01—Abstract
Summary
Summary of the 10-K filed October 9, 2024. Cited figures are marked; the original filing is the authoritative source.
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 billiona. 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 billionb 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%c 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.
02—Key points
Key Highlights
- Net sales grew 5% to $249.6 billion, driven by comparable sales increases and new warehouse openings.
- Net income increased 17% to $7.4 billion, or $16.56 per diluted share.
- Gross margin percentage improved by 35 basis points to 10.92%, benefiting from ancillary businesses and operational efficiencies.
- Membership fee revenue increased 5% to $4.8 billion, supported by strong renewal rates and Executive membership upgrades.
- The company opened 30 new warehouses globally, expanding its retail footprint.
- Costco returned significant capital to shareholders through a $15 per share special cash dividend and a 14% increase in the quarterly dividend.
- Effective September 1, 2024, membership fees in the U.S. and Canada were increased, with anticipated revenue uplift in fiscal 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Costco Wholesale Corp kept $0.03.
- Revenue$254.45B100.0%
- Cost of revenue−$222.36B87.4%
- Gross profit$32.09B12.6%
- Operating costs−$22.81B9.0%
- Operating income$9.29B3.6%
- Interest, other & tax−$1.92B0.8%
- Net income$7.37B2.9%
Where FY2024 revenue went
$254.45B- Cost of revenue: $222.36B, 87% of revenue
- Net income: $7.37B, 2.9% of revenue
- SG&A: $22.81B, 9.0% of revenue
- Interest, other & tax: $1.92B, 0.8% of revenue
Kept 2.9% as net incomeNet income $7.37B · 2.9%Interest, other & tax $1.92B · 0.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed October 9, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $254.45B$242.29B | +5.0% |
| Cost of Revenue | $222.36B$212.59B | +4.6% |
| Gross Profit | $32.09B$29.70B | +8.0% |
| SG&A Expenses | $22.81B$21.59B | +5.7% |
| Operating Income | $9.29B$8.11B | +14.4% |
| Interest Expense | $169.00M$160.00M | +5.6% |
| Net Income | $7.37B$6.29B | +17.1% |
| EPS (Basic) | $16.59$14.18 | +17.0% |
| EPS (Diluted) | $16.56$14.16 | +16.9% |
| Shares Outstanding (Basic) | 443.91M443.85M | 0.0% |
| Shares Outstanding (Diluted) | 444.76M444.45M | +0.1% |
05—Questions
Frequently Asked Questions
What was Costco's overall financial performance in fiscal year 2024?
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.
How did Costco's membership program perform, and what changes were made?
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.
What is Costco's strategy for growth, and how was it reflected in 2024?
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.
How did Costco manage costs and expenses in 2024?
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.
06—Continue