Costco's stock rose 3% after reporting fiscal Q3 2025 earnings of $4.28 per share and sales of $63.2 billion, exceeding analyst expectations of $4.23 per share and $63.1 billion, respectively. Sales grew 8%, with total revenue, including membership fees, also up 8%; operating income increased 14% due to merchandise costs rising less than sales growth, and free cash flow increased 13% year-to-date to $5.9 billion. Despite the positive results, concerns remain about the stock's valuation, trading at 66.6 times trailing free cash flow and 60.4 times trailing earnings.
Costco Wholesale (COST) reported strong fiscal third-quarter 2025 results, with earnings per share of $4.28 and sales of $63.2 billion, surpassing analyst forecasts and prompting a 3% increase in its stock price. The company demonstrated solid top-line performance, as total revenue, inclusive of $1.2 billion in membership fees, grew by 8% year-over-year. Notably, operating income surged by 14%, a result of merchandise costs rising less than 7.5%, which successfully mitigated the impact of selling, general, and administrative (SG&A) expenses that grew by over 10% and outpaced sales growth. Per-share profit increased by 13%, and free cash flow (FCF) for the fiscal year-to-date also expanded by 13% to $5.9 billion, exceeding the $5.5 billion in reported earnings for the same nine-month period. However, valuation remains a significant consideration; looking at the past twelve months, FCF of $6.9 billion trailed net income of $7.6 billion, and the stock is currently valued at a demanding 66.6 times trailing FCF and 60.4 times trailing earnings, raising questions about its price relative to its mid-teens growth rate.
AI-powered research, real-time alerts, and portfolio analytics for institutional investors.
Request a DemoOverall Sentiment
moderately positive
Sentiment Score
0.60
Ticker Sentiment
