Costco Wholesale Corp (NASDAQ: COST) reported better-than-expected financial results for the fourth quarter of fiscal 2025.Costco reported fourth-quarter revenue of $86.16 billion, beating analyst estimates of $86.12 billion, according to Benzinga Pro. The company reported fourth-quarter adjusted earnings of $5.87 per share, beating estimates of $5.80 per share.Membership fees came in at approximately $1.72 billion, up from $1.51 billion in the prior year's quarter. Costco increased its annual membership fe ...

Core Insights - Costco is expanding its product offerings beyond traditional supermarket staples, increasingly focusing on "big and bulky" items such as furniture and saunas, which has contributed to its sales growth [2][3][12] E-commerce Growth - E-commerce sales reached nearly $20 billion in the most recent fiscal year, marking an increase of over 15%, and now account for more than 7% of Costco's annual net sales [6] - The majority of big and bulky sales are conducted online, indicating significant growth potential in this segment [5][8] Strategic Shift - Costco's shift towards larger, higher-margin items is a strategic response to market conditions, aiming to shield itself from volatility in lower-margin categories [14] - The company is targeting a more affluent customer base, appealing to consumers who appreciate value without necessarily needing to save money [15] Market Positioning - The introduction of larger items in stores is seen as an opportunity to attract new customers who may not have previously considered Costco for home furnishings or high-end products [9][12] - Costco's evolving brand perception is supported by a high percentage of visitor loyalty and an adaptable merchandising model [12] Seasonal Strategy - The upcoming holiday season will see Costco stocking categories that have not been traditionally offered, such as backyard sheds and saunas, reflecting the success of the big and bulky item trend [18][19] Competitive Landscape - Costco's expansion into larger items is prompting competition among major retailers like Amazon and Walmart, as they also seek to capture the big and bulky market [17]

Core Insights - Costco Wholesale reported net sales of $84.43 billion for the fourth quarter of fiscal year 2025, an 8% increase from $78.18 billion in the same quarter of the previous year [1] - The company's net income for the quarter reached $2.61 billion, or $5.87 per diluted share, compared to $2.35 billion, or $5.29 per diluted share, in the fourth quarter of 2024 [1] - For the entire fiscal year, net sales increased by 8.1% to $269.9 billion, up from $249.6 billion the previous year [3] Financial Performance - Operating income for Q4 rose to $3.34 billion from $3.04 billion in the same period last year [1] - The net income for the fiscal year stood at $8.09 billion, or $18.21 per diluted share, compared to $7.36 billion, or $16.56 per diluted share, a year earlier [3] - Operating income for the fiscal year increased to $10.38 billion from $9.28 billion [3] Sales Growth - Same-store sales increased by 6.4% when adjusting for gas prices and foreign exchange fluctuations [2] - In the US, same-store sales rose by 6%, while Canada experienced an 8.3% increase, and other international markets reported a 7.2% increase [2] - E-commerce sales for Q4 grew by 13.5% compared to the same period in 2024, and for the full year, e-commerce sales surged by 16.1% [2][3] Global Operations - Costco operates 914 warehouses globally, with 629 located in the US and Puerto Rico, 110 in Canada, and a presence in several other countries including Mexico, Japan, the UK, and Australia [4] - The company maintains e-commerce platforms in multiple regions, including the US, Canada, and the UK [4]

Five things to know ahead of today's opening bell. President Trump threatening the pharmaceutical industry with 100% tariffs unless drug companies manufacture or at least start to build manufacturing plants in the United States. The president also saying that he plans to slap a 25% tariff on imported heavy trucks starting October 1st.Separately, President Trump said yesterday he hopes to take some of the money raised by his tariffs and give it to US farmers. Retaliation to President Trump's tariffs have red ...

Kwangmoozaa/iStock via Getty Images Listen below or on the go on Apple Podcasts and Spotify Trump slaps 100% tariffs on drugs, 25% on heavy trucks and more. (00:28) Federal agencies told to prepare for mass firings if government shuts down. (01:21) Upward pressure on Fed's preferred inflation gauge — PCE price index — is seen persisting in August. (03:05) This is an abridged transcript. President Trump announced sweeping new tariffs, including 100% on branded and patented pharmaceutical drugs, to tak ...

Core Insights - Costco Wholesale reported its fourth quarter and fiscal year 2025 earnings, highlighting new global locations, digital upgrades, and expanded hours for executive members [1][8] - The company has seen a 1% increase in weekly US sales due to the new exclusive morning hours for executive members and additional Saturday evening hours for all US members [2] Expansion and Membership - In the fourth quarter, Costco opened 10 new warehouses, including locations in Canada, Korea, Sweden, and five in the US, bringing the total to 914 warehouses globally [3] - The company plans to open another 35 warehouses in fiscal year 2026, indicating ongoing expansion opportunities both domestically and internationally [4] Membership Growth and Sales Performance - Costco's paid membership increased to 81 million, a 6.3% rise from the previous year, with renewal rates at 92.3% in the US and Canada and 89.8% worldwide [6] - Quarterly net sales rose 8% to $84.4 billion, up from $78.2 billion a year ago, while fiscal year net sales climbed 8.1% to $269.9 billion compared to $249.6 billion last year [7]

Market Overview - The stock market experienced a downturn, with the S&P 500 and Nasdaq closing lower, and the Dow Jones declining over 170 points [1] - Major U.S. indices saw the Dow Jones Industrial Average down nearly 0.4% to 45,947.32, the S&P 500 off 0.5% to 6,604.72, and the Nasdaq lower by 0.5% at 22,384.69 [1] Costco Wholesale Corporation - Costco reported better-than-expected fourth-quarter results, with revenue rising 8% year-over-year to $86.16 billion and adjusted earnings at $5.87 per share [2] - Comparable sales increased by 5.7%, and membership fee revenue rose to $1.72 billion following the first fee hike since 2017 [2] - Costco shares dipped 0.88% to $935.04 in after-hours trading [2] Oracle Corporation - Oracle's stock fell by 5.55% to close at $291.33, with a high of $298.75 and a low of $288.55 [3] - The stock rose 0.44% to $292.60 in after-hours trading [3] - An executive order by President Trump approved a $14 billion deal for Oracle to manage TikTok's U.S. security operations and provide cloud services [4] International Business Machines Corporation (IBM) - IBM shares surged 5.20% to $281.44, with an intraday peak at $284.23 and a low of $271.15 [5] - The rise followed IBM's announcement of a quantum computing breakthrough in collaboration with HSBC, enhancing bond trading predictions [5] CarMax Inc - CarMax shares plummeted 20.07% to $45.60, marking a new 52-week low [6] - The decline followed disappointing second-quarter results, with EPS falling to $0.64 versus expectations of $1.09, and sales dropping 6% year-over-year to $6.59 billion [6] BlackBerry Limited - BlackBerry's stock rose 8.90% to $4.65, reaching a high of $4.66 and a low of $4.19 [7] - The company reported strong second-quarter results, with earnings of $0.04 per share, surpassing the consensus estimate of $0.01, and revenue rose 3% year-over-year to $129.6 million [8]

Group 1 - Costco reported total revenue of $86.16 billion for Q4 FY2025, an increase of 8.1% year-over-year, slightly above analyst expectations of $86.03 billion [1] - Diluted earnings per share (EPS) reached $5.87, a nearly 11% increase year-over-year, exceeding analyst expectations of $5.80 [1] - Same-store sales growth, excluding gasoline and foreign exchange fluctuations, was 6.4%, higher than the expected 6.21% [1] Group 2 - Membership fees increased by 14% year-over-year [1] - E-commerce sales, excluding gasoline and foreign exchange fluctuations, grew by 13.5%, continuing to show double-digit growth [1] - Comparable sales in the U.S. increased by 5.1% in Q4, with a full-year growth of 6.2% [1] Group 3 - Comparable sales in Canada grew by 6.3% in Q4, with a full-year growth of 5.0% [1] - Other international markets saw a 8.6% increase in comparable sales for Q4, with a full-year growth of 4.8% [1] - E-commerce channel sales grew by 13.6% in Q4, with a full-year growth of 15.6% [1]

Market Performance - The blue-chip Dow index closed down 173 points, a decrease of 0.38% for the day [2] - The S&P 500 fell by 33 points, or 0.50%, while the Nasdaq also dropped by 0.50%, losing 113 points [2] - The small-cap Russell 2000 decreased by 25 points, representing a decline of 1.05% [2] - Bond yields are rising, with the 10-year yield at 4.17% and the 2-year yield at 3.66% [2] Economic Indicators - Existing Home Sales surged by 20.5% in August, totaling 4.00 million seasonally adjusted annualized units, slightly below expectations of 4.01 million but above the consensus estimate of 3.96 million [3] - The Midwest region experienced the largest gains in home sales, although the median home price there is 22% lower than the national median [3] Company Earnings - Costco reported fiscal Q4 earnings of $5.87 per share, exceeding the Zacks consensus of $5.81, but revenues were slightly below expectations at $86.16 billion compared to the anticipated $86.18 billion [4] - This marks the third earnings beat for Costco in the last four quarters, yet shares are down slightly in late trading, with a year-to-date increase of around 3% [4] Upcoming Economic Data - The Personal Consumption Expenditures (PCE) report is anticipated to impact the stock market, with the August data set to be released before the market opens on Friday [5] - Personal Income is expected to cool to 0.3% in August from 0.4% the previous month, while Personal Spending is projected to remain steady at 0.5% [6] - The PCE Index is forecasted to increase by 0.3% month over month for the headline and 0.2% for the core, with year-over-year PCE expected to rise by 10 basis points to 2.7% [6][7]

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]