Costco Wholesale Corporation (NASDAQ: COST) delivered an impressive performance in the first half of 2025, catalyzed by recent fee hikes due to the recent increase in membership renewal rates and fee revenue. The company is actively expanding its store network, with a total of 28 store openings planned for fiscal year 2025.
The market is closely monitoring the warehouse giant’s upcoming revenue report, looking for insight into the impact of new tariffs on the business and the broader industry. The company plans to report its third quarter results on Thursday, May 29th at 4:15pm ET. It is estimated that third quarter revenues rose 12% year-on-year to $4.23 per share. Analysts’ positive revenue outlook reflects an estimated 7.8% increase in revenue to $63.1 billion.
In blues
After a steady increase early in the year, Costco stocks set new records in mid-February, but have since reversed the course and slid to four-month lows. However, stocks have recently regained strength and are approaching previous highs. In 2025, expenses have so far increased by around 10%, trading above $1,000 this week. Costco’s continued control of the warehouse retail market was demonstrated by a 93% membership renewal rate in the US and Canada in the last quarter, highlighting customer loyalty. This competitive advantage, strengthened by consistent revenue growth and profitability, enhances its appeal as an investment option.
Costco CEO Ron Vachris said in his second quarter revenue call. “As we aim for the remainder of this fiscal year, headwinds from the look of forex could continue. Given the events of last week, it is difficult to predict the impact of tariffs, but our team is to minimize the impact of increased costs associated with members.
Revenue Mistakes
Costco’s equivalent store sales rose 6.8% year-on-year in the second quarter of 2025, while e-commerce sales rose 21%. Second quarter revenues rose to $63.7 billion, exceeding estimates, from $58.4 billion in the previous year’s quarter. Net income rose from $1.74 billion or $3.92 per share in the second quarter to $1.7 billion or $4.02 per share in the second quarter. After consistently breaking six quarter estimates, bottom line performance didn’t meet expectations.
The company’s pricing strategy and product mix adjustments allow us to navigate changing consumer habits and macroeconomic headwinds. Over the next few years, it could potentially lead to sustained growth across key metrics such as sales, revenue and cash flow.
The disaster of tariffs
Membership revenues are rising, but the company expects pressure from adverse exchange rates. Also, a third of the items sold in Costco stores are imported, with about half of them coming from Canada and Mexico, facing headwinds from new import duties.
After recovering from last month’s low, Costco stocks have mostly traded above the 52-week average. On Friday, the stock traded slightly lower in early trading.
