Costco Wholesale Corp Q3 2025 Earnings Transcript Summary
Highlights
- Net Income: $1.9 billion (+13% YoY)
- EPS: $4.28 per diluted share (+13% YoY)
- Net Sales: $61.96 billion (+8% YoY)
- U.S. Comparable Sales: +6.6% or +7.9% excluding gas deflation
- Canada Comp Sales: +2.9% or +7.8% adjusted
- Other International Comp Sales: +3.2% or +8.5% adjusted
- E-commerce Comp Sales: +14.8% or +15.7% adjusted
- Membership Fee Income: $1.24 billion (+10.4% YoY)
- Gross Margin: 11.25% (+41 basis points YoY)
Costco's Strong Performance in Q3 2025
Costco Wholesale Corporation has once again demonstrated its robust business model and strong sales practices in Q3 2025, delivering impressive financial results despite facing economic headwinds. The retailer reported a net income of $1.9 billion, up over 13% from last year, reflecting Costco's ability to maintain high sales volumes and profitability in challenging times.
Net sales surged to $61.96 billion, marking an 8% increase year over year. This growth was supported by a notable uplift in U.S. comparable sales at 6.6% (7.9% excluding gas deflation), showcasing strong consumer demand across its core domestic market. Globally, comparable sales gains were also strong, with Canada and other international markets adjusting upwards significantly when factoring out gas deflation and foreign exchange effects.
Digital channels continue to be a growing contributor to Costco's performance, with e-commerce comparable sales climbing by an adjusted rate of 15.7%. This digital growth is a testament to Costco's successful integration of traditional and modern retail practices, ensuring customer engagement across multiple platforms.
Costco's membership base remains a critical pillar of its business, as evidenced by the 10.4% increase in membership fee income, reaching $1.24 billion. The global renewal rate held strong at 90.2%, underscoring the brand's ability to retain loyal members.
Perhaps most impressively, Costco delivered an improved gross margin of 11.25%, up 41 basis points from last year. This margin expansion reflects efficiencies achieved in Costco’s operations, including strategic management of fresh department costs and savvy navigation of fluctuating commodity prices, particularly in food and sundries.
In a period marked by economic uncertainty and evolving consumer behaviors, Costco’s performance signals not only resilience but an adeptness at leveraging its buying power and strategic agility in global sourcing to deliver continued shareholder value.
Investors take note: Costco's focus on price competitiveness and membership loyalty strategies continues to yield impressive financial results quarter after quarter.