10-KPeriod: FY2024

COSTCO WHOLESALE CORP /NEW Annual Report, Year Ended Sep 1, 2024

Filed October 9, 2024For Securities:COST

Summary

Costco Wholesale Corporation (COST) reported its fiscal year 2024 results, demonstrating continued growth and operational resilience. The company expanded its global footprint by opening 30 new warehouses, contributing to a 5% increase in net sales, reaching $249.6 billion. This growth was driven by both comparable sales increases and contributions from new store openings, despite a slightly shorter fiscal year. Membership fee revenue also saw a healthy 5% rise, reflecting strong member loyalty and successful upgrades to Executive memberships. Key financial highlights include a 17% increase in net income to $7.4 billion and a significant improvement in gross margin percentage, up 35 basis points. This margin expansion was bolstered by contributions from ancillary businesses like e-commerce and gasoline, as well as operational efficiencies and the absence of prior-year one-time charges. The company also returned substantial value to shareholders through a special cash dividend and a 14% increase in its quarterly cash dividend, underscoring its financial strength and commitment to shareholder returns. Despite ongoing investments in wage increases and operational improvements, Costco maintained its focus on providing value to its members.

Financial Highlights

51 data points
Beta

Revenue

$254.45B

12.6% Gross Margin

Net Income

$7.37B

2.9% Net Margin

EPS (Diluted)

$16.56

Total Assets

$69.83B

Cash & Equivalents

$9.91B

Free Cash Flow

$6.63B

Financial Statements
Beta
Revenue$254.45B
Cost of Revenue$222.36B
Gross Profit$32.09B
SG&A Expenses$22.81B
Operating Income$9.29B
Interest Expense$169.00M
Net Income$7.37B
EPS (Basic)$16.59
EPS (Diluted)$16.56
Shares Outstanding (Basic)443.91M
Shares Outstanding (Diluted)444.76M

Key Highlights

  • 1Net sales grew 5% to $249.6 billion, driven by comparable sales increases and new warehouse openings.
  • 2Net income increased 17% to $7.4 billion, or $16.56 per diluted share.
  • 3Gross margin percentage improved by 35 basis points to 10.92%, benefiting from ancillary businesses and operational efficiencies.
  • 4Membership fee revenue increased 5% to $4.8 billion, supported by strong renewal rates and Executive membership upgrades.
  • 5The company opened 30 new warehouses globally, expanding its retail footprint.
  • 6Costco returned significant capital to shareholders through a $15 per share special cash dividend and a 14% increase in the quarterly dividend.
  • 7Effective September 1, 2024, membership fees in the U.S. and Canada were increased, with anticipated revenue uplift in fiscal 2025.

Frequently Asked Questions

In fiscal year 2024, Costco Wholesale Corporation demonstrated strong financial performance with a 5% increase in net sales to $249.6 billion and a 17% rise in net income to $7.4 billion ($16.56 per diluted share). The company also saw improvements in gross margin percentage and continued growth in membership revenue.

The membership program remains a core strength, with membership fee revenue increasing by 5%. Renewal rates remained high at 92.9% in the U.S. and Canada and 90.5% worldwide. Effective September 1, 2024, Costco increased its annual membership fees in the U.S. and Canada, which is expected to contribute to revenue growth in fiscal year 2025.

Costco's growth strategy centers on providing members with high-quality merchandise at low prices and expanding its physical presence. In fiscal year 2024, this was evident through the opening of 30 new warehouses globally, contributing to overall net sales growth. The company also continues to invest in its e-commerce operations and ancillary services like gasoline and pharmacy.

Costco managed costs effectively while investing in its employees. While Selling, General, and Administrative (SG&A) expenses as a percentage of net sales saw a slight increase due to wage hikes, improvements in productivity and sales leverage helped to mitigate some of the impact. The company's core strategy of high sales volume and rapid inventory turnover, combined with operational efficiencies, continues to be key to managing its low-margin business model.