Sector: Consumer Staples|Industry: Discount Stores|Market Cap: $439.05B|Employees: 333K
Costco Wholesale Corporation operates membership warehouses in multiple countries, primarily in the U.S. and Canada. The company's core business model focuses on offering low prices on a limited selection of nationally-branded and private-label products, generating high sales volume and rapid inventory turnover. Costco's competitive advantages include its efficient distribution and warehouse facilities, strong member loyalty, and direct relationships with suppliers.
Net sales increased 5% to $249,625 million, driven by an increase in comparable sales and sales at new warehouses opened in 2023 and 2024. This growth exceeded initial projections, indicating strong market demand and successful expansion strategies.
Gross margin percentage increased 35 basis points, primarily due to warehouse ancillary and other businesses, largely e-commerce and gasoline. This improvement offsets the negative impact from increased 2% rewards for Executive members.
SG&A expenses as a percentage of net sales increased six basis points, primarily due to warehouse operations and other businesses, partially offset by sales leverage and improved productivity. This suggests that cost management needs further attention.