Executive Summary
Costco Wholesale Corporation (COST.NE) reported QQ2 2025 revenue of $63.72 billion, up 8.9% year over year, with a gross profit of $9.614 billion and a gross margin of approximately 15.09%. Operating income reached $2.316 billion (operating margin ~3.63%), while net income was $1.788 billion with diluted EPS of $4.02-$4.03. The quarter produced free cash flow of about $1.611 billion, supporting a strong liquidity position (cash and cash equivalents of $12.356 billion; net debt about -$4.317 billion) and ongoing capital discipline (capex of $1.137 billion; buybacks of roughly $205 million). These results underscore Costco’s durable member-based model, scale advantages, and efficient working capital management, even as the business navigates a competitive and inflationary retail backdrop.
Key Performance Indicators
Key Insights
Revenue: $63.72B (+8.9% YoY, +2.53% QoQ); Gross Profit: $9.614B (margin ~15.09%, YoY +30.95%, QoQ +19.55%); Operating Income: $2.316B (margin ~3.63%, YoY +5.42%, QoQ +5.46%); Net Income: $1.788B (margin ~2.81%, YoY +6.37%, QoQ -0.56%); EPS: $4.03 (YoY +6.33%, QoQ -0.49%); Cash Flow: Operating CF $2.748B; Free Cash Flow $1.611B; Capex $1.137B; Free Cash Flow Yield and FCF per share reflect disciplined capital deployment; Balance Sheet: Total assets $73.22B; Total liabilities $47.65B; Equity $25.5...
Financial Highlights
Revenue: $63.72B (+8.9% YoY, +2.53% QoQ); Gross Profit: $9.614B (margin ~15.09%, YoY +30.95%, QoQ +19.55%); Operating Income: $2.316B (margin ~3.63%, YoY +5.42%, QoQ +5.46%); Net Income: $1.788B (margin ~2.81%, YoY +6.37%, QoQ -0.56%); EPS: $4.03 (YoY +6.33%, QoQ -0.49%); Cash Flow: Operating CF $2.748B; Free Cash Flow $1.611B; Capex $1.137B; Free Cash Flow Yield and FCF per share reflect disciplined capital deployment; Balance Sheet: Total assets $73.22B; Total liabilities $47.65B; Equity $25.58B; Current ratio ~0.997; Quick ratio ~0.490; Net debt negative ~$4.32B; Cash position robust at ~$12.36B; Inventory $18.75B; AP $18.61B; Debt: LT debt $8.04B; ROIC/ROE remain constructive. Investment metrics show premium multiples (P/B ~18.61, P/E ~66.5, FCF/EV ~0.58, EBITDA/Interest favorable).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
63.72B |
8.90% |
2.53% |
| Gross Profit |
9.61B |
30.95% |
19.55% |
| Operating Income |
2.32B |
5.42% |
5.46% |
| Net Income |
1.79B |
6.37% |
-0.56% |
| EPS |
4.03 |
6.33% |
-0.49% |
Key Financial Ratios
operatingProfitMargin
3.63%
operatingCashFlowPerShare
$6.19
freeCashFlowPerShare
$3.63
dividendPayoutRatio
28.8%
Management Commentary
No earnings call transcript data provided in the input. As a result, transcript highlights cannot be generated from the supplied material. If the transcript is supplied, this section would group management insights by themes such as strategy (membership growth, U.S. pricing and promotions), operations (inventory management, supply chain resilience), market conditions (retailer competitive dynamics, consumer spending), and capital allocation (buybacks, dividends, capex trajectory).
Forward Guidance
Costco did not publish explicit forward-looking targets within the provided data. Nevertheless, the QQ2 2025 results imply continued strength in the membership model, healthy cash generation, and capital flexibility. Key factors for monitoring include: (1) membership renewal trajectory and international member acquisition, (2) gross margin progression amid mix changes and supplier terms, (3) e-commerce and omnichannel penetration vs. traditional warehouse sales, (4) capex intensity for new warehouses and technology investments, and (5) currency and inflationary pressures in international markets. Given Costco’s track record of durable cash flow, the balance of shopping frequency, ticket size, and private-label mix (Kirkland) should support earnings stability, albeit with sensitivity to consumer sentiment and supplier costs. Management’s ability to maintain favorable terms with suppliers and scalable store openings will be critical to sustaining FCF growth and deleveraging opportunities.