10-QPeriod: Q3 FY2025

COSTCO WHOLESALE CORP /NEW Quarterly Report for Q3 Ended May 11, 2025

Filed June 5, 2025For Securities:COST

Summary

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 billion 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 billion year-to-date focused on warehouse expansion, and maintained a strong liquidity position with substantial cash and investments.

Financial Highlights

49 data points
Beta

Revenue

$63.20B

13.0% Gross Margin

Net Income

$1.90B

3.0% Net Margin

EPS (Diluted)

$4.28

Total Assets

$75.48B

Cash & Equivalents

$13.84B

Free Cash Flow

$2.33B

Financial Statements
Beta
Revenue$63.20B
Cost of Revenue$55.00B
Gross Profit$8.21B
SG&A Expenses$5.68B
Operating Income$2.53B
Interest Expense$35.00M
Net Income$1.90B
EPS (Basic)$4.29
EPS (Diluted)$4.28
Shares Outstanding (Basic)443.96M
Shares Outstanding (Diluted)444.76M

Key Highlights

  • 1Net sales increased by 8% to $61.965 billion in Q3 FY25, driven by comparable sales growth of 6% and new warehouse openings.
  • 2Membership fee revenue grew by 10% to $1.240 billion in Q3 FY25, benefiting from new members and fee increases.
  • 3Net 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.
  • 4Gross margin percentage improved by 41 basis points in Q3 FY25, indicating better cost management and product mix.
  • 5Cash flow from operating activities was strong at $9.468 billion for the first 36 weeks of FY25.
  • 6Capital expenditures for the first 36 weeks of FY25 totaled $3.532 billion, with plans to spend over $5 billion in FY25 for expansion.
  • 7The company declared a quarterly cash dividend of $1.30 per share, a 12% increase from the previous year.

Frequently Asked Questions

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.

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.

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.

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.