expire or have expiration dates within one year.The bank creditfacilities have various expiration dates,most within one year,and we generally intend to renew thesefacilities.The amount of borr

332、owings available at any time under our bank credit facilities is reduced by theamount of standby and commercial letters of credit outstanding.Off-Balance Sheet ArrangementsIn the opinion of management,we have no off-balance sheet arrangements that have had or arereasonably likely to have a material

333、current or future effect on our financial condition or financialstatements.Critical Accounting EstimatesThe preparation of our consolidated financial statements in accordance with U.S.generally acceptedaccounting principles(U.S.GAAP)requires that we make estimates and assumptions that affect thereported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at th