Costco delivers solid Q3 FY2025 results amid macro headwinds
Overview
Costco reported its financial results for the third quarter of fiscal year 2025, showcasing continued strength in sales and profitability despite a challenging macroeconomic environment. The company benefited from robust consumer demand, a growing member base, and efficient cost controls, which together contributed to solid top- and bottom-line growth. Notably, e-commerce momentum and global expansion initiatives played an increasingly important role in the quarter’s performance.
Q3 FY2025 vs. Q3 FY2024:
- Net sales increased to $61.96bn (+8.0% YoY), supported by broad-based strength across geographies and product categories.
- Comparable sales growth (ex. gas & FX) was +6.6% YoY in U.S., +2.9% YoY in Canada, +3.2% YoY in Other International and +14.8% YoY in E-commerce, driven by strong digital engagement and seamless omni-channel execution.
- Total revenue rose to $63.21bn (+8.0% YoY), reflecting higher membership fees and sales volumes.
- Operating income recorded a value of $2.53bn (+15.2% YoY), reflecting improved cost management and economies of scale.
- Net income grew to $1.90bn (+13.2% YoY), or $4.28 per diluted share (vs. $3.78 per diluted share in Q3 FY2024).
Year-to-Date performance (36 weeks):
- Net sales rose to $185.48bn (+8.2% YTD).
- Net income was $5.49bn (+9.6% YTD), or $12.34 per diluted share (vs. $11.27 per diluted share in 2024).
- Cash & cash equivalents surged to $13.84bn, reflecting strong operating cash flow of $9.47bn YTD.
- Share repurchases totaled $623m, while dividends paid amounted to $1.03bn, reinforcing shareholder return commitment.
- Costco continued investing in growth with $3.53bn in capital expenditures YTD.
- The company now operates 905 warehouses globally, including 624 in the U.S., with continued international expansion in regions such as Asia and Europe.
While Costco does not typically provide forward guidance, the company remains focused on delivering value through competitive pricing, strategic expansion, and strong membership retention. With a healthy cash position, consistent sales growth, and disciplined capital allocation, Costco is well-positioned to navigate potential economic uncertainties and sustain its long-term growth trajectory.
Costco’s financial results were met with a subdued reaction from the market, reflected in a relative price stability in the pre-market, which fell by only -0.12%. From a technical point of view, the stock remains in a positive context, remaining above the essential moving averages and having increased by almost +11% since the beginning of this year. However, the declining RSI and the lack of strong momentum after the earnings suggest a possible consolidation phase in the range of $980-$1050. Confirmation of a continuation of the upward trend would require a clear return above the resistance area of $1030-$1050, supported by volume.
Author: Ionuț-Adrian Lazar
