Costco(US:COST)2025-06-04 23:10Financial Performance - Net sales increased by 8% to $61,965 million in the third quarter of 2025, driven by a 6% increase in comparable sales and sales from 29 new warehouses opened since the end of the third quarter of 2024[77]. - Membership fee revenue rose by 10% to $1,240 million, primarily due to new member sign-ups and membership fee increases[77]. - Gross margin percentage increased by 41 basis points, with a 29 basis point increase excluding the impact of gasoline price deflation on net sales[77]. - Net income increased to $1,903 million, or $4.28 per diluted share, compared to $1,681 million, or $3.78 per diluted share in 2024[77]. - Comparable sales increased by 6% in both the third quarter and the first thirty-six weeks of 2025, supported by a 5% increase in shopping frequency[83]. - E-commerce sales grew by 15% in the third quarter of 2025, reflecting strong online performance[78]. - Lower gasoline prices negatively impacted net sales by $642 million during the third quarter of 2025, with an average price per gallon decreasing by 9%[80]. - Changes in foreign currencies negatively impacted net sales by approximately $699 million during the third quarter of 2025[81]. Expenses and Margins - SG&A expenses as a percentage of net sales increased by 20 basis points, with an 11 basis point increase excluding the impact of gasoline price deflation[77]. - SG&A expenses for Q3 2025 were $5,679 million, representing 9.16% of net sales, an increase of 20 basis points year-over-year[93]. - Interest expense decreased to $35 million in Q3 2025 from $41 million in Q3 2024, primarily due to the repayment of Senior Notes[96]. - Gross margin for Q3 2025 was $6,969 million, with a gross margin percentage of 11.25%, an increase of 41 basis points from the previous year[86]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $9,468 million for the first thirty-six weeks of 2025, compared to $8,381 million for the same period in 2024[100]. - Capital expenditures in the first thirty-six weeks of 2025 totaled $3,532 million, with plans to exceed $5,000 million for the fiscal year[106]. - The company repurchased 658,000 shares of common stock in the first thirty-six weeks of 2025 at an average price of $946.64 per share, totaling approximately $623 million[109]. Dividends and Tax - A quarterly cash dividend of $1.30 per share was declared, representing a 12% increase[77]. - A quarterly cash dividend of $1.30 per share was declared on April 16, 2025, and paid on May 16, 2025[108]. - The effective tax rate for the first thirty-six weeks of 2025 was 26.2%, influenced by discrete tax benefits of $100 million related to stock compensation[98]. Future Plans and Commitments - The company plans to open ten additional new warehouses in the remainder of fiscal 2025, following the opening of 17 new warehouses in the first thirty-six weeks[106]. - As of May 11, 2025, the company has a borrowing capacity of $1,176 million under bank credit facilities, with $681 million attributed to international operations[110]. - Outstanding commitments under letter of credit facilities totaled $205 million at the end of Q3 2025, primarily consisting of standby letters of credit[111]. - The company intends to renew most of its bank credit facilities, which have various expiration dates, mostly within one year[111]. Accounting and Risk Management - There have been no material changes to critical accounting estimates since the last Annual Report for the fiscal year ended September 1, 2024[112]. - The company has direct exposure to financial market risks from fluctuations in foreign-currency exchange rates and interest rates, with no material changes reported[114].