Costco COST.BA delivered USD-denominated Q2 2025 results characterized by revenue that declined year-over-year but posted solid sequential improvements in profitability and strong cash generation. Revenue was USD 63.723 billion with gross profit of USD 9.614 billion, yielding a gross margin of 15.09%. Operating income reached USD 2.316 billion (operating margin 3.63%), while net income was USD 1.789 billion (net margin 2.81%). Quarter-over-quarter, revenue rose 2.53% and gross profit grew 19.55%, indicating gross margin expansion as cost controls and mix benefited profitability despite a challenging top-line trajectory versus the prior year.
The company remains financially robust with a strong balance sheet and ample liquidity. Cash and cash equivalents stood at USD 12.356 billion (plus USD 0.802 billion in short-term investments), and total debt was USD 8.039 billion, yielding a net debt position of negative USD 4.317 billion. Operating cash flow was USD 2.748 billion, with free cash flow of USD 1.611 billion. The balance sheet shows conservative leverage (debt to capital around 0.239) and a current ratio near 1.0, underscoring financial resilience and capacity for capital allocation via buybacks or strategic investments.
From an investor perspective, Costco’s performance reflects the durability of its membership model and disciplined cost management, even as the top-line trends dampen versus the prior-year period. The valuation remains elevated by mature market leadership, scale advantages, and strong cash generation, necessitating close attention to member growth, inflation dynamics, and currency risk in LATAM regions. Overall, the QQ2 2025 results support a cautiously constructive view on Costco’s ability to sustain profitability and liquidity while navigating a mixed macro backdrop.