Costco reported solid first quarter of fiscal 2025, with net sales of $62.151 billion and net income of $1.798 billion ($4.04 per diluted share), reflecting a 7.5% YoY topline increase and a 9.9% lift in net income ex discrete tax items. Total comparable sales rose 5.2% (7.1% adjusted for gas deflation and FX), with e-commerce comp up 13% (13.2% adjusted). Traffic growth remained robust at 5.1% worldwide (US 4.9%), while average ticket was essentially flat on a reported basis but up 2% excluding gas and FX effects. Membership metrics remained strong, with 77.4 million paid households and 36.4 million paid executive memberships, executives accounting for 46.8% of paid members and 73.1% of sales. The company continued to invest in capabilities and growth, opening seven warehouses in Q1 (six net), including four outside the US, and guiding toward approximately $5 billion of capital expenditures for the year and roughly 29 openings (26 net outside the US).
From a margin perspective, gross margin expanded 24 basis points YoY to 11.28%, driven by mix, Kirkland Signature improvements, and a favorable credit card co-brand program, while SG&A rose modestly as wage inflation took hold. Management highlighted ongoing price investments to defend value leadership, including notable Kirkland price reductions, and indicated ongoing investment in technology, payroll, and supply chain capabilities to support growth. The quarter benefited from a $100 million discrete tax item related to RSU vesting, which, when excluded, yields a tax rate around 26.5%. Cost control remained a focus as the company advances in its multi-year growth plan, including Costco Logistics and Costco Next, as well as early-stage retail media initiatives.
Looking ahead, COST emphasizes continued expansion (US and international), a continued emphasis on value via price leadership and Kirkland Signature, and monetization opportunities from digital channels (e-commerce, Costco Logistics, retail media). Management also noted macro headwinds such as gas price deflation and FX, potential port-related disruptions, and tariff uncertainty, which could influence quarterly results. Overall, the balance sheet remains strong with $10.9 billion of cash and equivalents, a net cash position of approximately $2.87 billion, and a solid free cash flow trajectory that supports ongoing expansion and shareholder returns.