Costco Wholesale (0I47.L) Q4 2024 Earnings Report

Costco reported a robust Q4 FY2024 in USD with a notable leap in revenue and profitability metrics driven by resilient demand across core categories and ongoing membership dynamics. Revenue reached approximately $79.70 billion, up 36.37% year over year and 36.20% quarter over quarter, reflecting both base effects and strategic scaling in international markets. Gross profit rose to about $10.11 billion with a gross margin of 12.68%, while operating income climbed to $3.042 billion (operating margin ~3.82%), underscoring operating leverage as the company leverages its cost structure and scale. Net income of roughly $2.35 billion and diluted EPS of $5.29–$5.30 mark a solid profitability trajectory, supported by orderly SG&A management and a favorable tax rate profile. Free cash flow was strong at about $1.38 billion, with operating cash flow of $2.96 billion and capital expenditures of $1.58 billion, yielding meaningful FCF generation that funds buybacks and dividends while maintaining a strong balance sheet. Costco preserves a net cash position (net debt of approximately -$1.63 billion) and a conservative capital structure, which provides significant optionality to navigate macro volatility, currency movements, and competitive pressures in a highly fragmented retail landscape. Looking ahead, the business appears well-positioned to sustain growth through its membership model, disciplined price leadership, and international expansion. Key risks include macro consumer spending shifts, wage and logistics costs, currency headwinds in non-US markets, and competitive intensity from e-commerce-native players and other wholesale retailers. The combination of durable cash flows, a high-quality asset base, and a track record of returning capital supports an constructive long-run investment thesis, albeit with a recognition of the cyclically sensitive nature of consumer discretionary spend within discount retail.