[Operating Results Overview](index=1&type=section&id=Operating%20Results%20Overview) This section presents Costco's financial and operational performance for Q4 and FY2025, including sales, income, and global footprint [Financial Highlights (Q4 and FY2025)](index=1&type=section&id=Financial%20Highlights%20%28Q4%20and%20FY2025%29) Costco reported strong financial performance for both the fourth quarter and the full fiscal year 2025, with significant increases in net sales, comparable sales across all regions and e-commerce, and net income per diluted share [Net Sales Performance](index=1&type=section&id=Net%20Sales%20Performance) This section details Costco's net sales figures and year-over-year growth for the recent quarter and full fiscal year | Metric | 16 Weeks Ended Aug 31, 2025 | 16 Weeks Ended Sep 1, 2024 | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Sales | $84.4 billion | $78.2 billion | $269.9 billion | $249.6 billion | | YoY Growth | 8.0% | - | 8.1% | - | [Comparable Sales Performance](index=1&type=section&id=Comparable%20Sales%20Performance) This section analyzes Costco's comparable sales growth across various regions and e-commerce, both reported and adjusted | Region | 16 Weeks | 16 Weeks Adjusted* | 52 Weeks | 52 Weeks Adjusted* | | :---------------- | :------- | :----------------- | :------- | :----------------- | | U.S. | 5.1% | 6.0% | 6.2% | 7.3% | | Canada | 6.3% | 8.3% | 5.0% | 8.3% | | Other International | 8.6% | 7.2% | 4.8% | 8.2% | | Total Company | 5.7% | 6.4% | 5.9% | 7.6% | | E-commerce | 13.6% | 13.5% | 15.6% | 16.1% | *Excluding the impacts from changes in gasoline prices and foreign exchange. [Net Income and Earnings Per Share](index=1&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) This section presents Costco's net income and diluted earnings per share for the recent quarter and full fiscal year | Metric | 16 Weeks Ended Aug 31, 2025 | 16 Weeks Ended Sep 1, 2024 | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income | $2.610 billion | $2.354 billion | $8.099 billion | $7.367 billion | | Diluted EPS | $5.87 | $5.29 | $18.21 | $16.56 | - Last year's Q4 results included a net non-recurring tax benefit of **$63 million**, or **$0.14 per diluted share**, related to a transfer pricing settlement and true-ups of tax reserves[3](index=3&type=chunk) [Operational Footprint](index=1&type=section&id=Operational%20Footprint) As of August 31, 2025, Costco operates 914 warehouses globally, with a significant presence in the United States and Canada, alongside a growing international and e-commerce footprint - Costco currently operates **914 warehouses globally**, including **629 in the United States and Puerto Rico**, **110 in Canada**, 42 in Mexico, 37 in Japan, 29 in the United Kingdom, 20 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, two in Sweden, and one each in Iceland and New Zealand[4](index=4&type=chunk) - The Company also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia[4](index=4&type=chunk) [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) A conference call was scheduled for September 25, 2025, to discuss the operating results, with webcast access available for investors - A conference call to discuss these results was scheduled for **2:00 p.m. (PT) on September 25, 2025**, and was available via a webcast on investor.costco.com[5](index=5&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section provides a comprehensive overview of Costco's financial health through its consolidated income statements, balance sheets, and cash flow statements [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income detail Costco's revenue, operating expenses, and net income figures for the 16-week and 52-week periods ending August 31, 2025, and September 1, 2024, showing year-over-year growth in key profitability metrics | Metric (in millions) | 16 Weeks Ended Aug 31, 2025 | 16 Weeks Ended Sep 1, 2024 | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $84,432 | $78,185 | $269,912 | $249,625 | | Membership fees | $1,724 | $1,512 | $5,323 | $4,828 | | Total revenue | $86,156 | $79,697 | $275,235 | $254,453 | | Operating income | $3,341 | $3,042 | $10,383 | $9,285 | | Net income | $2,610 | $2,354 | $8,099 | $7,367 | | Diluted EPS | $5.87 | $5.29 | $18.21 | $16.56 | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide a snapshot of Costco's financial position as of August 31, 2025, and September 1, 2024, highlighting increases in total assets and equity, reflecting business expansion and retained earnings | Metric (in millions) | August 31, 2025 | September 1, 2024 | | :------------------- | :---------------- | :---------------- | | Cash and cash equivalents | $14,161 | $9,906 | | Total current assets | $38,380 | $34,246 | | Property and equipment, net | $31,909 | $29,032 | | TOTAL ASSETS | $77,099 | $69,831 | | Total current liabilities | $37,108 | $35,464 | | TOTAL LIABILITIES | $47,935 | $46,209 | | Retained earnings | $22,650 | $17,619 | | TOTAL EQUITY | $29,164 | $23,622 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows illustrate the movement of cash for the 52-week periods ending August 31, 2025, and September 1, 2024, indicating strong cash generation from operating activities and significant investments in property and equipment | Metric (in millions) | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $13,335 | $11,339 | | Net cash used in investing activities | $(5,311) | $(4,409) | | Net cash used in financing activities | $(3,775) | $(10,764) | | Net change in cash and cash equivalents | $4,255 | $(3,794) | | CASH AND CASH EQUIVALENTS END OF YEAR | $14,161 | $9,906 | [Additional Information](index=2&type=section&id=Additional%20Information) This section includes important disclosures regarding forward-looking statements and investor contact details [Forward-Looking Statements Disclaimer](index=2&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section outlines the nature of forward-looking statements within the document, emphasizing the inherent risks and uncertainties that could cause actual results to differ materially from projections - The document contains forward-looking statements regarding future activities, events, conditions, or developments, which are subject to risks and uncertainties that may cause actual results to differ materially[6](index=6&type=chunk) - These risks include economic conditions, competition, financial market uncertainties, consumer spending, security breaches, real estate conditions, rising costs, geopolitical conditions, and regulatory impacts[6](index=6&type=chunk) - The Company does not undertake to update these statements, except as required by law[6](index=6&type=chunk) [Company Contacts](index=2&type=section&id=Company%20Contacts) Contact information for Costco Wholesale Corporation investor relations is provided for further inquiries - For investor inquiries, contacts are **Josh Dahmen at 425/313-8254** and **Andrew Yoon at 425/313-6305**[7](index=7&type=chunk)

Core Insights - Costco Wholesale Corporation reported a net sales increase of 8.0% for the fourth quarter, reaching $84.4 billion, compared to $78.2 billion in the previous year. For the fiscal year, net sales rose by 8.1% to $269.9 billion from $249.6 billion [1] Sales Performance - Comparable sales for the fourth quarter showed a total company increase of 5.7%, with U.S. sales up by 5.1%, Canada by 6.3%, and Other International by 8.6%. For the fiscal year, total company comparable sales increased by 5.9% [2] - E-commerce sales experienced significant growth, with a 13.6% increase in the fourth quarter and a 15.6% increase for the fiscal year [2] Profitability - Net income for the fourth quarter was $2.610 billion, or $5.87 per diluted share, compared to $2.354 billion, or $5.29 per diluted share, in the previous year. The fiscal year net income was $8.099 billion, or $18.21 per diluted share, up from $7.367 billion, or $16.56 per diluted share [3] Operational Footprint - Costco operates a total of 914 warehouses globally, with 629 located in the United States and Puerto Rico, and additional locations in Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Sweden, Iceland, and New Zealand [4] Financial Overview - Total revenue for the fourth quarter was $86.156 billion, an increase from $79.697 billion the previous year. Membership fees also rose to $1.724 billion from $1.512 billion [9] - Operating income for the fourth quarter was $3.341 billion, compared to $3.042 billion last year, indicating improved operational efficiency [9]

Market Overview - The U.S. stock market is experiencing a notable pullback, with major indexes extending losses for a third consecutive session, driven by profit-taking and concerns over equity valuations [1][2] - Afternoon trading reflects a cautious mood as market participants digest economic data and corporate news [1] Market Indexes Performance - The Dow Jones Industrial Average (DJIA) was down approximately 0.2%, or 76 points, closing at 46,121.28 [2] - The S&P 500 (SPX) slipped between 0.4% and 0.7%, heading towards its longest slide in over a month, after falling to 6,637.97 [2] - The Nasdaq Composite (IXIC) traded 0.3% to 0.7% lower, following a dip to 22,497.86 [2] Sector Performance - Mixed performance across sectors, with profit-taking evident in the technology segment; seven out of 11 sectors in the S&P 500 ended in negative territory [3] - The Energy Select Sector SPDR (XLE) advanced 1.3%, while the Materials Select Sector SPDR (XLB) and Real Estate Select Sector SPDR (XLRE) saw declines of 1.2% and 1%, respectively [3] Copper Market Impact - A surge in copper prices is noted after Freeport-McMoRan declared force majeure on supplies from its Grasberg mine due to a fatal mudslide, causing copper prices to rise by 1.1% [4] - Shares of copper producers like Anglo-American and Glencore saw gains due to this supply disruption [4] Homebuilders Performance - Homebuilders like Lennar (LEN) and D.R. Horton (DHI) are experiencing gains, attributed to a 20.5% surge in U.S. sales of new homes in August 2025, reaching an annual rate of 800,000 units [5] Upcoming Economic Data - Key U.S. inflation data (PCE) is anticipated, which could significantly influence market direction [6] - Weekly jobless claims data and the latest GDP estimate are also set to be released, providing insights into the labor market and economic health [6] Federal Reserve Commentary - Federal Reserve Chair Jerome Powell's remarks on equity prices being "fairly highly valued" and a measured approach to interest rate cuts continue to weigh on investor sentiment [7] - Stronger-than-expected economic reports may reduce the urgency for aggressive rate reductions [7] Corporate Earnings Reports - Notable companies like Costco Wholesale (COST), Accenture (ACN), and CarMax (KMX) are scheduled to report fiscal fourth-quarter results, which will be closely watched for insights into consumer spending [8][9] Individual Stock Movements - Technology stocks, particularly in the AI space, are facing profit-taking; Nvidia (NVDA) shares fell 0.8% and Oracle (ORCL) fell 1.7% due to valuation concerns [10] - Intel (INTC) shares rose over 5% on news of seeking investment from Apple, while IBM (IBM) rose more than 5% following positive trial results using its quantum computing technology [11] - Starbucks (SBUX) shares slipped almost 1% due to layoffs and store closures, while CarMax (KMX) tumbled 19.8% after reporting weaker-than-expected profits [12] - Lithium Americas (LAC) soared 95.8% on reports of potential U.S. government investment in its lithium project [13] Market Environment - The market is navigating a complex environment characterized by a resilient economy, cautious Federal Reserve, and re-evaluation of high-growth stock valuations [14]

Market Overview - U.S. stock markets are experiencing a pullback, with major indexes declining for three consecutive sessions after reaching record highs earlier in the week, indicating a pause for investors to digest economic data and corporate news [1][10] - The S&P 500 is down approximately 0.6%, the Nasdaq Composite has fallen 0.9%, and the Dow Jones Industrial Average shows a modest decline of 0.1%, yet all indexes remain near all-time highs [2] Economic Indicators - The final revision to second-quarter GDP shows an annual growth rate of 3.8%, revised up from 3.3% [3] - Weekly jobless claims fell to a two-month low of 218,000, indicating a resilient labor market [3] - Core capital goods new orders rose by 0.6% month-over-month, exceeding expectations [3] - The 10-year Treasury yield increased to 4.18%, up from 4.15%, which may negatively impact stock prices due to rising borrowing costs [3] Upcoming Economic Data - Investors are awaiting the release of the August Personal Consumption Expenditures (PCE) index, which is crucial for shaping expectations regarding the Federal Reserve's monetary policy [4] Earnings Reports - CarMax (KMX) shares fell nearly 12% after missing second-quarter profit targets, while THOR Industries Inc. (THO) surged 6.1% after exceeding earnings estimates [5] - Other companies reporting earnings include Accenture plc (ACN), Jabil Inc. (JBL), Synnex Corp. (SNX), BlackBerry Limited (BB), and LuxExperience B.V. (LUXE) [5] Notable Stock Movements - Intel (INTC) shares surged nearly 7% following reports of discussions with Apple (AAPL) regarding potential collaboration [6] - IBM (IBM) rose over 5% due to positive news related to quantum computing [7] - Tesla (TSLA) shares declined by 3.5%, while Oracle (ORCL) fell 4.7% for the third consecutive day [7] - Amazon (AMZN) shares decreased after agreeing to a $2.5 billion settlement over deceptive subscription practices [8] - Birkenstock (BIRK) shares jumped close to 5% after pre-announcing strong results, while Freeport-McMoRan (FCX) sank 11.6% due to lower sales forecasts [9] Market Sentiment - The overall market sentiment is cautious as investors weigh strong economic data against potential implications for monetary policy, leading to a rotation out of high-flying tech stocks [10]

Economic Data Summary - Q2 GDP was revised up from +3.3% to +3.8%, marking the strongest quarter of growth since Q3 2023 [2] - Consumption increased significantly from +1.6% to +2.5%, indicating a stronger appetite among U.S. consumers [3] - The Price Index rose by 10 basis points, with headline inflation at +2.1% and core inflation at +2.6% [3] Job Market Insights - Initial Jobless Claims fell to 218K, down 17K from estimates and 64K lower than two weeks ago, reaching the lowest level since mid-summer [4] - Continuing Claims rose slightly to 1.926 million, remaining below 1.94 million for the third consecutive week [5] Manufacturing and Trade Data - August Durable Goods Orders increased by +2.9%, significantly better than the prior month's -2.7% and the consensus estimate of -0.5% [6] - The Advanced U.S. Trade Balance for August showed an improvement to -$85.5 billion from -$102.8 billion [7] - Advanced Retail Inventories remained unchanged, while Advanced Wholesale Inventories decreased to -0.2% [7] Market Expectations - Existing Home Sales for August are forecasted at 3.96 million, a decrease from July's 4.01 million [8] - Costco is expected to report fiscal Q4 results with a projected earnings growth of +12.8% year over year and +8.1% revenue growth [9]

Core Viewpoint - Costco is expected to report strong earnings, positioning itself as a leading retailer globally due to its diverse business model and growth opportunities, particularly in store expansion [2][3]. Company Performance - Costco is anticipated to have exceptional growth, with the potential to expand its store count by 30 to 40% globally [2]. - Each Costco store is equivalent to 30 Albertson's stores, indicating its competitive advantage as rivals face closures [3]. - The company is outperforming competitors like Walmart and Sam's Club in various operational metrics, including better service and inventory management [3]. Market Positioning - Costco is benefiting from a value-driven consumer base, with a notable shift towards private label brands, particularly its Kirkland brand, which is recognized for quality and value [4][5]. - The company has stringent procurement practices, ensuring that vendors cannot unjustifiably raise prices, which enhances customer value [5][6]. Expansion Strategy - Costco is expected to announce expansion plans in regions such as the People's Republic of China, Asia-Pacific, and Central United States, capitalizing on opportunities in markets with less competition [7][8]. - The company is likely to convert vacant retail spaces from bankrupt stores into high-volume Costco locations, further solidifying its market presence [8]. Financial Outlook - Costco's stock is currently trading between $145 and $150, with a target price projected to increase by 20 to 24% within a year, indicating strong growth potential despite broader retail challenges [9]. - The company is managing tariff impacts by passing costs onto vendors rather than consumers, which may affect margins but helps maintain competitive pricing [9][16].

Economic Data Summary - Q2 GDP was revised up from +3.3% to +3.8%, marking the strongest quarter of growth since Q3 2023 [2] - Consumption saw a significant increase from +1.6% to +2.5%, indicating a stronger appetite among U.S. consumers [3] - The Price Index increased by 10 basis points, with headline at +2.1% and core at +2.6% [3] Job Market Insights - Initial Jobless Claims fell to 218K, down 17K from estimates and 14K from the previous week, reaching the lowest level since mid-summer [4] - Continuing Claims rose slightly to 1.926 million, remaining below 1.94 million for the third consecutive week [5] Durable Goods Orders - August Durable Goods Orders increased by +2.9%, significantly better than the prior month's -2.7% and the consensus estimate of -0.5% [6] - Excluding Transportation orders, the increase was +0.4%, down from +1.0% in the previous month [6] Trade and Inventory Data - The Advanced U.S. Trade Balance for August improved to -$85.5 billion from -$102.8 billion [7] - Advanced Retail Inventories remained unchanged at +0.2%, while Advanced Wholesale Inventories decreased to -0.2% [7] Company Performance Expectations - Costco is expected to report fiscal Q4 results with a projected earnings growth of +12.8% year over year and revenue growth of +8.1% [10] - Costco has outperformed earnings expectations in three of its past four quarters [10]

Corporate Earnings Overview - Corporate earnings are a primary driver of stock market returns, with the current bull market supported by a resilient corporate backdrop, particularly in the tech sector due to an investment boom in artificial intelligence [1][2] - Total earnings growth in Q2 was 12.5% year-over-year, with revenues up 6.2%, both exceeding estimates, indicating strong corporate performance despite concerns like tariffs [3][4] - S&P 500 earnings for Q3 are expected to rise by 5.1% year-over-year, with a 6% increase in revenues, although this reflects a deceleration compared to Q3 2024 [5] Earnings Revisions and Outlook - The trend of earnings estimate revisions for Q3 has been mainly positive since April-May, with increases noted in sectors like technology and financials, which is seen as a bullish sign [7] - Annual S&P 500 earnings are projected to increase by 9.3% in 2025, supported by a 4.1% rise in revenues, with expectations for accelerated growth in the coming years [9][10] Company-Specific Insights - Jabil (JBL) reported fiscal Q4 earnings of $3.29 per share, surpassing estimates by 11.5%, with revenues of $8.25 billion, exceeding consensus by 7.67% [13][14] - Costco (COST) is expected to report fiscal Q4 earnings of $5.81 per share, reflecting a 12.8% growth year-over-year, with revenues projected at $86.23 billion [16][20] - Costco's performance will provide insights into membership trends and consumer behavior, particularly in a value-focused retail environment [17][20]

Core Viewpoint - Costco's same-store sales growth in the US is projected at approximately 6%, with global sales at about 6.5%, indicating strong performance but not sufficient for the company's elevated valuation [1][2] Sales Performance - There is a deceleration in sales growth from 8% last quarter, attributed to a mini investment cycle within Costco and elevated operating expenses, which were in double digits last quarter [2] - The grocery business remains strong, accounting for over 60% of domestic sales, with mid-single-digit growth, while non-food sales need to accelerate to support overall performance [7][8] Membership Insights - Costco's membership renewal rate is around 90%, indicating strong customer loyalty, but there is a need for more growth in membership income, which is expected to see low double-digit increases this quarter [4][5] - The introduction of younger consumers through digital channels has led to some churn in membership numbers, which is being monitored [5][6] Competitive Landscape - Walmart is highlighted as a top pick in the e-commerce space, outperforming Costco and the S&P with a year-to-date increase of 14% compared to Costco's 3% [9][10] - Walmart's growth is supported by its digital business and alternative revenue streams, with significant potential for earnings per share growth in the coming years [10]

Core Viewpoint - Kodiak, an autonomous truck technology company, is set to begin trading on NASDAQ under the name Kodiak AI, highlighting the potential benefits of AI-powered trucking solutions [1]. Company Overview - Kodiak focuses on automating trucks using AI technology to address the driver shortage and challenges faced by human drivers in the trucking industry [2]. - The company has initiated its first commercial deployment in West Texas with eight fully driverless trucks operating daily [3]. Technology and Operations - The trucks are designed to operate in a remote area with moderate traffic, allowing them to navigate various road conditions while adhering to traffic rules [4][5]. - Safety is a priority, with the trucks programmed to drive conservatively, maintain speed limits, and avoid risky maneuvers [7][8]. - Kodiak's trucks have logged 3,000 hours of operation without any at-fault accidents, although they have experienced minor incidents where other vehicles hit them [8][9]. Monitoring and Safety Measures - The trucks are equipped with real-time monitoring systems that detect collisions and allow for human intervention when necessary [10][12]. - Comprehensive data logging, including speed and location, enables the company to analyze incidents in detail [12]. Future Plans - Kodiak aims to gradually expand its operations from remote areas to urban and suburban locations over the coming years, with a focus on safety and efficiency [14]. - The company operates on a "driver as a service" model, where customers own the trucks and pay Kodiak a service fee for the technology and operation [15][16]. Financial Outlook - While Kodiak has not provided specific guidance on profitability, it has begun generating revenue from its driverless operations, a milestone not achieved by many competitors in the autonomous vehicle space [17].