Costco's 2025 10-K: Analyzing Strong Sales and Membership Growth

Costco Wholesale has just released its annual 10-K report for the fiscal year ending August 31, 2025, and it offers a detailed look at the retail giant's financial health. For anyone interested in the state of retail and consumer spending, this document is a treasure trove of information. Let's break down the key numbers to understand how Costco performed over the past year. You can read the complete filing on the SEC's website.

Strong Sales and Growing Membership

Costco's primary engine—selling goods in bulk—continues to fire on all cylinders. The company reported net sales of $269.9 billion, an impressive 8% increase from the $249.6 billion reported in 2024.

This growth wasn't just from opening new stores. A key metric for retailers is comparable sales, which measures sales growth at warehouses open for at least a year. Costco saw a 6% increase in comparable sales, indicating healthy demand from its existing customer base.

Even more crucial to Costco's business model is its membership fee revenue. This high-margin income stream grew by 10% to reach $5.3 billion. The number of paid members rose to 81 million from 76.2 million the prior year, a strong signal of customer loyalty and brand strength. Notably, the count of higher-tier Executive members, who typically spend more, grew to 38.7 million.

A Visual Look at Profitability

To understand how Costco's revenue translates into profit, the following flow diagram visualizes the company's income statement, from total revenue down to net income.

The company managed to improve its gross margin—the profit it makes on merchandise sold before accounting for operating expenses. The gross margin percentage rose by 20 basis points (or 0.20%) to 11.12%. While seemingly small, this improvement is significant at Costco's scale.

However, growth comes with costs. Selling, General, and Administrative (SG&A) expenses, which include everything from employee wages to marketing, increased to 9.25% of net sales, up from 9.14% in 2024. This suggests that while Costco is selling more and earning slightly more per sale, the costs of running the business are also creeping up. The final result was a net income of $8.1 billion, a solid increase from last year's $7.4 billion.

Global Operations and E-Commerce

Costco's growth was broad-based across its geographic segments.

• United States: Net sales grew by 9%.
• Canada: Net sales increased by 6%.
• Other International: Net sales saw an 8% rise.

The company continued its physical expansion, ending the year with 914 warehouses worldwide. On the digital front, its e-commerce business posted a strong 16% increase in comparable sales, demonstrating that its investment in a relevant online experience is paying off.

The Bottom Line

Costco's 2025 fiscal year was marked by robust growth in both revenue and its loyal membership base. The company successfully expanded its margins, though this was partially offset by rising operational costs—a common challenge in the current economic environment.

Operating in a fiercely competitive retail sector, Costco's unique membership model and strong brand recognition remain powerful assets. As it continues to expand its physical and digital footprint, its ability to manage expenses while delivering value to its members will be the key to sustaining this impressive momentum.