Summary: Costco Wholesale Corp. Jul 06

Standard & Poors, July 2006

Abstract
The ratings on Costco Wholesale Corp. reflect the Issaquah, Wash.-based company's strong business position and sound financial profile, mitigated by its participation in a highly competitive industry. Costco is the leading player in the wholesale club market, recording $53 billion in revenue for fiscal 2005 (ended Aug. 28, 2005). Costco's market position is followed by Sam's Club (a division of Wal-Mart Stores Inc.), which recorded $40 billion in sales in 2005. Warehouse clubs also compete with other discount formats, such as supercenters, discount department stores, and category killers. The membership warehouse business is a low-margin, high-volume concept with high barriers to entry that has produced good profitability and cash flow for Costco. The level of investment needed to build and...

Companies mentioned in this report are: Costco Wholesale Corp.
Action: Review

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This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.

Costco Wholesale Corp.

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