“There's nothing about anything that we see within how the business is performing that's changing our view on that.”
— Gary Millerchip
03Detailed Report
COST
Company COST
Period
Q3 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 27, 2026
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Executive Summary
Costco delivered a solid Q3 2024 operating performance amid a complex macro environment. Reported revenue was $58.52 billion with net income of $1.68 billion and diluted EPS of $3.78, reflecting a year-over-year comparison impacted by last year’s non-recurring merchandise charge related to charter shipping activities. The company posted a gross margin of 10.84% (up 52 bps YoY, and 54 bps excluding gas inflation) and an operating margin of 3.76%, driven by stronger core gross margins and ongoing efficiency in SG&A. Traffic rose 6.1% globally with average ticket up 0.5% and e-commerce comp growth of 20.7%, underscoring member engagement and successful digital initiatives. Membership metrics remained robust: 74.5 million paid households and 133.9 million cardholders, with renewal rates of 93% in the U.S./Canada and 90.5% worldwide. Executive memberships advanced to 34.5 million, now representing over 46% of paid members and 73.1% of worldwide sales. Management reaffirmed discipline around pricing and value delivery, including ongoing coverage of costs via price reductions where possible, continued expansion of infill warehouses (12 locations planned for the remainder of fiscal 2024, net 29), and a 4.3–4.5 billion full-year capex outlook. The quarterly call stressed opportunities in digital, logistics, and data-driven member engagement—areas highlighted for long-term value creation, including Costco Next (75 vendors by Q3) and expanded Uber Eats collaboration for Canada and select U.S. states. While near-term results reflect typical seasonality and FX headwinds, Costco’s cash generation and balance sheet remain strong, supporting a multi-year growth trajectory anchored by member value, selective capital deployment, and an expanding total addressable market in e-commerce and services.
Key Performance Indicators
Revenue
Decreasing
58.52B
QoQ: 0.12% | YoY: -25.87%
Gross Profit
Decreasing
7.34B
12.55% margin
QoQ: 0.55% | YoY: -24.47%
Operating Income
Decreasing
2.20B
QoQ: 6.55% | YoY: -21.00%
Net Income
Decreasing
1.68B
QoQ: -3.56% | YoY: -22.18%
EPS
Decreasing
3.79
QoQ: -3.56% | YoY: -22.18%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability
- Revenue (Q3 2024): $58.515B vs. prior-year period (YoY) decline reflected in reported YoY metric (-25.87% per earnings metrics, though press materials cited a YoY increase in net sales for the quarter in the call narrative). 12-week period with 16 weeks in Q4 guidance noted. QoQ growth: 0.12% per quarterly metrics.
- Gross profit: $7.342B; gross margin 10.84% (YoY margin up 52 bps; core margin flat to +2 bps excluding gas).
- Operating income: $2.197B; operating margin 3.75% (flat-to-modest improvement YoY excluding gas effects).
- Net income: $1.681B; net income margin 2.87%; EPS (diluted): $3.78.
- SG&A: $5.145B; SG&A ratio 8.96% (improved about 15 bps YoY); core SG&A benefited from higher labor productivity and cost discipline.
-Cash flow and balance sheet
- Net cash from operating activities: $2.999B; free cash flow: $1.937B.
- Capex: $1.062B in Q3; full-year 2024 capex guidance reaffirmed at $4.3–$4.5B.
- Balance sheet: cash and equivalents $10.404B; total current assets $33.288B; total assets $67.911B; total liabilities $46.14B; total equity $21.771B; net debt position: -$1.107B (net cash).
- Liquidity and returns
- Dividends: payout ratio ~30.6%; executives repurchased stock totaling $162M in the quarter; ongoing capital allocation focused on value delivery to members and growth through select openings and digital investments.
Key member metrics and mix
- Paid households: 74.5M; cardholders: 133.9M; renewal rate US/Canada: 93% (up 0.1 ppts QoQ); worldwide renewal: 90.5% (unchanged QoQ).
- Executive members: 34.5M, ~46% of paid members and ~73.1% of worldwide sales.
- Traffic and ticket
- Worldwide shopping frequency: +6.1% YoY; U.S. traffic +5.5%; average ticket +0.5% globally (+0.7% in U.S.).
- E-commerce: +20.7% comp sales; strong online momentum supported by app growth (+32% YoY; 2.5M new downloads in the quarter; total downloads > 35M).
- Gas and FX impact: fx headwinds ~20 bps; gasoline price inflation added ~30 bps to sales.
Operational themes and forward-looking indicators
- Store expansion and capex: opened two U.S. warehouses in Q3, with two more openings post-quarter; guidance for 12 openings in 4Q24 (9 in U.S., 2 in Japan, 1 in Korea); net 29 new warehouses for the year.
- Non-foods strength: highest comp in core categories; momentum driven by quality items with strong member resonance; continued deflation in non-foods (hardware, sporting goods, furniture) aided by lower freight costs.
- Kirkland and value strategy: ongoing price reductions and new Kirkland items (e.g., walking shoe, facial wipes) delivering incremental value; aim to provide at least 20% value vs national-brand equivalents when price value is challenged.
- Digital and logistics: Costco Logistics growth +28% in deliveries; Costco Next added eight vendors (75 total); app downloads >35M; Uber Eats expansion to Canada and 17 U.S. states; cross-border growth potential and international expansion.
- Inflation environment: inflation across core merchandise is flat; fresh categories near zero; some deflation in non-foods offset by e-commerce gains; strategy remains to deliver incremental value to members through price discipline and selective assortment changes.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
58.52B
-25.87%
0.12%
Gross Profit
7.34B
-24.47%
0.55%
Operating Income
2.20B
-21.00%
6.55%
Net Income
1.68B
-22.18%
-3.56%
EPS
3.79
-22.18%
-3.56%
Key Financial Ratios
Gross Profit Margin
Weak
12.50%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Weak
3.75%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
2.87%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
2.48%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
7.72%
Return on equity is acceptable but below top-tier companies
Current Ratio
Concern
0.94
Current ratio below safe levels, potential liquidity risk
Debt to Equity
Moderate
0.43
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
High Growth
51.17x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
15.80x
Very high premium suggests asset-light business model or lofty expectations
Management Insights Available for Members
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