Key Points Costco's membership model works well in any environment, even when there's inflation. Its stock trades at a premium valuation, and any negative sentiment could send it down. Costco's been resonating with a digital-first crowd, resulting in increased online signups. 10 stocks we like better than Costco Wholesale › Costco Wholesale (NASDAQ: COST) has been one of those stalwart stocks you can rely on to beat the market for decades. It has handily outperformed the S&P 500 over most time per ...

Core Insights - Costco Wholesale Corporation reported fourth-quarter fiscal 2025 results with revenues slightly below estimates but earnings exceeding expectations, driven by membership growth, increased traffic, e-commerce gains, and margin expansion [1][2][3] Financial Performance - Quarterly earnings were $5.87 per share, surpassing the Zacks Consensus Estimate of $5.81, and up from $5.15 in the prior year [2] - Total revenues reached $86,156 million, an 8.1% increase year over year, but fell short of the Zacks Consensus Estimate of $86,179 million [3] - Comparable sales rose 5.7% year over year, with U.S. comparable sales growing 5.1% and international markets seeing increases of 6.3% and 8.6% [3][6] Membership and Traffic Growth - Membership fees increased by 14% to $1,724 million, with total paid members reaching 81 million, a 6.3% increase from the previous year [5] - The membership renewal rate was 92.3% in the U.S. and Canada, and 89.8% worldwide [4][8] E-commerce and Margin Expansion - E-commerce comparable sales grew 13.6% year over year, with gross margin expanding by 13 basis points to 11.1% [7] - Operating income increased by 9.8% to $3,341 million, with operating margin improving by 10 basis points to 3.9% [7] Store Operations and Expansion Plans - Costco operates 914 warehouses globally, with plans to open 35 new warehouses in fiscal 2026 [8][9] - The company added 24 net new warehouses in fiscal 2025, including various international locations [9] Financial Health - As of the end of the quarter, Costco had cash and cash equivalents of $14,161 million and long-term debt of $5,713 million [10] - Capital expenditures for the quarter were approximately $1.97 billion, totaling just under $5.5 billion for the year [10]

Financial Data and Key Metrics Changes - Net sales for Q4 fiscal year 2025 reached $84.43 billion, an increase of 8% from $78.18 billion in the same quarter last year [12] - Net income for Q4 was $2.61 billion, or $5.87 per diluted share, up 11% from $2.35 billion, or $5.29 per diluted share in the previous year [12] - Membership fee income increased to $1.72 billion, a growth of 14% year over year [14] Business Line Data and Key Metrics Changes - E-commerce sales exceeded $19.6 billion, increasing over 15% [7] - Comparable sales were up 5.7%, or 6.4% adjusted for gas deflation and foreign exchange [12] - Gross margin for Q4 was reported at 11.13%, up 13 basis points year over year [17] Market Data and Key Metrics Changes - Traffic or shopping frequency increased by 3.7% worldwide [13] - The average transaction or ticket was up 1.9% worldwide, adjusted for gas deflation and FX [14] - The U.S. and Canada renewal rate was 92.3%, while the worldwide rate was 89.8% [15] Company Strategy and Development Direction - The company plans to open 35 new warehouses in fiscal year 2026, indicating continued expansion both domestically and internationally [5] - There is a focus on increasing Kirkland Signature product sourcing in the regions where items are sold to lower costs and reduce emissions [8] - The company aims to enhance member experience through improved checkout technology and digital enhancements [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growing market share despite macroeconomic uncertainties [11] - The company is optimistic about the membership base growth, particularly among younger members [40] - Management noted that the membership renewal rate is expected to decline slightly due to a higher number of online sign-ups [41] Other Important Information - Capital expenditure for Q4 was approximately $1.97 billion, with a total of under $5.5 billion for the full year [20] - The company celebrated milestones such as the 40th anniversary of its $1.50 hot dog and soda combo [7] - Inflation remained in the low to mid-single digit range, with specific commodities experiencing varying inflation rates [25] Q&A Session Summary Question: Awareness of extended member hours and potential comp lift - Management indicated that communication about extended hours has been effective, with a 1% comp lift observed [32][33] Question: Membership renewal rate expectations - Management acknowledged that the renewal rate may continue to decline due to a higher number of online sign-ups but remains optimistic about overall membership growth [38][40] Question: Core margins and price increases - Management reported a 29 basis point increase in core margins, with improvements across all main categories [45][47] Question: Sustainability of membership fee income growth - Management expressed confidence in continued growth opportunities for membership income, driven by new warehouse openings and younger member engagement [56][57] Question: E-commerce and grocery demand - Management noted strong growth in Instacart-driven traffic and emphasized the importance of fresh foods in meeting online grocery demand [66][68]

Financial Data and Key Metrics Changes - Net sales for Q4 2025 reached $84.43 billion, an increase of 8% from $78.18 billion in Q4 2024 [10] - Net income for Q4 was $2.61 billion, or $5.87 per diluted share, up 11% from $2.35 billion, or $5.29 per diluted share in the same quarter last year [10] - Membership fee income increased to $1.72 billion, a 14% year-over-year growth [11] Business Line Data and Key Metrics Changes - E-commerce sales exceeded $19.6 billion, increasing over 15% year-over-year [5] - Comparable sales were up 5.7%, or 6.4% adjusted for gas deflation and foreign exchange [10] - Fresh sales were up high single digits, with double-digit growth in meat [20] Market Data and Key Metrics Changes - Traffic or shopping frequency increased by 3.7% worldwide [11] - The average transaction or ticket was up 1.9% worldwide, adjusted for gas deflation and FX [11] - Gas volumes saw positive low single digits, but gas comps were negative mid-to-high single digits due to lower average prices [22] Company Strategy and Development Direction - The company plans to open 35 new warehouses in fiscal year 2026, indicating continued expansion opportunities [4] - There is a focus on moving more Kirkland Signature product sourcing closer to the markets where they are sold to lower costs and reduce emissions [6] - The company is enhancing member experience through improved checkout technology and digital enhancements [7][25] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the ability to grow market share despite macroeconomic uncertainties [9] - The company is focused on improving renewal rates for new online members through targeted digital communications [15][40] - Overall inflation remains in the low to mid-single digit range, with specific commodities experiencing varying inflation rates [22][75] Other Important Information - Capital expenditure in Q4 was approximately $1.97 billion, with a total of under $5.5 billion for the full year [18] - The company celebrated milestones such as the 40th anniversary of its hot dog and soda combo and the 30th anniversary of Kirkland Signature [5] - Digital e-commerce site traffic was up 27%, with strong sales in various categories [24] Q&A Session All Questions and Answers Question: Awareness of extended member hours and potential comp lift - Management communicated effectively about the extended hours, resulting in a 1% comp lift, with expectations for further growth as awareness increases [30][31] Question: Expected decline in membership renewal rates - Management anticipates a continued decline in renewal rates due to a higher number of online sign-ups, but overall membership engagement remains strong [34][39] Question: Insights on core margins and price increases - Core margins improved by 29 basis points year-over-year, with a focus on maintaining value while navigating tariffs [42][44] Question: Sustainability of warehouse growth pace - The company sees potential for continued growth in warehouse openings, with a focus on making informed decisions rather than hitting specific targets [68][70] Question: Impact of tariffs on gross margin - Management is closely monitoring the impact of tariffs and is prepared to adjust pricing strategies as necessary [80]

take us through as an analyst what you are looking for in those results after the closing bell today. Hey, good morning Tom Don. Thanks for having me on.So ju just given the monthly sales numbers that Costco reports, we already know that they're going to print uh about 6% same store sales in the US that excludes the more volatile gas category and then globally that's about 6 and a half%. So very good numbers. We just don't think this is enough for Costco.So a bit of a deceleration from the 8% last quarter. ...

Key Points Costco's core business remains strong, with steady comp growth and rising membership fee income. Membership metrics and e-commerce growth underscore the model's resilience. Valuation still prices in near-flawless execution, leaving little room for error at today's price. 10 stocks we like better than Costco Wholesale › After a monster run in recent years, Costco Wholesale (NASDAQ: COST) has lagged the broader market in 2025. As of the latest close, the stock is up roughly mid-single di ...

Core Viewpoint - Costco Wholesale Corporation is expected to report improved revenues and earnings for its fiscal third quarter, driven by an increase in comparable store sales and strong customer traffic [2][5]. Financial Performance Expectations - The Zacks Consensus Estimate for Costco's fiscal third-quarter revenues is $63.1 billion, reflecting a 7.9% year-over-year increase [5]. - The estimated earnings per share (EPS) for the fiscal third quarter is $4.25, indicating a 12.4% rise from the previous year [5]. - Comparable sales in the U.S. rose by 7.1% in April, surpassing estimates despite calendar-related issues [2]. Customer Traffic and Sales Growth - U.S. store traffic increased by 5%, while global traffic rose by 4.2%, with average transaction size growing by 2.4% year-over-year [3]. - E-commerce sales saw a significant growth of 13% in April compared to the same month last year [3]. Regional Performance Insights - Core sales in Canada and other international markets faced challenges due to price increases and macroeconomic pressures, but strong sales in the Southeast, Midwest, and Northeast U.S. regions helped offset these declines [4]. Membership Model and Customer Loyalty - Costco's membership model has proven successful, contributing to long-term growth prospects, with a current renewal rate of 93% [7][9]. - Recent increases in membership fees are expected to enhance profit margins and provide flexibility in managing costs [8]. Operational Efficiency - The company has improved its supply chain efficiency, increased item turnover, and simplified inventories, positioning itself as a top performer in the retail sector [10]. Trading Strategy Post-Earnings - The anticipated increase in comparable store sales suggests that upcoming quarterly results will be positive, likely leading to a rise in stock price [11]. - Technical indicators show Costco stock trading above both the short-term 50-day moving average and long-term 200-day moving average, indicating a bullish trend [12].

Costco Wholesale delivered solid earnings with increased revenue and strong e-commerce performance, though pressures from operating expenses remain.Costco Wholesale (COST -2.02%), the leading membership warehouse retailer, announced its second quarter fiscal 2025 results on March 6, 2025. Highlighting robust sales growth, it reported $62.53 billion in net sales, a 9.1% increase compared to the same quarter last year. Membership fees added an additional $1.193 billion, up 7.3%. Net income showed modest growt ...

Financial Data and Key Metrics Changes - The company reported fourth quarter net sales of $5.1 billion, an increase of 5.4% year over year on a comparable thirteen-week basis [27] - Merchandise comparable sales, excluding gas sales, increased by 4.6% year over year, driven by strong traffic [27] - Adjusted earnings per share for the quarter was $0.93, reflecting strong membership and traffic, merchandising improvements, and digital conveniences [31] Business Line Data and Key Metrics Changes - The perishables, grocery, and sundries division delivered over 4% comparable growth in the fourth quarter, with perishables leading the way [8] - General merchandise and services division comparable sales grew by more than 5% in the fourth quarter, with notable performance in consumer electronics and toys [10][11] - Digitally enabled comparable sales grew by 26% year over year, contributing significantly to overall growth [28] Market Data and Key Metrics Changes - Membership reached an all-time high of over 7.5 million members, with a renewal rate of 90% [7] - The company opened seven new clubs and 12 gas stations in fiscal 2024, marking entry into its 21st state [21] - The company expects to open 25 to 30 clubs across the next two fiscal years, indicating robust growth plans [21] Company Strategy and Development Direction - The company focuses on four strategic priorities: improving member loyalty, enhancing shopping experience, delivering value conveniently, and expanding footprint [12] - Investments in digital conveniences and merchandising strategies are aimed at driving member engagement and loyalty [19][20] - The company is committed to maintaining a strong pricing position, offering up to 25% better pricing than grocery competitors [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties and consumer behavior changes, emphasizing the importance of delivering value [24] - The company anticipates comp sales growth excluding gas of 2% to 3.5% for fiscal 2025, aligning with long-term growth expectations [36] - Management highlighted the importance of maintaining strong member engagement and loyalty as key drivers for future growth [19] Other Important Information - The company reported a year-over-year decrease in merchandise gross margins by approximately 10 basis points, attributed to rising costs in key products [30] - Capital expenditures for fiscal 2024 were approximately $588 million, supporting the growing real estate pipeline [33] - The company ended the fourth quarter with the lowest levels of debt since its IPO, indicating a strong balance sheet [33] Q&A Session Summary Question: Can you provide more color around the cadence of the comp throughout the fourth quarter and the outlook for 2025? - Management noted strong performance throughout the fourth quarter, with November and December being particularly good months, and January being the strongest [46] - Traffic momentum has continued into Q1, although there is increased sensitivity to discretionary purchasing due to economic uncertainty [47] Question: Can you remind us how you managed tariff risks in the past and your current thoughts on it? - Management acknowledged that tariffs could raise prices and disrupt supply chains but emphasized that periods of rising prices often benefit the company as consumers seek value [55] Question: What is driving the strength of the digital business? - The digital business is driven by convenience, with services like BOPIC, curbside pickup, and same-day delivery contributing to increased member spending [56] Question: Can you provide insights on the exposure to China and Mexico? - The company has limited exposure to China, with only a few percent of its business imported directly, while exposure to Canada and Mexico is greater but not negatively impactful [66] Question: How is the performance of new clubs and the confidence in accelerating growth? - Management expressed strong satisfaction with the performance of new clubs, which are exceeding plans on both top and bottom lines, and highlighted a robust pipeline for future openings [70]