By Alex V 
Costco Wholesale (NASDAQ: COST) reported stronger-than-expected third-quarter earnings for fiscal year 2025, reinforcing its reputation as a resilient retail giant. The retailer beat Wall Street forecasts on both revenue and profit, bolstered by strong consumer demand, rising membership fees, and brisk sales growth abroad.
Costco’s Q3 2025 Results Outpace Projections
Costco continues to stand out among major retailers, delivering impressive financial results in a challenging economic environment. For the quarter ending May 12, 2025, the company posted net sales of $57.39 billion, up 9.1% year-over-year. Total revenue, including membership fees, climbed to $59.72 billion, handily surpassing analyst expectations.
Net income for the period reached $1.68 billion, an increase from $1.30 billion in the same quarter last year. Earnings per share came in at $3.98, compared to analysts’ consensus of $3.70, according to data compiled by Refinitiv.
Richard Galanti, Costco’s Chief Financial Officer, attributed the solid growth to “continued strength in traffic, robust renewal rates for memberships, and steady demand across key product categories.” He noted that international stores and e-commerce initiatives were particularly strong contributors.
Key Growth Drivers: Memberships and International Expansion
Membership fees, a cornerstone of Costco’s business model, surged 7.6% to $1.35 billion in Q3. The retailer raised its annual membership fee in April 2025 by $5 for Gold Star and $10 for Executive members—the first increase since 2017. The company reported renewal rates of around 93% in the U.S. and Canada, and 90% globally, indicating strong member loyalty.
Internationally, sales grew at double-digit rates, with standout performances in Asia and Australia. “Markets like Japan and South Korea saw impressive gains, with double-digit comparable sales growth,” Galanti said during the earnings call.
E-Commerce and Consumer Spending Trends Fuel Sales
Costco’s e-commerce division jumped nearly 18%, led by strong grocery sales, home goods, and electronics. With inflation moderating, more middle-income shoppers are turning to warehouse clubs to stretch their budgets. “We’re a go-to for value-oriented consumers, especially as economic uncertainty lingers,” Galanti observed.
Same-store sales, a critical retail metric, increased 6.6% (excluding gasoline and foreign exchange impacts). Analysts say Costco’s value proposition and in-house Kirkland Signature brand are powerful draws as shoppers remain cautious post-pandemic.
Challenges and Outlook: Managing Costs, Navigating Competition
Although Costco’s gross margins rose slightly, the company noted ongoing pressure from higher labor and supply chain expenses. Galanti expressed confidence in Costco’s efficiency and scale: “We continue to invest in price, streamlining operations, and automation to preserve our low-cost edge.”
Looking ahead to the remainder of 2025, Costco plans to open up to 25 new warehouses, including locations in China and Spain, part of an aggressive international growth strategy. “We see robust demand for new clubs and remain focused on global expansion,” Galanti stated.
Wall Street remains optimistic. “Costco’s results highlight its ability to outperform peers in challenging times,” said Edward Jones analyst Brian Yarbrough in a note to clients. “Membership gains and solid traffic trends suggest continued strength.”
Costco’s Commitment to Value and Customer Loyalty
Amid ongoing shifts in consumer behavior, Costco’s commitment to low prices and value remains its core strategy. “We’re focused on giving members the quality and savings they expect,” CEO Ron Vachris told analysts.
Industry observers say the crowded warehouse club space frames Costco’s ongoing success as extraordinary. Rival Walmart’s Sam’s Club and BJ’s Wholesale are also reporting solid growth, but Costco’s scale and member loyalty set it apart.
Costco Stays Ahead in a Volatile Retail Landscape
With another impressive quarter behind it, Costco is reinforcing its status as a retail powerhouse. The company’s focus on membership growth, international expansion, and value-driven offerings are key drivers of its continued success, even as competition intensifies and the post-pandemic consumer landscape evolves.
Sources Used:
- CNBC: Costco Q3 2025 Earnings Report
- Company earnings release and earnings call transcript
- Refinitiv analyst data
- Edward Jones analyst commentary
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