Costco Wholesale Corporation (NASDAQ: COST) Q3 2025 Earnings Call | Record Sales | 5/30/2025

Financial Performance

Costco's net income for Q3 2025 was $1.9 billion or $428 per diluted share, marking a significant increase from the previous year. This strong performance was attributed to robust sales and margin growth despite a $130 million LIFO charge and foreign exchange headwinds.

Net sales reached $61.96 billion for the quarter, an 8% increase compared to last year.

The impact of foreign exchange and gas price deflation negatively affected sales figures, with notable performance metrics showing 6.6% growth in US comparable sales.

Warehouse Growth

Costco has opened nine new warehouses since the last earnings call, with plans to open 10 more in the fourth fiscal quarter, including locations in Sweden and Korea.

This expansion reflects an ongoing strategy to enhance its global footprint and reach more members, aiming for a total of 914 warehouses globally by the end of the fiscal year.

Kirkland Signature Success

The company's Kirkland Signature brand continues to resonate with members, showing growth in penetration by approximately 50 basis points year-over-year, benefiting from pricing strategies and localized sourcing.

The sourcing strategy aims to mitigate the impacts of tariffs while maintaining price competitiveness, further increasing brand loyalty among members.

E-commerce Expansion

E-commerce sales grew by 14.8%, supported by the introduction of a buy now, pay later program through a firm partnership, allowing members to better afford larger purchases.

Technology investments in member experience, such as personalized product recommendations and faster checkout processes, are expected to enhance e-commerce growth going forward.

Gas Stations Performance

The new gas station openings and extended hours have significantly benefited sales, culminating in achieving two of the highest-ever sales weeks in the US for Costco.

The integration of gas stations into Costco's offerings helps drive additional foot traffic and higher overall sales volumes, aligning with the strategy to deliver maximum value to members.