Costco Earnings Q2'25: Strong Growth in Sales & Membership Expansion
- Hardik Shah
- Mar 6
- 2 min read
TL;DR
Robust Sales Growth: Net sales rose 9.1% to $62.53 billion, with e-commerce sales up 20.9%.
Profitability & Membership Strength: Net income increased to $1.79 billion, and membership revenue grew 7.4%.
Expansion & Strategic Investments: Costco plans 28 new store openings and continues investments in digital, logistics, and private label products.
Financial Results
Costco operates a membership-based retail model with 897 warehouses worldwide, primarily in the U.S., Canada, and key international markets. The company’s core revenue streams include merchandise sales and membership fees.
Costco Earnings:
Revenue: $62.53 billion (+9.1% YoY)
Net Income: $1.79 billion ($4.02 per diluted share)
Comparable Sales Growth:
U.S.: +8.3% (8.6% adjusted)
Canada: +4.6% (10.5% adjusted)
E-commerce: +20.9% (22.2% adjusted)
Membership Fee Revenue: $1.19 billion (+7.4% YoY)
"We continue to see strong demand from our members, with e-commerce and international markets driving growth. Our disciplined approach to pricing and supply chain investments keeps Costco a leader in value for customers." — Gary Millerchip, CFO
Guidance & Outlook
Costco expects 28 new warehouse openings (25 net new locations) in FY 2025.
Expansion in logistics and digital is expected to drive future growth.
Management remains cautious about foreign exchange impacts and tariff-related cost pressures.
Operational Performance
Industry & Market Trends
Consumer demand for value-based retail shopping remains high.
Inflation and tariffs present cost challenges, but Costco is mitigating these through supplier negotiations and efficiency measures.
Key Business Milestones
Store Growth: Costco will open its 900th warehouse in March.
Employee Investment: Wage increases of $1/hour for top-tier employees, bringing minimum wage to $20/hour.
Private Label Strength: Kirkland Signature continues to grow faster than the company’s overall sales, with new product launches in food, home goods, and non-food categories.
Challenges & Risks
Foreign Exchange Headwinds: Impacted net income by $57 million.
Supply Chain Costs: Investments in inventory and logistics increased expenses.
Tariff Uncertainty: Potential cost increases from international trade dynamics.
Strategic Initiatives
E-commerce Growth: Digital sales surged 20.9%, with Costco Logistics hitting record holiday deliveries.
Retail Media Expansion: New targeted promotions and supplier partnerships are expected to enhance marketing efficiency.
Membership & Services: Executive memberships now account for 47.1% of paid members and 73.8% of sales, boosting long-term retention.
Capital Allocation
Dividends: Costco continues consistent dividend payouts, supported by strong cash flow.
Share Buybacks: Repurchased $412 million in shares in Q2.
Debt & Liquidity: Costco maintains $12.36 billion in cash and equivalents, ensuring financial flexibility.
The Bottom Line
Costco’s Q2 2025 performance underscores its resilience in retail, with strong sales growth, rising membership revenue, and disciplined cost management. Despite foreign exchange headwinds and inflationary pressures, the company remains committed to expansion, digital transformation, and maintaining its position as a value leader for consumers.
--
Comments