Moody's Upgrades Costco Outlook

SN STAFF

NEW YORK — Moody's Investors Service here said Thursday it has affirmed the A2 senior unsecured rating of Costco Wholesale Corp., Issaquah, Wash., and upgraded its outlook from stable to positive.

According to Charlie O'Shea, senior analyst, the raised outlook recognizes the strength of Costco's operating performance, which he said Moody's expects will continue, as well as the balanced nature of its financial policy, especially with respect to returns to shareholders.

"Costco has demonstrated the resilience of its business model during all types of economic conditions, with its concept clearly resonating with consumers," O'Shea said. "Moody's also feel the historically conservative and balanced financial policy, with respect to both growth strategy and returns to shareholders, will continue for at least the intermediate term."

The positive outlook also reflects the expectation Costco will maintain current levels of operating performance and debt protection measures, Moody's said.

Moody's said the A2 rating recognizes Costco's position as the leading warehouse club operator in North America, its world-class operating capability and its excellent liquidity.