Mirror Review
May 30th, 2025
Summary:
- Costco Wholesale recently released its third-quarter fiscal 2025 financial results that exceeded Wall Street’s expectations.
- The Costco Q3 2025 earnings reported an 8% jump in sales. Still, the stock saw a slight dip after the announcement.
- For its fiscal third quarter, which ended on May 11, 2025, Costco reported earnings per share of $4.28, slightly above the expected $4.24.
- Revenue came in at $63.21 billion, just ahead of the $63.19 billion forecast.
- Net income rose to $1.90 billion, or $4.28 per share, compared to $1.68 billion, or $3.78 per share, in the same quarter last year—marking a solid year-over-year gain.
Strong Sales Momentum in Costco’s Latest Results
- Costco posted solid revenue growth this quarter, rising from $58.52 billion compared to the same period last year.
- One standout figure is its comparable sales—a key retail metric (that excludes new store openings and closures) which jumped 8% when adjusted for gas prices and foreign exchange rates.
- E-commerce sales were powerful, climbing nearly 16% under the same conditions.
- However, total global comparable store sales, including these factors, rose 5.7%.
- Regionally, U.S. comparable sales grew by 6.6%, Canada saw a 2.9% rise, and other international locations experienced a 3.2% increase.
Key Insights on Costco Q3 2025 Earnings
Here are a few important things to note from Costco’s Q3 results and executive commentary:
- What Are Costco’s Tariff Management Strategies?
- Costco has actively worked to mitigate the impact of tariffs. CEO Ron Vachris stated that the company rushed shipments to get ahead of tariff implementations and rerouted goods from countries with higher tariffs to its non-U.S. markets.
- The retailer is also sourcing more items for its private-label brand, Kirkland Signature, in the regions where those products are sold. Vachris emphasized, “Costco has looked for ways to reduce tariff costs while keeping prices low”.
- According to CFO Gary Millerchip, about one-third of Costco’s U.S. sales are from imported goods. Moreover, items from China account for approximately 8% of total U.S. sales.
- Will Costco Be Raising Prices Amidst Rising Costs?
- Despite tariff pressures, Costco affirmed that raising prices would be a “last resort”.
- The company has even lowered prices on certain items like eggs, butter, and olive oil.
- In some instances, Costco has absorbed tariff-related cost differences, particularly for staple items like pineapples and bananas.
- Millerchip explained, “We felt it was important to to really eliminate the impact there for the member by working with our suppliers and by us finding efficiencies and accepting that there may be a margin impact”.
- Conversely, for more discretionary items such as flowers from Central and South America, the company did decide to increase prices.
- Does Costco Have a Unique Competitive Advantage?
- In today’s uncertain trade environment, where tariffs keep shifting, more people are likely to turn to Costco. Why? Because it’s known for offering great prices and big discounts on bulk purchases.
- Costco also stands out because of how it runs its stores. Instead of offering a huge variety, it sticks to a more focused selection of products. This makes it easier for the company to strike better deals with suppliers and swap out items when needed.
- Plus, essentials like discounted gas and groceries continue to bring in steady foot traffic. To give members even more value, Costco is now keeping its gas stations open longer.
- How is Costco Handling Evolving Consumer Behavior?
- Costco’s private label, Kirkland Signature, is a major hit—and it played a big role in the company beating sales expectations.
- With rising inflation, more people are choosing to buy in bulk to save money. Costco is in a great position to meet this growing demand and serve these cost-conscious shoppers.
- To aid cash-strapped consumers and small businesses, Costco partnered with Affirm in May to offer monthly payment plans for larger online purchases.
- Following high demand, Costco also recently placed a purchase limit on gold bars. Estimates from April 2024 suggested Costco was selling between $100 million and $200 million in gold bars monthly.
- Solid Financial Health and Shareholder Returns:
- Costco’s strong jump in net income and earnings per share highlights its solid financial strength.
- So far this year, Costco’s stock is up about 10%, outpacing the S&P 500’s performance during the same time.
- In April, the company also raised its quarterly cash dividend from $1.16 to $1.30 per share, giving shareholders an even bigger return.
Conclusion
The Costco Q3 2025 earnings show how well the company is handling today’s challenging global market.
By staying focused on delivering value to its members, managing supply chain and tariff issues smartly, and sticking to its unique business model, Costco continues to perform strongly—even in tough economic times.
These solid Costco earnings highlight their strength and reliability as a leader in the retail world.
