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Costco Wholesale Corporation (COST - Free Report) reported third-quarter fiscal 2025 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate and increased year over year. The company also registered decent comparable sales growth during the quarter.
Costco’s Quarterly Performance: Key Metrics and Insights
Costco reported quarterly earnings of $4.28 per share for the quarter under review, which beat the Zacks Consensus Estimate of $4.25. The metric increased from $3.78 reported in the prior-year period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Total revenues, comprising net sales and membership fees, reached $63,205 million, marking an 8% increase from the year-ago quarter. The metric also came ahead of the Zacks Consensus Estimate of $63,140.5 million.
Costco’s comparable sales rose 5.7% year over year in the quarter, surpassing our 4.7% estimate. Comparable sales in the United States grew 6.6%, while Canada and Other International markets saw increases of 2.9% and 3.2%, respectively.
Costco’s strategic investments, customer-centric approach and merchandise initiatives, along with an emphasis on membership growth, have helped it capture market share and maintain steady revenue growth. By prioritizing value and quality, the company has built strong customer loyalty, leading to an impressive worldwide membership renewal rate of 90.2% in the quarter.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Achieves Membership Growth and Improved Margins
Costco's net sales rose 8% year over year to $61,965 million, while membership fees increased 10.4% to $1,240 million in the reported quarter. The company ended the quarter with 79.6 million paid household members, up 6.8% from the prior year. The number of total cardholders grew 6.6% to reach 142.8 million.
Traffic or shopping frequency improved 5.2% globally and 5.5% in the United States, while the average transaction or ticket grew 0.4% worldwide and 1.1% in the United States.
Comparable sales, excluding gasoline prices and foreign exchange impacts, rose 8%. In the United States, comparable sales increased 7.9%, while Canada and Other International markets saw gains of 7.8% and 8.5%, respectively.
Costco’s e-commerce performance was strong, with comparable sales rising 14.8% year over year, or 15.7%, after excluding the impact of gasoline prices and currency fluctuations.
The gross margin expanded 41 basis points year over year to 11.3%. The operating income grew 15.2% to $2,530 million, while the operating margin improved 20 basis points to 4%. We had projected a 10-basis-point increase in both the gross and operating margins.
Costco's Store Updates and Expansion Plans
Costco currently operates 905 warehouses. These include 624 in the United States and Puerto Rico, 109 in Canada, 41 in Mexico, 37 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden.
During the quarter under discussion, Costco opened nine warehouses, including one relocation in Melbourne, Australia, the 37th warehouse in Japan, and seven net new U.S. locations. For fiscal 2025, management plans to open 27 warehouses, including three relocations.
Costco’s Financial Health Snapshot
Costco ended the reported quarter with cash and cash equivalents of $13,836 million and long-term debt (excluding the current portion) of $5,717 million. Shareholders’ equity was $27,125 million. Management incurred capital expenditures of roughly $1.13 billion in the quarter. Costco foresees capital expenditures of little more than $5 billion for fiscal 2025.
Shares of this Zacks Rank #2 (Buy) company have advanced 10.1% year to date compared with the industry’s rise of 4.5%.
Other Stocks to Consider
Sprouts Farmers (SFM - Free Report) , which is engaged in the retailing of fresh, natural and organic food products, currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 16.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of 13.7% and 35.5%, respectively, from the year-ago reported numbers.
Nomad Foods Limited (NOMD - Free Report) , Europe's leading frozen food company, currently sports a Zacks Rank #1. NOMD has a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings calls for growth of 4.6% and 7.3% from the year-ago reported numbers.
Grocery Outlet (GO - Free Report) , an extreme value retailer of quality, name-brand consumables and fresh products, carries a Zacks Rank #2. GO has a trailing four-quarter earnings surprise of 25.7%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales suggests growth of around 7.9% from the year-ago reported numbers.
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Costco Q3 Earnings Beat Estimates, E-Commerce Comp Sales Rise
Costco Wholesale Corporation (COST - Free Report) reported third-quarter fiscal 2025 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate and increased year over year. The company also registered decent comparable sales growth during the quarter.
Costco’s Quarterly Performance: Key Metrics and Insights
Costco reported quarterly earnings of $4.28 per share for the quarter under review, which beat the Zacks Consensus Estimate of $4.25. The metric increased from $3.78 reported in the prior-year period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Total revenues, comprising net sales and membership fees, reached $63,205 million, marking an 8% increase from the year-ago quarter. The metric also came ahead of the Zacks Consensus Estimate of $63,140.5 million.
Costco’s comparable sales rose 5.7% year over year in the quarter, surpassing our 4.7% estimate. Comparable sales in the United States grew 6.6%, while Canada and Other International markets saw increases of 2.9% and 3.2%, respectively.
Costco’s strategic investments, customer-centric approach and merchandise initiatives, along with an emphasis on membership growth, have helped it capture market share and maintain steady revenue growth. By prioritizing value and quality, the company has built strong customer loyalty, leading to an impressive worldwide membership renewal rate of 90.2% in the quarter.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation Quote
Costco Achieves Membership Growth and Improved Margins
Costco's net sales rose 8% year over year to $61,965 million, while membership fees increased 10.4% to $1,240 million in the reported quarter. The company ended the quarter with 79.6 million paid household members, up 6.8% from the prior year. The number of total cardholders grew 6.6% to reach 142.8 million.
Traffic or shopping frequency improved 5.2% globally and 5.5% in the United States, while the average transaction or ticket grew 0.4% worldwide and 1.1% in the United States.
Comparable sales, excluding gasoline prices and foreign exchange impacts, rose 8%. In the United States, comparable sales increased 7.9%, while Canada and Other International markets saw gains of 7.8% and 8.5%, respectively.
Costco’s e-commerce performance was strong, with comparable sales rising 14.8% year over year, or 15.7%, after excluding the impact of gasoline prices and currency fluctuations.
The gross margin expanded 41 basis points year over year to 11.3%. The operating income grew 15.2% to $2,530 million, while the operating margin improved 20 basis points to 4%. We had projected a 10-basis-point increase in both the gross and operating margins.
Costco's Store Updates and Expansion Plans
Costco currently operates 905 warehouses. These include 624 in the United States and Puerto Rico, 109 in Canada, 41 in Mexico, 37 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden.
During the quarter under discussion, Costco opened nine warehouses, including one relocation in Melbourne, Australia, the 37th warehouse in Japan, and seven net new U.S. locations. For fiscal 2025, management plans to open 27 warehouses, including three relocations.
Costco’s Financial Health Snapshot
Costco ended the reported quarter with cash and cash equivalents of $13,836 million and long-term debt (excluding the current portion) of $5,717 million. Shareholders’ equity was $27,125 million. Management incurred capital expenditures of roughly $1.13 billion in the quarter. Costco foresees capital expenditures of little more than $5 billion for fiscal 2025.
Shares of this Zacks Rank #2 (Buy) company have advanced 10.1% year to date compared with the industry’s rise of 4.5%.
Other Stocks to Consider
Sprouts Farmers (SFM - Free Report) , which is engaged in the retailing of fresh, natural and organic food products, currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 16.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of 13.7% and 35.5%, respectively, from the year-ago reported numbers.
Nomad Foods Limited (NOMD - Free Report) , Europe's leading frozen food company, currently sports a Zacks Rank #1. NOMD has a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings calls for growth of 4.6% and 7.3% from the year-ago reported numbers.
Grocery Outlet (GO - Free Report) , an extreme value retailer of quality, name-brand consumables and fresh products, carries a Zacks Rank #2. GO has a trailing four-quarter earnings surprise of 25.7%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales suggests growth of around 7.9% from the year-ago reported numbers.