Executive Summary
Costco delivered a resilient QQ4 2025 that blends revenue growth with margin discipline and strong cash generation. Revenue reached $86.156 billion, up 8.1% year over year and up 36.3% quarter over quarter, reflecting seasonality, strong member activity, and ongoing pricing/assortment benefits. Gross profit totaled $11.119 billion with a gross margin of approximately 12.9%, while operating income was $3.341 billion and net income stood at $2.61 billion, yielding a net profit margin around 3.03% and an EPS of $5.88. The company generated operating cash flow of $3.867 billion and free cash flow of about $1.901 billion, ending the period with $14.161 billion in cash and cash equivalents and a net cash position of roughly $11.701 billion after debt and financing activity. The balance sheet remains robust, with total assets near $77.1 billion and strong liquidity, supporting capital-allocation priorities including buybacks and dividends. Management commentary continues to emphasize disciplined pricing, member retention, and selective investment to drive sustainable membership growth, online penetration, and private-label expansion. Given these dynamics, Costco is positioned to sustain margin resilience and cash generation, even as it navigates macro headwinds and competitive pressures in the discount channel.
Key Performance Indicators
Key Insights
Revenue: $86.156B (YoY +8.10%, QoQ +36.31%).
Gross Profit: $11.119B; Gross Margin: ~12.90% (YoY +9.99%, QoQ +35.45%).
Operating Income: $3.341B; Operating Margin: ~3.88% (YoY +9.83%, QoQ +32.06%).
Net Income: $2.61B; Net Margin: ~3.03% (YoY +10.88%, QoQ +37.15%).
EPS: $5.88; Diluted EPS: $5.87 (YoY +10.94%, QoQ +37.06%).
Cash Flow: Operating cash flow $3.867B; Free cash flow $1.901B; Capex $1.966B;
Free Cash Flow Yield and cash conversion supported by strong working capital and inventory manage...
Financial Highlights
Revenue: $86.156B (YoY +8.10%, QoQ +36.31%).
Gross Profit: $11.119B; Gross Margin: ~12.90% (YoY +9.99%, QoQ +35.45%).
Operating Income: $3.341B; Operating Margin: ~3.88% (YoY +9.83%, QoQ +32.06%).
Net Income: $2.61B; Net Margin: ~3.03% (YoY +10.88%, QoQ +37.15%).
EPS: $5.88; Diluted EPS: $5.87 (YoY +10.94%, QoQ +37.06%).
Cash Flow: Operating cash flow $3.867B; Free cash flow $1.901B; Capex $1.966B;
Free Cash Flow Yield and cash conversion supported by strong working capital and inventory management.
Balance Sheet: Total assets $77.099B; Cash & equivalents $14.161B; Inventory $18.116B; Total current liabilities $37.108B; Total debt $2.46B; Net debt (cash) approx. -$11.701B; Equity ~$29.164B.
Industry context: Margin profile and cash generation align with Costco’s membership-driven model and scale advantages, offering resilience against near-term inflationary pressures and competitive discounting.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
86.16B |
8.10% |
36.31% |
| Gross Profit |
11.12B |
9.99% |
35.45% |
| Operating Income |
3.34B |
9.83% |
32.06% |
| Net Income |
2.61B |
10.88% |
37.15% |
| EPS |
5.88 |
10.94% |
37.06% |
Management Commentary
Note: The input did not include the earnings call transcript. The following highlights are derived from the QQ4 2025 disclosed results and typical management emphasis observed in Costco communications. Key themes likely to be central in management discussions include: (1) membership-driven growth and renewal dynamics supporting durable cash flows; (2) multi-channel strategy including e-commerce and private-label expansion (Kirkland) contributing to margin resilience; (3) cost discipline and operating leverage against inflationary pressures; (4) international expansion progress and currency considerations; (5) capital allocation priorities including buybacks and dividends aligned with free cash flow strength.
Forward Guidance
Costco did not publish a new explicit numeric full-year guidance in the QQ4 2025 release. Based on the results and typical management commentary, the forward-looking narrative centers on: (1) continued member retention and modest core-price integrity balanced with value messaging; (2) ongoing expansion of the international footprint and e-commerce capabilities to lift same-store sales and per-member spend; (3) private-label (Kirkland) initiatives to bolster gross margin and product differentiation; (4) disciplined capital allocation focused on buybacks and maintaining a strong balance sheet. Assessment: Given the 8.1% revenue growth and a stable mid-teens gross margin backdrop, the path to mid-to-high single-digit top-line growth and modest margin expansion remains plausible, contingent on input cost evolution, currency movements, and the pace of international expansion. Key factors for investors to monitor include membership renewal/upgrade rates, per-member spend trends, mix effects (grocery vs non-grocery), commodity inflation, freight costs, and any changes in reformulated pricing strategies across regions.