Costco Wholesale reported strong results for the fiscal first quarter of 2025, with net sales increasing 7.5% year-over-year. The company’s impressive growth is attributed to its membership-based business model, which drives customer loyalty by offering products at lower prices. One notable aspect of Costco’s sales growth is its e-commerce segment, which surged by 13% year-over-year in Q1.
This development mirrors strategies seen at other retail giants like Walmart, which has successfully expanded its profit margins through its thriving e-commerce business and retail media operations. CFO Gary Millerchip stated that Costco is in the early stages of exploring retail media, suggesting that important chapters in the company’s growth story are still unfolding. Costco slightly beat estimates in its fiscal first quarter results, with adjusted earnings per share of $4.04 and revenue of $62.15 billion.
Same-store sales, excluding fuel, grew 7.2% in the quarter, bolstered by its US business, followed by international markets and then Canada. Millerchip mentioned that there is a “bifurcation” among consumers in food shopping, with some buying higher-priced meats, while others opt for lower-priced items like poultry and certain cuts of beef and pork. Costco increased the price of its Gold Star membership to $65 and its Executive membership to $130 on Sept.
1. Membership fee income grew 7.8% to $1.17 billion, and renewal rates reached 90.4%.
Costco’s Q1 membership and e-commerce rise
The company has 138.8 million cardholders, a 7.2% increase year over year. Costco operates 897 warehouses worldwide, with CEO Craig Jelinek expecting roughly 30 new warehouses to open per year, with a significant portion outside the US. Oppenheimer analyst Rupesh Parikh called Costco a “Top Pick,” citing a strong outlook for market share gains and robust top-line momentum.
However, Millerchip noted that a stock split isn’t currently in the plans, despite the stock’s high price around $1,000 per share. Costco’s net income increased to $1.80 billion, or $4.04 per share, in the three-month period ended November 24. Strong sales of meat and produce suggest that more shoppers are opting to dine at home.
Several product categories showed strong performance, with sales of gold and jewelry, gift cards, home furnishings, sporting goods, health and beauty aids, luggage, kiosks, and hardware all seeing double-digit growth. Costco’s private label brand, Kirkland Signature, saw faster growth than the overall business. E-commerce sales surged by 13% compared to the same quarter last year, with increased market share in shipping large items helping Costco set a new record with nearly 1 million deliveries in the quarter.
As of Thursday’s close, Costco shares have risen by nearly 50% this year, outpacing the S&P 500’s 27% gain over the same period. The company’s impressive earnings and revenue performance underscore its strong position in the retail market, benefiting from both increased in-store traffic and robust e-commerce sales.
