Sales Performance - Net sales reached $62.5 billion, representing a 9.1% growth[4] - Comparable sales increased by 6.8%[4] - E-commerce comparable sales grew by 20.9%, and adjusted e-commerce comparable sales (excluding FX impacts) increased by 22.2%[4] - US comparable sales increased by 8.3%, while adjusted US comparable sales increased by 8.6%[6] - Comparable ticket increased by 1.0%, while adjusted comparable ticket increased by 3.2%[4] - Comparable traffic increased by 5.7%[4] Financial Highlights - Gross margin was 10.85%, a 5 bps increase compared to Q2 FY'24[7] - Net income diluted EPS was $1.79 billion, a 2.6% growth[7] Membership Metrics - Membership income grew by 7.4%, or 9.4% excluding FX impacts[9] - Worldwide membership renewal rate was 90.5%, with the US/CN renewal rate at 93.0%[9] - Paid memberships reached 78.4 million, a 6.8% increase[9] - Total cardholders reached 140.6 million, a 6.6% increase[9] - Executive memberships totaled 36.9 million, with a penetration of sales to executive members at 73.8%[9] Warehouse Expansion - The company plans to expand to a total of 915 warehouses by the end of FY'25, with 629 in the US, 111 in Canada and 175 in other international locations[14]

Financial Data and Key Metrics Changes - Net income for Q2 2025 was $1.788 billion or $4.02 per diluted share, up from $1.743 billion or $3.92 per diluted share in the same quarter last year, reflecting an 8.4% growth when excluding a prior year tax benefit [17][18] - Operating income increased by 12.3% year-over-year, while net sales rose to $62.53 billion, a 9.1% increase from $57.33 billion [21][18] - Membership fee income grew by 7.4% year-over-year to $1.193 billion, with a 9.4% increase when excluding foreign exchange impacts [25] Business Line Data and Key Metrics Changes - US comparable sales increased by 8.3%, while Canada comp sales rose by 4.6% [21] - E-commerce comp sales surged by 20.9%, indicating strong growth in online sales [22] - Non-foods category saw mid-teens comparable sales growth, with significant performance in consumer electronics and gaming products [38] Market Data and Key Metrics Changes - Traffic increased by 5.7% worldwide and 5.6% in the US, with average transaction value up by 1% globally [23] - Foreign exchange negatively impacted sales by approximately 2.1%, while gas price deflation had a minor impact of 0.1% [22] - International business, particularly in Canada, delivered record results on a constant currency basis despite foreign exchange fluctuations [13] Company Strategy and Development Direction - The company plans to open 28 new warehouses in fiscal year 2025, with a focus on expanding gas station hours to enhance member convenience [9][10] - A new employee agreement was implemented to provide industry-leading pay and benefits, reflecting the company's commitment to its workforce [11][12] - The company aims to leverage its global buying power and strong supplier relationships to maintain value for members amid inflationary pressures [14] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers remain focused on quality and value, with a willingness to spend, although they are becoming more selective [66] - The company is closely monitoring the impact of tariffs and inflation on consumer behavior and is prepared to adjust strategies accordingly [67][86] - Management expressed confidence in the long-term growth potential of international markets, with plans for continued expansion [101] Other Important Information - Capital expenditures for Q2 were approximately $1.14 billion, with an estimated full-year CapEx of around $5 billion [38] - The company reported a slight increase in gross margin, with a reported rate of 10.85% for Q2 [29] - Inflation was noted to be low single digits overall, with fresh foods experiencing the highest inflation [46][140] Q&A Session Summary Question: Impact of consumer behavior on discretionary and non-discretionary spending - Management indicated that consumers are still willing to spend but are more selective, particularly in light of rising prices for certain goods [66] Question: Core margin trends and inflationary pressures - Management stated that while core on core margins were down slightly, overall gross margin improved, and they remain committed to investing in member value [78] Question: Weather impact on sales - Management acknowledged some weather-related impacts but noted that they were able to recover most of the sales lost due to adverse weather conditions [85] Question: Strategy regarding tariffs and sourcing - Management indicated a dual strategy of accepting some cost increases while also seeking alternative sourcing options to mitigate tariff impacts [92] Question: Long-term international growth prospects - Management expressed optimism about international growth, with plans for new warehouse openings in various global markets [101] Question: Performance of general merchandise and electronics - Management noted that while consumer electronics are experiencing sluggish growth, there are opportunities for innovation and market share growth [107] Question: Kirkland Signature product introductions - Management highlighted the potential for growth in non-food categories and the strategic approach to introducing new Kirkland Signature items [120]

Core Insights - The Trump administration's tariffs on Canada and Mexico create uncertainty for Costco, but the company is well-prepared to handle potential impacts due to its strong supplier partnerships and nimble operations [1][2]. Financial Performance - Costco's second-quarter net sales increased by 9.1% to $62.53 billion, with net sales for the first 24 weeks of fiscal 2025 rising by 8.3% to $123.52 billion [4]. - Comparable sales grew by 6.8%, with U.S. sales up 8.3% and Canadian sales up 4.6%. eCommerce sales surged by 20.9% [5]. - February sales rose by 8.8% to $19.81 billion [5]. Membership and Customer Engagement - Membership income increased by 7.4%, with renewal rates at 90.5% globally and 93.0% in the U.S. and Canada [6]. - Paid memberships rose by 6.8% to 78.4 million, while total cardholders grew by 6.6% to 140.6 million. Executive memberships accounted for 36.9 million cardholders, representing 73.8% of worldwide sales [7]. Digital Growth - Digital metrics showed significant improvements, including a 13% increase in site traffic, a 10% rise in average order value, and a 19% increase in logistics deliveries [8]. - A new digital multi-vendor mailer is enhancing member engagement by allowing more targeted marketing [9]. Store Expansion - Costco plans to open 28 new stores by the end of fiscal 2025, currently operating 897 warehouses, including 617 in the U.S. and Puerto Rico, and 109 in Canada [7].

Core Viewpoint - Costco reported a revenue of $63.72 billion for the quarter ended February 2025, marking a 9% year-over-year increase, with an EPS of $4.02 compared to $3.71 a year ago, indicating strong financial performance despite a slight EPS miss against consensus estimates [1] Financial Performance - Revenue of $63.72 billion exceeded the Zacks Consensus Estimate of $63.22 billion by 0.79% [1] - EPS of $4.02 was below the consensus estimate of $4.09, resulting in an EPS surprise of -1.71% [1] - Membership fees revenue was reported at $1.19 billion, slightly below the average estimate of $1.21 billion, but showed a year-over-year increase of 7.4% [4] - Net sales revenue reached $62.53 billion, surpassing the average estimate of $62.08 billion, reflecting a year-over-year growth of 9.1% [4] Comparable Sales Metrics - Total comparable sales increased by 9.1%, outperforming the eight-analyst average estimate of 6.6% [4] - U.S. comparable sales rose by 8.3%, exceeding the average estimate of 6% [4] - Comparable sales in Canada increased by 4.6%, falling short of the average estimate of 6.1% [4] - Comparable sales for Other International markets were reported at 1.7%, significantly below the average estimate of 5.7% [4] Warehouse Metrics - Total number of warehouses worldwide was reported at 897, slightly below the average estimate of 903 [4] - In the U.S. and Puerto Rico, the number of warehouses was 617, compared to the estimated 620 [4] Stock Performance - Costco shares returned +0.5% over the past month, while the Zacks S&P 500 composite declined by -3.5% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Core Insights - Costco reported strong quarterly revenue of over $62.5 billion, a 9.1% increase from $57.3 billion year-over-year, primarily driven by increased store visits [1] - Despite the revenue growth, the company missed earnings per share expectations, resulting in a 1.5% decline in stock price during after-hours trading [1] Financial Performance - Net sales for the quarter exceeded $62.5 billion, reflecting a 9.1% increase compared to the same period last year [1] - The company added 1 million new paid memberships, raising the renewal rate to 93% in the US and Canada [3][5] Operational Insights - CEO Ron Vachris indicated that the company would work to minimize cost increases due to tariffs, noting that less than one-sixth of products sold in the US are imported from China, Mexico, and Canada [2] - CFO Gary Millerchip mentioned that uncertainty around tariffs led to increased inventory purchases, which contributed to higher supply chain costs during the quarter [2] Customer Engagement - Foot traffic data showed a 7.7% increase in visits to Costco, significantly outpacing increases at Walmart and Target [3] - Web and app sales also saw an uptick, with 43 million visits recorded to the new warehouse inventory tool during the fiscal second quarter [3] Future Plans - The company plans to open 12 additional US locations, including its 900th warehouse, along with two in Canada and four in other international markets [4]

Core Insights - Costco reported quarterly earnings of $4.02 per share, missing the Zacks Consensus Estimate of $4.09 per share, but showing an increase from $3.71 per share a year ago, resulting in an earnings surprise of -1.71% [1] - The company posted revenues of $63.72 billion for the quarter ended February 2025, surpassing the Zacks Consensus Estimate by 0.79% and increasing from $58.44 billion year-over-year [2] - Costco shares have increased by approximately 14.4% since the beginning of the year, contrasting with a -0.7% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.25, with expected revenues of $62.76 billion, and for the current fiscal year, the EPS estimate is $18.03 on revenues of $273.31 billion [7] - The estimate revisions trend for Costco is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Retail - Discount Stores industry, to which Costco belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Another company in the same industry, Dollar Tree, is expected to report quarterly earnings of $2.18 per share, reflecting a year-over-year decline of -14.5% [9]

Core Insights - Costco Wholesale reported strong earnings with a net sales increase of 9.1% year-over-year, reaching $62.53 billion, driven by robust sales growth and e-commerce performance [2][5] - Membership fees contributed an additional $1.193 billion, reflecting a 7.3% increase, while net income grew modestly to $1.788 billion, influenced by prior year's one-time tax benefits [2][6] - The company maintains a high membership renewal rate of 92.9% in the U.S. and 90.5% globally, emphasizing customer loyalty as a key component of its business model [3] Financial Performance - For Q2 2025, Costco's diluted EPS was $4.02, a 2.6% increase from $3.92 in Q2 2024 [3] - Revenue for the quarter was $63.72 billion, up from $58.44 billion in the same quarter last year, marking a 9% year-over-year increase [3] - Operating income was reported at $2.316 billion, with comparable sales growth of 6.8% across the company [6] Business Model and Strategy - Costco operates under a membership model that offers bulk products at discounted rates, heavily relying on membership fees to drive customer loyalty [3][4] - The company employs strategies such as rapid inventory turnover and cross-docking to maintain operational efficiency and keep costs low [4] - The Kirkland Signature private label is utilized to enhance margins through high-quality offerings, supporting Costco's cost leadership in the retail sector [4] Market Performance - The U.S. market experienced an 8.6% growth in comparable sales, indicating strong domestic demand [6] - E-commerce sales surged by 20.9%, contributing significantly to overall sales growth [5] - Canadian and international segments showed varied performance, with Canada achieving a 10.5% growth and other international operations at 10.3% adjusted growth [6] Future Outlook - Management has a positive outlook for fiscal 2025, planning to open 29 new warehouses to expand its international presence and product offerings [7]

Core Insights - Costco reported an earnings miss but exceeded revenue expectations for the second quarter [1][3] Revenue Performance - Second-quarter revenue increased by 9% to $63.72 billion, up from $58.44 billion in the same quarter of fiscal 2024 [1] - Net sales for the quarter rose by 9.1% to $62.53 billion, compared to $57.33 billion in the year-ago period [1] Net Income and Earnings Per Share - Net income for the second quarter was $1.79 billion, or $4.02 per share, compared to $1.74 billion, or $3.92 per share, during the second quarter of fiscal 2024 [2] - Earnings per share were $4.02, which was below the expected $4.11 [3] Comparable Sales - Quarterly comparable sales increased by 6.8% year over year, with an 8.3% increase in the U.S. [2] - E-commerce comparable sales rose by 20.9% year over year [2]

Core Insights - Costco Wholesale Corporation reported a net sales increase of 9.1% for the second quarter of fiscal 2025, reaching $62.53 billion compared to $57.33 billion in the same period last year [1] - For the first 24 weeks of fiscal 2025, net sales rose by 8.3% to $123.52 billion from $114.05 billion [1] Sales Performance - Comparable sales for the second quarter showed an increase of 6.8% for the total company, with U.S. sales up 8.3% and Canadian sales up 4.6% [2] - E-commerce sales experienced significant growth, with a 20.9% increase in the second quarter [2] - For the four-week reporting month of February, net sales were $19.81 billion, an increase of 8.8% from $18.21 billion last year [3] Profitability - Net income for the second quarter was $1,788 million, or $4.02 per diluted share, compared to $1,743 million, or $3.92 per diluted share, in the previous year [2] - The first 24 weeks net income was $3.59 billion, or $8.06 per diluted share, compared to $3.33 billion, or $7.49 per diluted share, last year [2] Operational Metrics - Costco operates 897 warehouses globally, with 617 located in the U.S. and Puerto Rico [3] - The company reported total revenue of $63.72 billion for the second quarter, up from $58.44 billion last year [8] Cash Flow and Financial Position - Net cash provided by operating activities for the first 24 weeks was $6.008 billion, an increase from $5.382 billion in the previous year [11] - Cash and cash equivalents at the end of the reporting period were $12.356 billion, up from $9.906 billion at the beginning of the year [10]

Market Overview - The S&P 500 has experienced a dip due to tariff concerns and inflation worries, with the Cboe Volatility Index (VIX) rising above 20 [1] - Despite a strong fourth-quarter earnings season, investor confidence has been shaken, as indicated by the American Association of Individual Investors (AAII) survey showing a high number of net bears [4][5] Consumer Sentiment - The University of Michigan's Consumer Sentiment index fell by 10%, reflecting household concerns over potential inflation from tariffs [3] - The Conference Board reported a significant drop in household confidence, the largest since 2021, indicating a disconnect between CEO confidence and consumer sentiment [3] Corporate Earnings and Economic Indicators - The fourth-quarter earnings season showed the best bottom-line growth for the S&P 500 since 2021, driven by companies like NVIDIA [2] - Costco reported a strong 9.8% increase in January sales, suggesting resilience in consumer spending despite broader economic concerns [7][8] - Taiwan Semiconductor's revenue report is anticipated to provide insights into the semiconductor industry's health, following NVIDIA's mixed earnings reaction [9] Upcoming Reports and Expectations - Upcoming earnings reports from major firms, including Costco and Taiwan Semiconductor, are expected to provide critical data on consumer behavior and industry performance [12] - Asset managers like Invesco and T. Rowe Price are set to release AUM reports that could reflect market trends and investor sentiment [10][11]