Costco Wholesale Corporation (COST) delivered a strong fiscal third quarter for 2025, showcasing resilience and continued growth across key areas. Net sales climbed to $61.97 billion, an 8.0% increase year-over-year, while total revenue, including membership fees, reached $63.21 billion, up from $58.52 billion. Net income surged 13% to $1.90 billion, or $4.28 per diluted share, reflecting solid operational performance. Operating income rose to $2.53 billion, and a 41 basis point improvement in gross margin—driven by favorable costs in categories like fresh food and gasoline—bolstered profitability.

Comparable sales rose 5.7% on a reported basis and 8.0% when adjusted for gas price deflation and foreign exchange. The U.S. led with 6.6% growth reported and 7.9% adjusted, while e-commerce saw a standout increase of 14.8%, supported by digital enhancements such as a “buy now, pay later” partnership and personalized product offerings.

Membership remains a cornerstone of Costco’s model. Fee revenue grew 10.4% to $1.24 billion, boosted by recent pricing changes and steady sign-ups. Paid household memberships increased 6.8% to 79.6 million, with renewal rates holding strong at 92.7% in the U.S. and Canada. Executive members now account for 47.3% of the base and drive 73.1% of global sales.

Regionally, all segments posted year-over-year gains. In the U.S., revenue rose to $46.32 billion with operating income of $1.71 billion, while Canada and Other International saw similar growth trajectories in both revenue and operating income. Gross margin improvement was a common theme across all geographies.

Operationally, Costco added 29 net new warehouses over the past year, pushing the total to 905. Shopping frequency rose 5.2% globally, and the average ticket increased slightly by 0.4%. Despite higher SG&A costs—now 9.16% of net sales—driven by wage increases and warehouse openings, efficiency gains helped maintain cost discipline.

On the capital front, CapEx reached $1.13 billion in Q3, with full-year spend expected to exceed $5 billion. Costco also raised its quarterly dividend by 12% to $1.30 per share, reinforcing its strong cash generation, with operating cash flow at $9.47 billion and $13.84 billion in cash and equivalents on hand.

Overall, Costco's disciplined approach to pricing, inventory, and sourcing—coupled with its continued investment in digital and physical infrastructure—helped the company outperform amid a complex economic environment. The quarter highlights Costco’s ability to balance member value, operational growth, and shareholder returns.