“Tomorrow, we will open up in Brentwood, California, followed by an opening in Highlands, California the following day, and four additional US openings next week, including our Sharon, Massachusetts opening on March 12th, which will be our 620th US warehouse and the 900th Costco location worldwide. We’re projecting 28 new openings during fiscal year 2025, of which three will be relocations, for 25 net new buildings.”
— Ron Vachris
03Detailed Report
COST
Company COST
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 27, 2026
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Executive Summary
Costco delivered a solid QQ2 2025 with robust top-line growth and continued member strength, supported by a growing e-commerce and ancillary revenue base. Net sales reached $63.7 billion, up 9.1% year over year, driven by US comp sales up 8.3% (9.1% adjusted for gas deflation and FX) and strong international performance, notably Canada and select markets. E-commerce comp sales rose 20.9% (22.2% adjusted for FX), underscoring Costco’s growing online penetration and multi-channel capabilities. Total company gross margin expanded modestly to 10.85% (up 5 bps YoY, 4 bps ex gas deflation), while SG&A benefited from productivity gains and cost discipline, yielding SG&A as a share of revenue of 9.06% (down 8 bps YoY). Operating income rose 12.3% to $2.316 billion, with net income at $1.789 billion and diluted EPS of $4.02, representing a low-to-mid single-digit YoY growth excluding a prior-year discrete tax benefit. The company reaffirmed its long-run growth thesis: ongoing US and international footprint expansion (targeting ~25 net new warehouses in FY2025), stronger private-label penetration, digital enhancements (personalization and MVM optimization), and an expanding retail-media/alternative revenue framework to support member value. Management signaled FX headwinds and tariff uncertainty as key external risks, while maintaining a focus on value leadership—pricing actions to lower prices where opportunities exist and absorbing cost increases when feasible. The balance sheet remains strong with substantial liquidity, modest leverage, and ample free cash flow generation, supporting ongoing capex and shareholder returns aligned with Costco’s disciplined capital allocation framework.
Key Performance Indicators
Revenue
Increasing
63.72B
QoQ: 2.53% | YoY: 9.04%
Gross Profit
Increasing
9.61B
15.09% margin
QoQ: 19.55% | YoY: 31.66%
Operating Income
Increasing
2.32B
QoQ: 5.46% | YoY: 12.32%
Net Income
Increasing
1.79B
QoQ: -0.56% | YoY: 2.58%
EPS
Increasing
4.03
QoQ: -0.49% | YoY: 2.54%
Revenue Trend
Margin Analysis
Financial Highlights
Performance highlights and metric deltas (YoY and QoQ where available):
- Revenue: $63.723B, up 9.1% YoY; 2Q22 QoQ growth not provided.
- Gross Profit: $9.614B; gross margin 10.87% (0.05% YoY improvement; 4 bps ex gas deflation).
- Operating Income: $2.316B; operating margin 3.63% (YoY +12.3% in absolute terms; margin modestly higher).
- Net Income: $1.789B; net margin 2.80% (YoY +2.58%; QoQ -0.56% influenced by FX and discrete items).
- EPS (Diluted): $4.02; EPS YoY growth ~2.5% (adjusted for a $0.21 per-diluted-share tax benefit in the prior year).
- Membership Fee Income: $1.193B, up 7.4% YoY; renewal rate US/Canada 93%, worldwide 90.5%. Membership base: 78.4M paid households (+6.8% YoY); cardholders 140.6M (+6.6% YoY); Executive Members 36.9M (+9.1% YoY; 47.1% of paid members and 73.8% of worldwide sales).
- Cash Flow: Operating cash flow $2.748B; capex $1.137B; free cash flow $1.611B; net debt position remained negative (net cash) at approximately -$4.317B; cash at period-end $12.356B.
- Balance Sheet: total assets $73.224B; total liabilities $47.647B; total stockholders’ equity $25.578B; liquidity metrics strong with cash and equivalents and short-term investments supportive of CapEx plans.
- Key ratios: current ratio ~0.997; quick ratio ~0.490; cash ratio ~0.334; debt-to-assets ~11.0%; debt-to-equity ~0.314; long-term debt to capitalization ~18.4%; cash flow coverage and capital expenditure coverage metrics indicate solid liquidity and capacity for ongoing investments.
- Incremental context: E-commerce penetration up 20.9% during Q2 (22.2% adjusted for FX); freight and logistics initiatives (Costco Logistics, Costco Next) delivered record activity; gas deflation and FX contributed to some negative comp effects but were offset by robust member value actions and private-label initiatives.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
63.72B
9.04%
2.53%
Gross Profit
9.61B
31.66%
19.55%
Operating Income
2.32B
12.32%
5.46%
Net Income
1.79B
2.58%
-0.56%
EPS
4.03
2.54%
-0.49%
Key Financial Ratios
Gross Profit Margin
Weak
15.10%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Weak
3.63%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
2.81%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
2.44%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
6.99%
Return on equity is acceptable but below top-tier companies
Current Ratio
Concern
1.00
Current ratio below safe levels, potential liquidity risk
Debt to Equity
Moderate
0.31
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
High Growth
66.54x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
18.61x
Very high premium suggests asset-light business model or lofty expectations
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