Costco Wholesale (COST) 12 Dec 242025 Q1 Earnings call transcript

Good afternoon, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Costco Wholesale Corporation First Quarter Fiscal 2025 Conference Call. [Operator Instructions]

And I would now like to turn the conference over to Gary Millerchip, Chief Financial Officer.

begin. may You

the statements. and risks XXXX everyone, indicated differ reminding such for Costco's actual XXXX. and/or statements joining that Litigation results Private Good Act events, uncertainties Reform Call. thank from that I'd materially by Quarter of within forward-looking include Earnings discussions statements by to of like First those the these Securities involve afternoon, These will you meaning and to performance you cause start may

The include, call to, well the from uncertainties and risks outlined as those time SEC. statements to identified limited and reports not are but the filed risks in in as today's public time with company's other

not only statements statements, accordance as are by Comparable foreign as not a in these of law. supplemental in speak required for company intended GAAP. except sales and prices and made, changes and exchange, impacts Forward-looking from does are presented excluding with to as net comparable undertake gasoline sales, sales they update date are the and substitute the information

I'm dive quarter, results over today's I'll Ron hand into financial opening say is some to us comments. for for our call. now Ron the for to we joining that Before Vachris delighted

Gary, us good you you, and for everyone, today. thank Thank and afternoon, joining

the of new As of were make last in X we spoke we fiscal a 'XX, of some which and included U.S. buildings, resulted wrap me opened the up the of X X we warehouses. highlights since This in quarter the XXXX, few first on let fiscal first net X outside quarter relocation In of brief new comments September.

million Thanksgiving, California. sales on our had quarter, highest-ever That we $X.X U.S. opened that Pleasanton, day warehouse Additionally, after XXXth day. the end the a at opening the the warehouse opening in for day of before

U.S. of but few some We our warehouses detailed our be the during to a buildings. be to of outside Gary and more of project in will those Ten XX fiscal review across fun will net moments, relocations business. a X I to XX will regarding openings the speak 'XX, growth wanted which year facts so of new continue results share

division prior the In whole food was bakery XX%. a Day, XXX,XXX Thanksgiving. reached an we of That our being days courts X U.S. has new X.X new record sold of to on pies sold. U.S. million pizzas Our Halloween records increase set being of

volume e-commerce Costco Our U.S. has pharmacy growth to records that Logistics. first by exceeding business And we gain business. big-and-bulky for new fulfilled quarter, our XX% with share prescription the continue lastly, setting for market

and majority Costco million nearly last these in Logistics alone. as in completed the their X deliveries online. X ordering members was days from QX of were merchandise completed well. record new The week over That deliveries XXX,XXX a deliveries

during our These to our strength done world. our over by business for the the of our and their these results outstanding all commitment the of especially year a All this of people year. experience reflection to the continued work for our great our busiest the Their thank truly Costco is inspiring. like XXX,XXX I'd around reflect offering. membership of of are and members time milestones across outstanding work the employees company

a available a you annual towards Shareholders that our we our objectives, the wanted online mention progress Meeting made the to look. would and are all review was January, take of I update I commitments to in just This comprehensive Annual sustainability making today. As approach encourage also our Costco provides of we to sustainability report

questions. to you. turn to I'll Thank to that, the of quarter, jump the results it Q&A field on over back With discuss I'll back and Gary some during

results release, fiscal ended XXXX, XX. of the XX press today's Ron. Thanks, reported November the weeks quarter In for operating we first

Presentations and slide deck a under Events to support supplemental with again have We press published our site information once release. today's on investor

find you of results. as might walk I to have through it our front You in presentation this helpful

in or share first diluted in a year's $X.XX quarter billion tax benefit results last compensation, per diluted included for the related Net first compensation. the to came a diluted $X.XXX $X.XX income of year's $X.XX benefit share or $XXX year. $XX billion stock-based included share, last at also quarter million related from or This $X.XXX per per million results stock-based and $X.XX up or to tax diluted of share, per

X.X% earnings per Excluding X.X%, tax net items, these discrete grew respectively. and diluted and income share

Net the increase were X.X% deflation. for up X.X% sales other X.X% adjusted all last of or sales X.X% to sales U.S. billion, sales quarter up $XX.XX in international gas adjusted were up X.X% first deflation gas comparable X.X% $XX.XX of or for or comp or first an sales were year. the FX. total excluding This adjusted. quarter from was And billion company comp gas deflation X.X% X.X% comp X.X% and led and FX. for Canada

up FX. were sales adjusted for XX.X% or Finally, XX% e-commerce comp

approximately foreign or sales QX the Traffic dollar U.S. the increased negatively while in In approximately and frequency sales negatively deflation X.X% terms metrics, sales worldwide relative comp shopping impacted currencies of by X.X%. impacted price to X.X%, by U.S. gas X.X%

U.S. and transaction ticket in items, ticket been includes FX. have up Adjusted and up from the or and X.X% worldwide headwinds average U.S. the gas in was Our X.X% up would for X.X% the worldwide This X% deflation those

growth of membership than have yet fee the FX. represented Remember due impact fee recent the reported Moving fee to much X.X%, deferred fee fee also income. quarter. statement Membership income growth of of year-over-year. increase of the or membership the effects to million less an that down X.X% We and excluding the in membership doesn't was X% $X.XXX increase income $XX accounting income billion,

X.X% XX.X%, U.S. end, U.S. down renewal rate In and our at renewal down X.X% due terms XX.X%, also in primarily Canada to of was Canada. worldwide rate rates, QX the from and The end. at QX came

mix growth this to a membership but renew of our at mentioned renewal renewal effect seeing likely have a whole. which rate remainder rates shift than our on sign-ups, earnings some slightly the a call, as continued our for impact rates XXXX. lower in on As last quarterly growth is rate higher renewal digital we from the published Underlying are base remain strong, and

ended QX XX.X% paid cardholders, now versus Executive had with up X.X% At up paid XX.X% million of versus up end, last members represent year, X.X% XX.X We year-over-year. million X.X% sales. members, million And we Members Memberships, household XXX.X and and QX XX.X Executive year. worldwide paid of last

to gross margin. Turning

in basis by without driven was points basis higher This our points mix program. basis compared margin first by rate reported up higher XX.XX% was points XX points, by deflation. at quarter card deflation. XX.XX% Our basis co-brand last Core to was coming year the XX gas X and by gas year-over-year excluding XX and and higher in credit

higher core XX ex of gross offset year deflation. by by sales, million e-commerce. X We LIFO million this X basis or This and gas lower terms basis our deflation. largely other businesses year. gas, was gas decrease margins partially QX without $XX X X% basis credit by core-on-core a to QX had points flat due points own their last reward lower And was In $XX better in basis in were points. basis compared points for year-over-year credit to margin a LIFO was or and lower was the by by Ancillary margins on points XX quarter.

Moving on SG&A. to

adjusted the Our XX component last headwind to by at by basis in for into gas went XX flat July in SG&A points by X leverage basis deflation. X.XX% worse year's points, was the effect gas basis compared higher employee SG&A drove or coming and sales in deflation. and SG&A was offset quarter, reported rate gains. Higher excluding points, year-over-year wages was The the productivity that X.XX%. higher of quarter for higher first operations partially

will focus improving and driving to line on in As our employees to sales productivity investing part our of the continue a mitigate always, costs. key and remains incremental top strategy, we

income last or deflation. interest and versus $XX Central year, the and was by basis points interest better basis Stock points, $XXX lower with versus was X points X points expense higher basis and basis preopening compensation and lower deflation. was by income And worse points without both last better Below gas basis X or million year. X without million gas costs were gas was $XX or million by deflation. $XX X without operating million line,

our income headwind lower interest FX in rates. income headwinds cash we FX. in year. will continue this This saw faced subsequent was negatively and dividend gain other the the compare in interest QX. QX year offset primarily gain lower was in due versus our a As to to to quarter mentioned to million earnings, year-over-year special million balances in $XX quarter of QX This impact due much January interest in XXXX and the in gain $X a last and

last year. our was taxes, income XX% to QX compared XX.X% QX rate terms In in in of tax

our As rate Adjusted have from discrete related mentioned item annual been earlier, vesting. would rate this $XXX quarter tax for benefit, year's the this a RSU XX.X%. for benefited million the to

up to now Taking openings, key Turning billion. the single deeper Meat department. $X.XX the in look We strength into billion. estimate up continued earlier QX and new quarter. double capital $X for Ron of was merchandising for led some fresh approximately warehouse high sales, CapEx full note sales was about the and QX in a be will our approximately with momentum digits. talked expenditure comparable the across with core way digits items year demonstrated

cost and per others premium who are options. pound continuing who have lower are cut gravitating members We high-ticket towards to more selections purchase

always, fresh. focus delivering quality we our and As in remains exceptional value item across on sell every

high some impact calendar was shift. nonfood digits single up also Our despite the category from

furnishings, health and and great double all bring As values. our new to at exciting up continue buyers gift digits. luggage, goods, home and beauty sporting items jewelry, hardware Golden were aids, cards, in kiosk

Springfree This range add including of brands broad quarter, new Trampolines several categories, a we and to across Ruggable. Peloton, able high-quality Wrangler, were

Food and food frozen leading sundries way. and had our with departments the cooler mid-single-digit comps

see Sona a Kirkland Rice Pork new beef Synear business food as Pot to Soup sliced rolls. with a chuck exciting continues whole. strong to continue faster Hot at Dumplings, pace grow items as We and and Signature international such our momentum than Masoori

be lower the Our do we first the prices opportunities where to see goal is always to so. to

reduced examples Sauvignon Kirkland $X.XX Kirkland Signature And $X.XX. Peanut just a $X.XX; Stock Chicken include Organic Butter $X.XX $X.XX; this to few Signature from and to $XX.XX Kirkland quarter from from to Signature Blanc

to Storage Kirkland are Signature. the alternatives. value Most we Our innovation this new and both Oxi introduced offering national Powder driving also Signature with Food brand quarter, notably Kirkland significant Kirkland Signature Bags, merchants

pharmacy had Within businesses, the sales growth. strongest ancillary

technology make better prescription Our focus to the use to delivery introduction it low in our stay stock prescription continues also OTC Recent include examples for prescriptions pharmacy. prices members via Instacart. keeping our of inventory easier on while new enabling be software and and to management leveraging to of

and car fun way facts our shop another services. attractive sold of well departments price year, include to offer low highly due value deliver rentals, flights with being business. optical a U.S. membership digits and to court these in a digits. double continue Costco couple We And low as Costco negative resonate extra travel-related Travel wide quarter. to in of food packages, is vacation addition down enough well our services the range hotels, were other to Costco. A every fill booking also Costco rates, performed gallon offerings members. sales with we rental the Last for of parking we Our average Gas per X.Xx. cruises, many unique and about value, Travel double card cars spot our

demand, merchandise. generally product Galapagos much on port do pre-COVID product been The to to last Lauderdale generally for have a Owner's booking quarter the avian spend cruise overall Members and delivery cruise In by recent members a the Coast good. and and largest booking core the $XX,XXX. use spike cabin Food spending and were time that and around-the-world and been value and more on of this a included sundries making the on-time great offer was items approximately remains in flat Fort places shop members values fresh Island. impacted also Costco The are supply foods of the by in while was a shipboard XXX-day our and water. $XXX,XXX $XX,XXX and not essentially shipping and East cruises, who again supply X as the stops price Travel deflation paper egg from credit and strikes predictability in was negatively like worth slightly use total once in starting water all as Easter services. Inflation has year these card levels on in added twice Suite led inflationary Costco below was supplies the nonfoods. influenza offset chain, across We

well Our and merchants inventory we in great this have the adapted holidays. to position for with a are change,

East the our monitor to continue we in and merchants Coast, are necessary strikes QX, for to port we plans into in for ensure stock head members. we potential remain adopting Canada, As India, our and as

Turning to and digital e-commerce.

warehouse map made with the to technology via like to ability make experience Costco the are the and road progress member well. We resonating our continue inventory check to enhancements app

app and average growth. times of quarter, to the million U.S. up X.X downloads rates strong order traffic, were sales helping downloaded bringing to drive Our all another conversion XX comparable year-over-year, million. approximately in was total quarter E-commerce value

in was e-commerce sales, all and hardware, volume tailwind sporting gift goods, furnishings While strength to digits a home grew meaningful double year-over-year. cards,

Ron to with earlier, big-and-bulky record Friday, the early retail this driving also on period. In in the continue curated sales media, media. Costco use brief we our a a marketplace future. and As opportunity items. we quarter, represents To Cyber growth significant Logistics innings Next, a the achieved Monday mentioned very sales provide in And baseball another believe closing, but analogy, are great in Costco Thanksgiving, had me over much retail update growth let Black

targeted This media completed CPG highlighting create return members ad The value suppliers. our the third-party Xx through campaign to quarter, on with of campaign we our typically partners. and can the we our for X expected, channels one first media spend achieved largest

the Wednesday, January our results close. the retail now eager questions. sales finally, campaigns. And December market team weeks for upcoming X, line X, who concludes now up is we remarks, ending XX terms after with offsite are and in releases, media X we'll working Sunday, our of wave participate next over our in for Our on announce open suppliers will prepared That of January to

line [Operator your from the And Gutman comes Stanley. Instructions] Simeon question with of first Morgan

bigger Can hear perspective I you the me. clearing can that? the talk some we of a of while, about you apparel, question in inventory, in actually some seasonal of consumer. share you give hope once share then My of with health parts, And your how one categories. us maybe diagnosing couple Can some market sense the ticket? a you're discretionary on

in Simeon. Thanks, maybe thanks and hear so Yes, Yes, well, few we parts. a Sure. question the that you can question. for taking

being all great we're some great finding finding and at health that of as our and merchants digits And gold we're hardware, are jewelry, performance prepared me of cards, our probably as So many last seeing the across gift I a and similar the beauty, we're about doing And our choiceful recent the value categories quarters. comments, than we've of think furnishings, job we we're trends any we've seen in heard I as you dollars. All the on really newness of great the strong think in seeing say with time a really look the that items, said, members seeing What how being few categories. things certainly, like goods, sporting value, that quality and about on home quarter. to lot we're history, seeing quality that is member. the talked now, at up more consumer, spending the are member around of during combination double strength newness important very they're that nonfood that

So we're to long there. that as fact well. are for seeing And as the X think it the are that with mentioned we're sort there our reflects ingredients comes member inflation I pleased key as that of I willing spend as down members those the momentum

would I produce seen strong own seeing little reflected you'd trend the add? a member and bifurcation Ron, even are talked food seeing we that bit beef a overall pound categories from that prior of cuts well. of a And terms as in like in the in about we at price and think of we're a they're with think grocery, anything also more with is lower business. say food away on those quarters home, of we're to certainly we've a premium food per meat sales I member cuts we across where pork what from high-quality are we But seeing, of to have towards selling we've and little think, shift poultry, and well. what seeing that's in our home I that bit items like gravitation

your our retail period they've that guess, before, It's part with a I responded question, very to with calendar appears after sell-through shorter Thanksgiving. buyers have been as another Simeon, strong. Yes. unique a But this and through seasonal time be of properly well. of

be good. very feels to that It foundational seems a So though. Christmas

As lot sporting you see, furniture a driving e-commerce appliances, of hardware. sales, our goods,

And so this trends. people buying but good are just very, very basic year,

our across growing we we're I guess suggest to think, The categories data would see share and tend We I our tend member focus mention how the mentioned. we didn't can Simeon, most that I that that And to on deliver great I do that specifically. of value.

question Chen And of with next TD Oliver comes from the your line Cowen.

to lot. Your a traffic impress continues

are opportunities ticket media, think incrementality think How a about as multi-vendor forward, would that and As you retail opportunity, we as does highlighted mailer? and mix drivers opportunity. look great to intersect is you of your UPT? what Also, that And about with also important be and you your thoughts key great hear. which that huge,

Oliver. Thanks,

those I your and for I What X% the quarter, some And to the that on gasoline, the slightly foreign in exchange see, we the on was items, you end -- frequency with members. items seen were -- we comments that heard the about started we pleased our think when of and turn did the this U.S. quarter, see, for X%, worldwide. adjust basket. when think, on per X% you then up and to positive that adjust shop that over of made nice of the we from at we've have we the we question, continued part probably last traffic been you first of were

making really great in improved we've I by, warehouse well. From being that's exceptionally sure very the merchants, we as and got that great then warehouse think per those product the much offerings our an again, done lot when well the we are a of at think look the a have operators media executing work members it campaigns basket. And I So opportunity. on seen items as our perspective, in momentum some incremental

continue to brand is in from can really that the goal which pricing. of into everyday a Our gives agencies, coming a seeing lot us to a lot an is our national put new a that invest opportunity are media good we getting marketing suppliers is those retail those dollars where to quality to us lot we're confidence marketing return maximize value for interest spend. this the they're tap marketing really make to sure going of ad media to of product the into where and And agencies on dollars

so lot of it's emphasize And would I a again, retail very where seeing with traction, early days media. the we're and

make something on from For model. the really But media us, most of interest is embarking agencies, it's sure that retail journey. offsite we from that way we're us the in the that to we're growth and incrementality is coming for is just driving where really which believe

Horvers question line next from the JPMorgan. your And comes of with Christopher

coming a So consumer you either price, this think margin question, have You category? the about the you above And drove that quarter? performance what's terms or of talk rolling hardware that? electronics? can expected and just going even MFI side in as core-on-core that you reinvestment How can you do through. chain supply Is price reductions define see now maybe down about the beyond the what in of

flat. see part your would been first of Foods in slightly. categories you core-on-core Nonfoods would if have main the the the all, within was slightly, and down fresh foods, and the we terms question, that sort business, first Yes, been break of the of that's have essentially would it you nonfoods. down question. up Thank have fresh I X been of which Sure. margin, think between for

of up were points. X kind those obviously, So overall, X we just -- basis

of puts tremendous key a wasn't would the in overall overall, have and sort been takes really there the change but So they amount of number.

category And goods story. type you power that. then of hardware those It's household the would find storage, really typical batteries, that plumbing, the at hardware a the just of tools, description lighting, is

the on investment process side, there? then And thought your price

continue to history company. that the We're invest done going we've something in That's to for price. the of

start lower certain going vendors Kirkland. be of Kirkland described, it prices we in some our set like some as And items that we're members Signature. to starting but feel and increase, holding to commodities to with asking our are to come may prices. We've in that contribute with with I investing example got leading Gary mean and

opportunities to So those look we're invest and we driving going where keep to sales. at continue can and

next your line comes And question of Zhihan with Ma Bernstein. from the

loyalty Gary, have the the part in And understand media a impact difference contribute way Connect, the online sign-ups. you any I second and to out in do difference to offline retail break you Can renewal marketplace, help will Costco rates behaviors? X-part think, side. question. on growth of you it retail online the in sign-ups from third-party us and then I One, forward? How that media And the or the regard? expect going membership mentioned

the for Yes, sure. Thanks question.

of the the on very back metrics step we're first feeling about membership take overall, all we're just good a So seeing. and underlying that rate, I'd maybe membership

the and membership and activity then So renewal general remains rates very strong. growth sign-up

we're As channel, does because renewing at in being shift in -- digital as the a we that we comment membership is rate digital when historical what new over may when -- of see base really, XX-month years, about out we seen in members channels. And reduction a that we renewal the report have. And through effectively made lag on renewal remarks, few age what you than is mean an with it's that's rate. But that last they're helping acquiring that that I recruited the rates, that well. talk slightly recall of that where average that coming lower a we often, the it members that we've the change we slightly in prepared we're also of through the shift that some seeing members quarter, seeing more that last we're mentioned have

new see membership it impact that digital slight report. affects renewal we And that as and rate that overall member will more and continuing have the forward of we expect slightly a into base we on as look so mix, trend that it we the build

gave look good sort members, continued us but becomes make of to from in sure to visibility that. to a in flow-through the renewal able for growth individual into So impact rate, ability as cohorts are we wanted When that to we digital going we drive continue the see be at of about you it we to members. through we improvement feel

And then this question This exclusive on Costco buyers is members. exclusive is It's an fully has by member-only is so but Costco marketplace. on our buyers curated everything that Ron, been Next the is Costco our marketplace. site that's Costco Next. reviewed our by to

with think to just going give we have So members enhance options more the their it's shopping we relationship needs. our and for

Got it.

the Just side. the media wondering more number to going were whether if there's that's clarify, implications to marketplace using I on have -- and you vendors XP any service was retail

and again, benefits And early we're to in our at the we mentioned look as we're going members. where Gary stages, will that, earlier, to very feel the be

yet. that to determined be So is

of from Karen with your Melius comes Research. question line the Short And next

on that want level. manager And to below do stock buy question to that's the I'm is kind that curious, to is is for little just this been a for I I out what splits there's know a maybe field your And left of kind -- thoughts generally. retail unrelated of employees of opportunity an second on that some tariffs. could and philosophy stock thoughts inflation? just you Any know store have on wondering what in because the but your trend

it's split, discuss this that And there stock Yes, evaluate for done past. we'll stock something the Board isn't but has the Thanks, splits that in Costco you're plan a and aware stock Karen. continue our probably time split. with at a on to

buy little benefit showing shares. But affordable that we stock arguments investors is the the economic I us. very our less it about now think employees ability retail because fractional us, of retail clear there's the for think and important also to both a employees past feeling we the have are that investors are the we're recognize for constituents way more do who and for a bit

think part was And the time. second tariffs? continue over I of So to question evaluate the we'll then on

Yes.

changes. all, that, from think I say view, the tariffs scope first of Yes, a of there's would lot of is what of around and point uncertainty a timing I

And will So as it what with in that my makes merchants impact on say we believe is, tariffs tariffs confidence. of general, I past, sort our that being course, predecessor, it work faced and the and rains, difficult to Richard. something positive for so that's costs the He'd to and be that it "When predict think said, of and we are in And us, that general. With I'll manage for buyers equipped, it see everybody." raise we in a situation. not anyone through anybody quote rains as navigate

different would the I actually water if then where We us, locations strikes on the sort vendors course, the in nonfoods the that of the where and we the SKU, also that's in have we've as guess we and of in done the look a a of wasn't which warehouse. I risk is time well. We'll, item done the of string and consider in individual as our final and ways value if inventory try make a in where that's value much practical sort SKU work alternative past already well. felt pivot for to that plan around because could be looking over didn't time product see then we for of we to in an item always just can to bow we to the of is sure we're mitigate our of member for we've spends X/X affected, and also to amount subset the more typically, us imported. context about shipping different guess the sourcing business a seen we'll was of the and effective this forward there, to business past move cost. for And predictability is of it buying, of can pull we because have we how our where some the less with

it's remember, smaller as for So then actually we overall a a of import business that minority and part just of context. our well it's

Fargo. comes line question next with your the Wells of from And Kelly Edward

you moat, of thinking or back the changes CapEx? outlook CapEx. And inching of meaningful ask a of growing step over But for in about couple you your CapEx anything of about pipeline different last the from are the taking the priority Any the to as sort thinking evolution wanted how business, ahead? years. a has I of about and this, been standpoint? goals, kind project up your part

I really Ed. wouldn't major change. any Yes. Thanks, say there's

bit new mentioned, last and of the of depots reflection and those in and indicate I our of over mentioned, you warehouses, support gradually we've investing in strategy on costs in that both capital expenditure, there years. in sort chain focus at on have, to of new have that continued capabilities capability technology in on major warehouses this And platforms there any executing the of right change we But focus think supply continuing we've as we -- maintain updating just is to in increasing invest point range, And some to then and philosophically, investments. course, in of It's more strategy. we XX also, few fleet a the XX the trajectory. digitally. business our the the and continuation as had technology the I there's the invest to build course, warehouses our modernize I to quality growth growth more that of wouldn't #X, the we a as job of As growth well been support the opened little a look more growth as been seen to inflation in future. But sort

line And Heinbockel of your next comes the John with question from Guggenheim.

increase, does about things. what may quick then publicity. invest like? product that International things they how I'm Club relative things Where it's but IT lot think particular in look do investments right, of get a is today? But that pipeline control And where think to of over the when sites, a to there's reinvesting other you MFI Philosophically, in. quality, I XXX, big lot those labor, pipeline Two don't years price? price thinking even price, the is away, -- rank you be

want John. I'll as may first to Ron add well. some jump Thanks, Yes. and in color

the I holistically. membership think the overall, look of we fee at reinvestment

value are lower even employees' inflation of Kirkland innovation mitigate with membership impact can increasing. of as prices, we've is to experience, of maintain products course. as costs for including where done of it Signature. the partly the improve if can Part the where the it's we So is -- in that new if our can well. And how it member investing we through wages It's course, we recently we

So by do we I make our delivering members fee want their greater membership that? how margin for each paying than think we holistically add say, to a the them at for member. a when sure they're meaningful think anything what showing value more paying of you are year, and Ron, we're getting that it value and we to they're that being that about value tend look on

in see been that, you'll the amount to think I have world, of I No, some years for think of continue And see Canada strong that's sure, We Mexico warehouses for opportunities accurate. the over expansion an countries portion next good great around U.S. being of us. opening up equal out and an a XX the those few

We continue Asia opportunities in Europe growth well. to as and both see

other will good a to outline longer a seems So very than at not a quite think those, some on half, projects U.S. come they'll and of these so times. different be I realistic outside ones year the portion of XX of the lot But of take

Parikh next line of Rupesh question Oppenheimer. your And with the comes from

you wanted, your you there any card credit core Gary, to back ex in to go just I and that? XX program. more Is Gary, color of that out comment, terms So up can called were driving basis points, provide gas mix margins co-brand what's and

as Overall, Rupesh. were as it ex at basis you then X. and gas know, up core-on-core points We gross margin look with mentioned came reported Thanks, it, up and X tend where that yes. in. was you deflation, pleased rate to we Sure, was

So signaled the case, months and gas, I Middle so that could think event, was around strange rate. There overall takes that which create and ago largely the potentially margin the some within as things major is The impacted in were cycling results. a margin puts obviously, the were each be we look by were that we number at that. we XX in East was created of the had can often performance a or fact message and stable that, when we offset main that other overall the headwind, gross that volatility,

be So that overall term, the just have margins It quarter unpredictable. wouldn't tends say that more when to the was individual an volatility. long seen, large in headwind. I gas that you unpredictable be we've on

been rate sort that quarter this improvement of what largely the there, was margins the in of have again So biggest then e-commerce as we would headwind. improved offsetting that benefit to And in similar e-commerce last quarter. saw had and quarter, we from the some

progress from from bank then had was pleased call, as co-brand were that program, then in portion benefit we payments the works benefits, offsets. margin. And with as various we there. And members, along look some and the the And at the saw headwind. see gas We mentioned. offset, that to e-commerce and co-brand of of way you to credit saw our we we we the that secondly, are is for as effect you flows receive card of with essentially, all a incentives mix which gross the favorable then credit the and fund and some card we that the couple issuing rewards the continue Essentially, net a benefit the business. we the paid mentioned quarter, So from into mix

we I we're lower the invest even from think slightly, So member. were for takeaways was as but I mentioned, the prices in no gross takes, and that there margin value overall, though deliver continue more to up puts major and pleased

Benedict next with Peter your Baird. the from question And comes of line

to -- maybe the growth want in for I you U.S. Ron, runway the on for

of to of per next years are clubs in new Most be those going XX the handful said U.S. here. You year

right You over guys just are XXX now.

X players, the you and that the maybe in They're particular? X,XXX-plus think about well. keep this Costco you other if for do as in we're confidence in clubs think the include in U.S. maybe industry ability are pace growing at talking the What for growing about your How in to gives club seeing you I U.S. you the the capacity U.S.?

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comes And Evercore your line next ISI. of question from with Greg the Melich

and wanted I where Uber the e-commerce, if us also on start, Could circle on how, I and XX%. on penetration guess to of there Instacart on the the is now we're up you to back getting update growth Eats you what that? add

we Yes. the digital. that growth with for we question. in saw Thanks, Yes, were Greg, pleased the

as as sales some in there remember to we as impact that important timing well. November it's well, release, calendar the shared think of was of I

results. So shared you a I shared -- headwind -- the if XX% team we're our think think the like that in XX% we about, November sales

million impact you take quarter sales as in X/X it have out would wouldn't miles of And about you so X that well. on the that, truly, had with if the our be

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from disclosed business think be of range X% our being of -- part as mix the you to our of digital sales. in of X% the the we sort total business, the publicly If about the would of sort it in numbers that

know, continue. to growth trend to outpace So overall continues it as and expect our we that you

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given eventually great on of that highlighted earlier on us you back maybe with those out label. And and private some items just you've Got could call the then you Could it. update new especially circling penetration, that what in now be? the come

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buyers our we're focusing on of we're operators of some the the that that to success work to the the of and well. some a our fun while area. for of facts the keeping goods it needs members the foods on I just the lower-cost doing and of our be of the focusing several Wagyu really our company, I've and as reflective that member [ what seeing relevance like ] contribute And part point they're fresh that growth some members being -- to court, to for the those proteins would and we're there to got out parts gave pharmacy, was in big food

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with Robby Ohmes next your And line of Bank the comes of question from America.

question. membership are I competitive on calling seeing things you're you guys also, at when with compete maybe up guys a that? And on call competitive So Go all like but & impact does their seems can and pressures It's But to other retain regional out don't you player that or than help are impacts may one competitive fee, Scan -- us, you benefits impacts worth raises that know guys do be seeing end it more any you've sounding headwinds? or and remind like Sam's you any so doing asked it retention rates, the fact you this, with really I well out? been any there

the Thanks Robby. question, Yes. for

we with when opened certainly the numbers. that. new it competitor, does have through it opening of generally call existing honestly. more And as number business. our add open generally, generally on the that, I one. don't biggest we're as mentioned, but we're impact split some be, of results, our moving We warehouses Maybe own Ron some We it for out significant flow trends seeing create time are from approach we warehouses. we that in traffic we incrementality. But That's business our a we would warehouses, because just couple the haven't out cannibalizing would that how own color talked think about I some new some we our

we're we're think significant tailwind with I mentioned great it retail a lot easier for teams the obviously, engage of a mentioned Ron biggest as I prepared experience comments, business from work it quite with competitive would seeing deliver improve briefly now. And and right to the comments value continuing around disruption the out, point think I is member pharmacists, to today. view, our business guess that, I seeing and growth that in prepared our the call my make the business are and in in I pharmacy doing of to our in

I partly doing partly, we're some disruption think in the think as that's industry I is and well. there currently the that work

Scan on Go not remind comments that agenda? be any why us and just & your maybe And might on

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your And with question Lasser UBS. line next the of from comes Michael

the what on lot your of willing Costco? margin from you willing contribution metals you negative expanded these to the traditional Costco from product like drive you, sell profit? is recent offset to aperture And philosophy A, what now B, buy selling items don't impact categories margin where from a the Given sales expecting of from the cards, that or precious more have are and member changed vendors gift to profitability the is have

quality have I years meets great able addition members that that that the the right find think ago, can in and to and quality. such a for many we the to back company something never our have we new value member ensure caskets ago price. you as as business as we're we was years find many is can far deliver had that gasoline a great to way been of we well, deliver And as that and the would go the started great to needs would us, and categories, we thought

think and new keeping can are precious change that areas the for metals finding going at quality that's categories working tickets work new nimble find categories is So I the them continue us. the and that improve members. to great hunt lives see those great to teams value can again, to and Costco treasure our we of I deliver and be hard that of part next coming great the our buying areas members. our But always And by we to was, on

work question, creates you overall. And it's from are that, on and well. mentioned so more in Maybe, Yes. to ability driving traffic merchants, members a significant see point, and a cross-selling the grow creating awareness just give we we also credit, our items. we by I a e-commerce just our We digital proportion metals, high it credit, to bit bit think think Michael, of lot I we Ron, business margin, to but our when of have they're driving them, about as buying something get our to add precious like Ron's that as to business. new think, more website, as do about a things to business great your see our give it's they Not on I exciting the because addition impact necessarily significant

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Grom And question the your next Haskett. Chuck Gordon of comes with line from

to more margin on rebate you Gary, affluent discretionary talk explain was X more of can X% shopper, just about bridge, Ron, higher-income points? your earn neutral. the then business? always on you the right share the basis And can Costco's negative just particularly favorable it's why wallet with Historically, or the side almost

our Sure affluent customers, thing. your we question share Chuck, question what are gaining was? market was is your with that more why

My the earn you right share earned shopper? more do you've question the No. higher-income wallet think to with is,

Absolutely.

do. think I we

in runway and as we for And I we great customer. with I growth think Kirkland great us member to. mixes mean, that quality, that's continue to the that our see is continue future. find and I see to resonate. we brands, Signature, cater our deliver That will we think also who the that We and

Rewards. the to we Chuck, like, second of be up, believe we're speaking, with sure we're quarter of the then, redemption your then And we And amount was. conservative actual make it truing sort so we're the fully for into on the throughout that part that question, X% because think Rewards, going what the the what we each around spend as year, of want of when year, you we're if accrued. And right to first the X% generally accruing is get

quarter the the of this of in of think almost increases I'd saw half So back adjustment the sort offsetting we that last year.

out the there quarter-by-quarter. off spend those but is to say underlying, nets have of kind X% increase you gradual so between in net it And to a

Okay.

a essentially So was it true-up then?

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next Bania with from of BMO your line Capital And the Markets. Kelly comes question

your some if I What pharmacy, learned? you've and of service I to a could you've quite the the What pace And and in guess, base of wondering adding coming had growth growth you just bit little to new Uber Uber do there, like was that you add is the that membership something how among about now what as there. like services with mentioned, Ron general particularly could talk and that's just comps? awareness partnerships Gary, Instacart and you for the your time.

goes at habits. shop, partnerships Yes. guess We've organizations. and great and I looked that changes members frequency strong of will I with the what the were closely behaviors it incrementality shopping to members start up found very both the way with our

brick-and-mortar a I fill-in think between directions. their for an big go or Instacart and use into an they'll those us Uber more Costco shop to shop

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member e-commerce our well. speed improving and and delivery it's there is So to as convenience the time

So very the partnership. happy we're with

organizations, head of both those think our members. and with a service works we very Our it's with merchant great closely

question, to digital very in the first your in overall. pace thing least continues it of only see line the we at guess to so part I grow business And Kelly, that the our with is strongly add,

than growth. higher our Yes, business e-commerce slightly

line the Cerankosky with from of Chuck comes question Northcoast Research. next your And

bit with about the current Teamsters talk please? you the negotiations a Could and little labor relations

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to we Costco care And -- to employees as all we're great do So to are going is employees. as importance we can us. are employees. those of everything our take of They of this these do

And Jefferies. the comes question with your line Corey from of next Tarlowe

little about a I performance multiyear stack saw. decelerated that QX. the on you talk was a bit if versus wondering international could Comps you

prior region, So there's versus call out if changed quarters. just to anything curious, the that by

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expectations see businesses. the seen relative markets we've like those look both sometimes our affect markets, also market then And growth are continue see that momentum there that to share. calendar. continue growth and strong And in to nuances at we've in that, as individual international can own how we grow we with so we the our But internal we the that pleased the in been overall, to

call out being as So I there. nothing would unusual

Your with final Capital. question comes Champine Loop from Laura

output competition? the related to relative digital management online this driving of something in your an joining And attractiveness that, from members of online, senior offer? growth or diagnose are which online your to you're that that look, your who is or is It's just a your follow-up function on grade obviously how a well. feel presence But growing business, is perspective would and

Thanks the Yes. for question.

own our critic. probably we're say I'll again, think, toughest I

at we the the look in years, of and than when think business pace e-commerce sort look U.S. at the I over general. overall at actually we've has in our we grown the XX a business last growth grown faster

recent those one So can app. that We the pleased believe improving made making functionality there's work available we're search never things inventory respect, keep momentum like in the member growth to and higher we've mobile changes experience. that satisfied. better the very through to continuing to the do We And and that We've see engagement. But the and goal seen journey we're more we're with and the of a positively seeing. But foundations members benefit getting commenting changes on know of enhancing keep to are on journey. the certainly sort the building of and member the technology we experience. we're few is been the and that are years, last changes that keep over seeing that we

to that So by more there's growing still And effectively. believe business more even say work do. our work, doing I'd we we we can believe continue digital

realize We're doing that of sure making back-of-the-house is work to opportunities. exactly right. the -- we we at the that add back that, We do point, And end would definitely stability, Gary have continue we some I see improve. to that speed, this the of people made. so in. great Logistics in is will example start all order, the front I on seeing foundational will we've progress is done that. And a work I Costco come side think short But then we build that can think the of can things

now to have which years are weeks. able X would and in us taken made We ago predeploy U.S. a deliveries couple things days, have around of the X

distribution we're as functionalities centers seeing the the We're way go to app that So starting online. up, being usage to coming well. see added

months So -- biggest start of we that seeing behind and it's those start more next to side sign-ups, Executive care forward-facing far the XX at a as get in less membership as higher journey. sign as we We're the of. improvements probably taken our logistics going do with And is we the we basis. Members sort a us renew online, up engagement some that have things difference which e-commerce putting

transaction. And -- have benefits that to big understand they a an don't the to talk is don't And part employee when making of -- of big that they that the that, think and they're part that so all Membership. Executive I

them in with Membership that's thing we first road. down the then that benefits a will engaging on them showing we able work on the Executive there see least member And the to -- as but start is path. of at the those the and we we're capture So later

and you this we call, for gentlemen, participation. your thank and ladies concludes And today's conference

now may disconnect. You