Costco tops estimates; eyes 28 new openings, with 30-plus in ‘coming years’
Costco Wholesale Corp. maintained momentum during its holiday quarter with better-than-expected earnings and sales fueled by strong consumer demand in-store and online.
On the company’s earnings call, executives said Costco expects to have 28 net new openings in its current fiscal year, and is targeting 30-plus new opening annually in the “coming years.”
Capital expenditures are expected to reach $6.5 billion for the year as the company continues to invest in “building a larger pipeline of new warehouses, remodeling our existing warehouses to drive continues growth in high-volume buildings, expanding our depot network to support operations and enhancing the member digital experience, CFO Gary Millerchip said on the call.
On the subject of tariffs, CEO Ron Vachris said on the call that their impact “remains extremely fluid” in the wake of the new global tariffs imposed by President Trump after the tariffs he imposed under the International Emergency Economic Powers Act were overturned by the Supreme Court.
He noted that it is not yet clear what the process for refunds from the IEEPA tariffs would be and what, if any, refunds would be received and when it would happen. (Costco was among more than 1,000 businesses that sued the government for a refund of tariff costs, saying President Trump lacked legal authority to impose tariffs under the 1977 International Emergency Economic Powers Act.)
“As we’ve done in the past, when legal challenges have recovered charges passed on in some form to our member, our commitment will be to find the best way to return this value to our members through lower prices and better values,” Vachris told analysts. “We’ll be transparent in how we plan to do this, if and when we receive any refunds.”
The company had cut prices on select items such as textiles, bedding and cookware after tariffs were reduced on countries, including China, following the Supreme Court decision.
Net income was $2.04 billion, or $4.58 per diluted share, for the quarter ended Feb. 15, compared to $1,79 billion, million, or $4.02 per diluted share, for the year-ago period.
Net sales rose 9.1% to $68.24 billion. Total company comparable sales increased 7.4%. U.S. comps rose 5.9%, and Canada comps were up 10.1%. Other international comps increased 13%. Digitally enabled comps rose 22.6%.
Excluding the impacts from changes in gasoline prices and foreign exchange, total company comparable sales rose 6.7%. U.S. comps rose 6.4%, while Canada comps rose 7.6%. Other international comps increased 7.1%.
Costco currently operates 924 warehouses, including 634 in the United States and Puerto Rico, 114 in Canada, 42 in Mexico, 37 in Japan, 29 in the United Kingdom, 20 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, three in France, two in Sweden, and one each in Iceland, and New Zealand. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
