Costco posts strong Q1, will open 26 new clubs in 2025
Costco announced its operating results for the first quarter of fiscal 2025, 12 weeks ended Nov. 24, reporting that net sales increased 7.5%, to $60.99 billion from $56.72 billion last year.
Comparable sales for the first quarter fiscal 2025 were as follows:
12 Weeks:
- U.S. 5.2%
- Canada 5.8%
- Other International 4.7%
- Total Company 5.2%
- E-commerce 13%
12 weeks adjusted (Excluding the impacts from changes in gasoline prices and foreign exchange)
- U.S. 7.2%
- Canada 6.7%
- Other Internatioanl 7.1%
- Total Company 7.1%
- E-commerce 13.2%
Costco's net income for the quarter was $1.798 billion, $4.04 per diluted share, compared to $1.589 billion, $3.58 per diluted share, last year. This year’s results included a tax benefit of $100 million, 22 cents per diluted share, related to stock-based compensation. Last year’s results included a tax benefit of $44 million, 10 centers per diluted share, also related to stock-based compensation.
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During Costco’s earnings call, Ron Vachris, president and CEO, said that in the first quarter of fiscal '25, the retailer opened seven new warehouses. This included one relocation and resulted in six net new buildings, of which four were outside of the United States.
Additionally, after the end of the quarter, on the day before Thanksgiving, Costco opened its 897th warehouse in Pleasanton, Calif.
“That opening had the highest-ever opening day sales for a U.S. warehouse at $2.9 million that day. We continue to project 29 openings during fiscal year '25, of which three will be relocations and so 26 net new buildings. Ten of those warehouses will be outside of the United States," Vachris said.
Vachris also noted that Costco’s U.S. pharmacy business has prescription growth exceeding 19% for the first quarter, setting new volume records for that business. “And lastly, we continue to gain market share with our e-commerce big-and-bulky fulfilled by Costco Logistics. Costco Logistics completed nearly 1 million deliveries in Q1 and over 196,000 deliveries last week alone. That was a new record as well,” Vachris said. He added that the majority of these deliveries were completed in four days from the members ordering their merchandise online.
“All of these milestones reflect the continued strength of our business across the membership offering. These great results are a reflection of the outstanding work done by our over 330,000 employees around the world. Their commitment to our company and the Costco experience for our members is truly inspiring,” Vachris said.
Gary Millerchip, executive vice president and chief financial officer at Costco commented on Costco’s ancillary businesses, noting that pharmacy had the strongest sales growth.
“Our focus continues to be on keeping prescription and OTC prices low while also leveraging technology to make it easier for our members to use our pharmacy," Millerchip said, citing recent examples, including the introduction of new prescription inventory management software to better stay in stock and enable delivery of prescriptions via Instacart.
Pointing out that traffic or shopping frequency increased 5.1% worldwide and 4.9% in the United States, Millerchip said, "Our average transaction or ticket was up 0.1% worldwide and 0.3% in the U.S. This includes the headwinds from gas deflation and FX. Adjusted for those items, ticket would have been up 2% worldwide and up 2.3% in the U.S."
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Costco currently operates 897 warehouses, including 617 in the United States and Puerto Rico, 109 in Canada, 41 in Mexico, 36 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France and one each in Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.