Costco Wholesale Corporation (COST.BA) delivered a solid QQ1 2025 performance characterized by revenue of $62.151 billion, a gross profit of $8.042 billion and net income of $1.798 billion. The period highlighted a stable gross margin of 12.93% and an operating margin of 3.53%, with annualized earnings per share around $4.05 (basic) and $4.04 (diluted) driven by disciplined cost controls and an efficient membership model. Cash flow remains a standout, with $3.26 billion in operating cash flow and $1.996 billion of free cash flow, supported by a robust liquidity position (cash and cash equivalents of $10.907 billion) and a net cash position (net debt of -$2.874 billion).
Costco’s balance sheet reflects a conservative capital structure: total assets of $73.386 billion versus total liabilities of $48.935 billion and total stockholders’ equity of $24.451 billion, with a debt load of $8.033 billion and a debt-to-capitalization ratio of 24.7%. The company exhibits efficient working capital dynamics (CCC of 2.94 days, DSO of 4.29 days, DIO 34.89 days, DPO 36.25 days) and a strong cash conversion profile, underpinning a durable capital allocation framework that historically favors repurchases and dividends alongside strategic investments.
Looking ahead, management commentary (as far as the provided data allows) points to continued membership-driven growth, ongoing investments in e-commerce and private labels, and disciplined expense management. However, investors should monitor macro volatility in key markets, FX translation effects, and competitive dynamics in the global discount retail space. Overall, the QQ1 2025 results reinforce Costco’s resilient business model and its capacity to generate steady cash flow even amid macro headwinds.