Costco Reports 8% Revenue Growth to $61.965 Billion in Q3 Fiscal 2025

Costco Wholesale Corporation reported a strong financial performance for the third quarter of fiscal 2025, ending May 11, 2025, with net sales reaching $61.965 billion, an increase of 8% compared to $57.392 billion in the same period last year. The growth was primarily driven by a 6% increase in comparable sales and the addition of 29 new warehouses since the end of the previous fiscal year. Membership fee revenue also saw a notable rise, increasing 10% to $1.240 billion, attributed to new member sign-ups and recent membership fee increases.

In terms of profitability, net income for the quarter rose to $1.903 billion, or $4.28 per diluted share, compared to $1.681 billion, or $3.78 per diluted share, in the prior year. The gross margin percentage improved by 41 basis points to 11.25%, with a notable increase in core merchandise categories, particularly in fresh foods and foods and sundries. However, the company faced challenges from lower gasoline prices, which negatively impacted net sales by approximately $642 million during the quarter.

Costco's operational metrics reflected positive trends, with total paid members increasing to 79.6 million, up from 74.5 million a year earlier. The renewal rate for memberships stood at 92.7% in the U.S. and Canada, although it was slightly affected by a digital promotion that led to a higher number of new sign-ups. The company also reported a 15% increase in e-commerce sales, indicating strong online engagement.

The filing highlighted strategic developments, including the opening of 17 new warehouses in the first thirty-six weeks of 2025, with plans for an additional ten openings by the end of the fiscal year. Costco's focus on expanding its footprint in both domestic and international markets remains a key component of its growth strategy. The company continues to manage costs effectively, although it acknowledged that certain expenses, particularly related to employee compensation and healthcare, are outside its control.

Looking ahead, Costco remains optimistic about its growth trajectory, emphasizing the importance of maintaining competitive pricing and enhancing member loyalty. The company anticipates that its ongoing investments in technology and operational efficiencies will support future sales growth. Despite potential challenges from economic conditions and competition, Costco's management believes that its business model positions it well for continued success in the retail sector.