Q4 2025 Costco Wholesale Corp Earnings Call Transcript
Key Points
- Costco Wholesale Corp (COST) opened 27 new warehouses in fiscal year 2025, with plans to open another 35 in fiscal year 2026, indicating strong expansion efforts.
- Net sales increased by over 8% to just under $270 billion, with e-commerce sales growing over 15% to exceed $19.6 billion.
- The company reported a net income increase of 11% year-over-year, with earnings per diluted share up 14% when excluding a non-recurring tax benefit from the previous year.
- Membership fee income grew by 14% year-over-year, driven by a strong increase in Executive memberships and new member sign-ups.
- Costco's private label, Kirkland Signature, continues to grow in sales penetration, offering high-quality value to members and helping mitigate inflationary impacts.
- The renewal rate for memberships has declined, attributed to a higher number of online sign-ups, which typically renew at a lower rate.
- SG&A expenses increased by 17 basis points year-over-year, partly due to investments in employee wages and general liability charges.
- Gas price deflation negatively impacted sales by approximately 0.9%, affecting overall comparable sales growth.
- The company faced a $43 million LIFO charge in Q4 due to inflation, compared to an $8 million credit in the previous year.
- Non-Food inflation returned for the second consecutive quarter, driven by imported items, impacting overall cost management.
Ladies and gentlemen, thank you for standing by. My name is Abby, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Costco Wholesale Corporation's fourth quarter fiscal '25 earnings call. (Operator Instructions)
And thank you. I would now like to turn the conference over to Mr. Gary Millerchip, Chief Financial Officer. You may begin.
Good afternoon, everyone, and thank you for joining us for Costco's fourth quarter 2025 earnings call. I'd like to start by reminding you that these discussions will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause actual events, results and, or performance to differ materially from those indicated by such statements.
The risks and uncertainties include, but are not limited to, those outlined in today's call as well as other risks identified from time
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