Costco Wholesale Corporation has reported a strong performance in its fiscal third quarter ending May 11, 2025, exceeding key earnings and revenue expectations despite ongoing challenges related to tariffs. Nevertheless, the company’s shares experienced a slight decline following the announcement.
The warehouse retail giant posted earnings per share of $4.28, marginally above the $4.24 forecasted by analysts surveyed by LSEG, while revenues reached $63.21 billion, narrowly surpassing the anticipated $63.19 billion. This marks an 8% increase in revenue compared with the same quarter the previous year, when sales were approximately $58.2 billion.
Net income rose notably to $1.90 billion, or $4.28 per diluted share, up from $1.68 billion, or $3.78 per share, a year earlier. Comparable sales—a crucial retail metric that excludes the effects of store openings and closures—increased by 8%, with e-commerce sales surging nearly 16% when excluding fuel and currency fluctuations.
Costco operates a global network of 905 warehouses, including 624 in the United States and Puerto Rico, alongside numerous locations in Canada, Mexico, Japan, the United Kingdom, and other countries. This extensive presence supports its strong sales performance.
Despite the pressures imposed by tariffs, CEO Ron Vachris emphasised the company’s dedication to maintaining low prices for its members. “We’re going to continue to invest in price. It’s what we do. It’s how we grow our business, and we’re going to continue to try and mitigate as much of this impact on tariffs as we can for our members,” he said during the earnings call.
Costco has adopted several measures to alleviate tariff impacts, including advancing shipments ahead of tariff deadlines, rerouting goods to non-U.S. markets where tariffs are higher, and increasing sourcing for its Kirkland Signature private label products within the regions where they are sold.
CFO Gary Millerchip noted that price increases are “always seen as a last resort,” with the company absorbing some tariff-related costs while selectively raising prices on discretionary items such as flowers, but maintaining stable prices on staples like pineapples and bananas to protect member value.
Approximately one-third of Costco’s U.S. sales involve imported goods, with around 8% originating from China. The company’s scale grants it leverage in supplier negotiations, enabling it to better manage cost pressures compared to many competitors.
Costco continues to benefit from strong consumer loyalty, boasting a record 93% membership renewal rate. Its value proposition—combining competitive pricing, bulk discounts, and quality products—remains compelling, particularly as economic uncertainty and tariff volatility influence shopping behaviour.
The company has also improved membership appeal by extending the operating hours of its petrol stations, which offer discounted fuel, a reliable draw for customers even during periods of tighter spending.
In April 2025, U.S. comparable store sales grew by 7.1%, and customer traffic increased by 5%, indicating sustained consumer demand. E-commerce sales also expanded by 13% year-on-year, underscoring Costco’s growing digital presence.
Following the earnings release, Costco’s shares demonstrated resilience, having already gained approximately 10% year-to-date by late May, outperforming the S&P 500 index, which rose less than 1% over the same period.
Analysts remain optimistic about Costco’s ability to steer through the current economic environment. UBS analyst Michael Lasser described Costco as “a good place to be,” highlighting the company’s agility in managing inventory and pricing amid uncertain market conditions. The high-margin revenue from membership fees, recently increased for the first time since 2017, provides additional financial flexibility to absorb cost pressures without compromising price competitiveness.