Costco’s fourth-quarter financial results show moderate growth

Costco Wholesale (COST -0.77%)popular magazine club, posted mixed results for the fourth quarter of fiscal year 2024 after the closing bell on September 26. Net sales rose 1% to $78.2 billion – a more impressive result considering this year’s quarter lasted 16 weeks, compared to 17 weeks last year. Net income reached $2.354 billion, or $5.29 per diluted share, up from $4.86 per share a year earlier.

source: Costco.

Costco Wholesale Review

Costco Wholesale operates on a membership model, requiring customers to purchase a membership to shop at its warehouses and online platforms. It operates 861 warehouse stores worldwide and offers high-quality products at low prices, many of them sold under its own Kirkland Signature brand.

For the full fiscal year, net sales increased 5% to $249.6 billion. Net income also increased, reaching $7.367 billion, or $16.56 per diluted share, compared to $6.292 billion, or $14.16 per diluted share, in fiscal 2023.

Notable events

The company’s revenue model continues to expand, particularly its membership program. Membership dues income increased slightly to $1.512 billion from $1.509 billion in the prior-year quarter. For the fiscal year, membership dues totaled $4.828 billion.

Costco’s cost of goods rose to $69.588 billion in the quarter, up from $69.219 billion a year earlier. Additionally, selling, general and administrative (SG&A) expenses increased to $7.067 billion from $6.939 billion.

The company’s e-commerce segment posted solid comparable sales growth of 18.9% for the quarter and 16.1% for the fiscal year. This reflects Costco’s continued success in shifting to digital platforms in line with global shopping trends.

Operating income for the quarter was $3.042 billion, up from $2.781 billion in the prior-year fourth quarter. This improvement signals strong operating performance despite increased expenses.

The company’s international segments also recorded solid growth. Comparable sales in the U.S. increased 5.3% for the quarter and 4.5% for the fiscal year, while Canada recorded growth rates of 5.5% for the quarter and 7.0% for the year. Other international markets grew 5.7% for the quarter and 8.1% for the year.

Looking to the future

Costco management did not provide specific earnings or revenue guidance for the next quarter or fiscal year.

Investors should pay attention to Costco’s ability to manage rising operating costs while improving its online and ancillary business segments. Maintaining operational efficiency and customer satisfaction through the membership model will remain critical to future success.