01—Abstract
Summary
Summary of the 10-Q filed June 5, 2025. Cited figures are marked; the original filing is the authoritative source.
Costco Wholesale Corporation reported robust financial performance for the third quarter and first thirty-six weeks of fiscal year 2025.
The company demonstrated strong top-line growth with an 8% increase in net sales to $61.965 billiona for the quarter and $185.480 billion year-to-date, driven by comparable sales growth of 6% and the opening of 29 new warehouses. Membership fee revenue also saw a healthy 10% increase to $1.240 billion in the quarter, signaling sustained member loyalty and the positive impact of recent membership fee adjustments. Profitability improved with net income rising to $1.903 billion for the quarter and $5.489 billion year-to-date, resulting in diluted earnings per share of $4.28 and $12.34, respectively.
This performance was supported by a 41 basis point increase in gross margin percentage for the quarter, despite some headwinds from LIFO charges and a one-time vacation expense. The company continued to invest in its business, with significant capital expenditures of $3.532 billionb year-to-date focused on warehouse expansion, and maintained a strong liquidity position with substantial cash and investments.
02—Key points
Key Highlights
- Net sales increased by 8% to $61.965 billion in Q3 FY25, driven by comparable sales growth of 6% and new warehouse openings.
- Membership fee revenue grew by 10% to $1.240 billion in Q3 FY25, benefiting from new members and fee increases.
- Net income rose to $1.903 billion in Q3 FY25 ($4.28 EPS), up from $1.681 billion ($3.78 EPS) in the prior year quarter.
- Gross margin percentage improved by 41 basis points in Q3 FY25, indicating better cost management and product mix.
- Cash flow from operating activities was strong at $9.468 billion for the first 36 weeks of FY25.
- Capital expenditures for the first 36 weeks of FY25 totaled $3.532 billion, with plans to spend over $5 billion in FY25 for expansion.
- The company declared a quarterly cash dividend of $1.30 per share, a 12% increase from the previous year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Costco Wholesale Corp kept $0.03.
- Revenue$63.20B100.0%
- Cost of revenue−$55.00B87.0%
- Gross profit$8.21B13.0%
- Operating costs−$5.68B9.0%
- Operating income$2.53B4.0%
- Interest, other & tax−$627.0M1.0%
- Net income$1.90B3.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed June 5, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $63.20B$58.52B | +8.0% |
| Cost of Revenue | $55.00B$51.17B | +7.5% |
| Gross Profit | $8.21B$7.34B | +11.8% |
| SG&A Expenses | $5.68B$5.14B | +10.4% |
| Operating Income | $2.53B$2.20B | +15.2% |
| Interest Expense | $35.00M$41.00M | −14.6% |
| Net Income | $1.90B$1.68B | +13.2% |
| EPS (Basic) | $4.29$3.79 | +13.2% |
| EPS (Diluted) | $4.28$3.78 | +13.2% |
| Shares Outstanding (Basic) | 443.96M443.89M | 0.0% |
| Shares Outstanding (Diluted) | 444.76M444.83M | 0.0% |
05—Questions
Frequently Asked Questions
What is the overall financial performance of Costco in the reported quarter?
Costco reported a strong third quarter of fiscal year 2025 with an 8% increase in net sales to $61.965 billion and a 10% increase in membership fee revenue to $1.240 billion. Net income also grew to $1.903 billion, or $4.28 per diluted share, demonstrating continued operational strength and profitability.
How is the company managing its costs and margins?
Costco saw a positive increase in gross margin percentage by 41 basis points in the third quarter, reaching 11.25%. This improvement was driven by core merchandise categories and warehouse ancillary services, partially offset by a LIFO charge and a one-time expense. Selling, general, and administrative expenses as a percentage of net sales increased slightly by 20 basis points, reflecting investments in employee wages and operational costs.
What are the key drivers of revenue growth?
Revenue growth is primarily driven by a 6% increase in comparable sales across the company, supported by new warehouse openings (29 net new warehouses since Q3 FY24). Membership fees, a significant contributor to profitability, also increased by 10% due to new member acquisition and recent membership fee adjustments.
How is Costco investing in its future growth?
The company is actively investing in expansion, with capital expenditures of $3.532 billion in the first 36 weeks of fiscal year 2025, and plans to spend over $5 billion in fiscal year 2025. These investments are focused on opening new warehouses and updating existing facilities to support future sales growth.
06—Continue