Costco (COST) Q4 2025 earnings

Costco Tops Wall Street Expectations with Strong Quarterly Earnings

Costco, the popular warehouse club, has reported impressive quarterly earnings, surpassing Wall Street’s expectations. The company’s strong performance was driven by double-digit gains in membership income and e-commerce sales. This success is a testament to Costco’s ability to adapt to changing market conditions and consumer behavior.

In a recent earnings call, CFO Gary Millerchip highlighted the company’s efforts to offset higher tariff costs. By introducing new items from its Kirkland Signature private-label brand, Costco has been able to provide alternatives to goods affected by tariffs. Additionally, the company has been changing its merchandise assortment to include more U.S.-made items and categories with less tariff exposure, such as health and beauty products.

Key Financial Highlights

Costco’s net income for the quarter rose to $2.61 billion, or $5.87 per share, compared to $2.35 billion, or $5.29 per share, a year earlier. Revenue increased from $79.7 billion in the year-ago period to $86.16 billion. The company’s same-store sales, excluding the impact of gas prices and foreign exchange, rose 6.4%. E-commerce sales also saw a significant increase of 13.5% compared to the year-ago period.

Costco’s membership fee total jumped about 14% in the quarter, reflecting the company’s growing membership base and higher fees. Last fall, the company raised its membership fee for the first time since 2017, with shoppers now paying $5 more per year or $10 more annually for its higher-tier membership.

Future Expansion Plans

During the earnings call, CEO Ron Vachris announced that Costco opened 27 new warehouses, including three relocations, and plans to open another 35 warehouses in the coming fiscal year. This expansion is expected to further increase the company’s revenue and membership base. Traffic to stores and Costco’s website rose 3.7% globally, while average transaction size climbed 2.6% worldwide, excluding gas and foreign exchange changes.

Despite its strong quarterly performance, Costco’s shares have underperformed the market in recent times. However, over the past five years, the company’s shares have jumped by about 180%. As the retail landscape continues to evolve, Costco’s ability to adapt and innovate will be crucial to its long-term success.