Costco(US:COST)2025-12-17 22:12Financial Performance - Net sales increased by 8% to $65,978 million, driven by a 6% increase in comparable sales and sales from 25 net new warehouses opened since the end of Q1 2025[75]. - Membership fee revenue rose by 14% to $1,329 million, primarily due to membership fee increases and new member sign-ups, with total paid members reaching 81,400,000[79][80]. - Gross margin increased to $7,468 million, with a gross margin percentage of 11.32%, up from 11.28% in the previous year[82]. - Comparable sales growth was 6% for the total company, with increases of 6% in the U.S., 7% in Canada, and 9% in Other International markets[76]. - Digitally-enabled comparable sales surged by 21%, reflecting strong performance in e-commerce initiatives[77]. - The volume of gasoline sold increased by approximately 4%, contributing positively to net sales by $234 million[77]. Membership and Renewal - The renewal rate for memberships was 92.2% in the U.S. and Canada, and 89.7% worldwide, impacted by a higher number of memberships sold online[80]. Operational Costs - SG&A expenses as a percentage of net sales increased by one basis point, indicating a slight rise in operational costs relative to sales[75]. - SG&A expenses totaled $6,334 million, with SG&A as a percentage of net sales at 9.60%[86]. Gross Margin Analysis - Gross margin as a percentage of net sales increased by four basis points, with a similar increase when excluding gasoline price deflation[83]. - Gross margin in core merchandise categories increased by 30 basis points across all categories[84]. Tax and Interest - The effective tax rate for the quarter was 22.5%, slightly up from 22.0% in the prior year[75]. - The effective tax rate for the first quarter was 22.5%, influenced by discrete tax benefits related to stock compensation[91]. - Interest income increased to $122 million, up from $96 million, due to higher cash balances[90]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $4,688 million, compared to $3,260 million in the prior year[92]. - Capital expenditures in the first quarter totaled $1,526 million, with a planned total of approximately $6,500 million for fiscal 2026[98]. Shareholder Returns - A quarterly cash dividend of $1.30 per share was declared and paid on November 14, 2025[100]. - The share repurchase program authorized $4,000 million, with $210 million spent on repurchases in the first quarter[101]. Warehouse Expansion - The company opened eight new warehouses, including one relocation, resulting in a net increase of seven warehouses[75]. - The company opened eight new warehouses in the first quarter and plans to open 25 additional warehouses in fiscal 2026[98].