Costco Whsl Corp New — Income Statement, Cash Flows & Balance Sheet
Is Costco profitable?
Costco continues to grow revenue and net income at a healthy clip, with no significant one-time items distorting the picture.
| Metric | FY2024 | FY2025 | Change |
|---|---|---|---|
| Total revenue | $254,453M | $275,235M | +8.2% |
| Membership fees | $4,828M | $5,323M | +10.3% |
| Operating income | $9,285M | $10,383M | +11.8% |
| Net income | $7,367M | $8,099M | +9.9% |
| Diluted EPS | $16.56 | $18.21 | +10.0% |
| Effective tax rate | 24.4% | 25.1% | +0.7 pts |
Revenue growth was broad-based, and membership fee income — Costco's high-margin recurring revenue — grew even faster than merchandise sales. There were no major one-time charges; a small LIFO inventory adjustment of $142M was recorded due to higher merchandise costs but had a negligible effect on the overall picture.
Where does Costco's revenue come from?
The U.S. is Costco's dominant profit engine, but all three geographic segments are growing steadily.
| Segment | FY2024 Revenue | FY2025 Revenue | FY2024 Op. Income | FY2025 Op. Income | Op. Income Change |
|---|---|---|---|---|---|
| United States | $184,143M | $200,046M | $6,217M | $6,878M | +10.6% |
| Canada | $34,874M | $36,923M | $1,648M | $1,849M | +12.2% |
| Other International | $35,436M | $38,266M | $1,420M | $1,656M | +16.6% |
The U.S. generates the majority of operating profit, but the international segments are growing faster on a percentage basis. Within merchandise, Foods and Sundries is the largest category, and all four product groupings posted year-over-year gains.
Does Costco generate cash?
Costco is a strong cash generator, and free cash flow (operating cash minus capital spending) grew meaningfully this year.
| Metric | FY2024 | FY2025 | Change |
|---|---|---|---|
| Operating cash flow | $11,339M | $13,335M | +17.6% |
| Capital expenditures | $(4,710M) | $(5,498M) | +16.7% |
| Free cash flow (GAAP) | $6,629M | $7,837M | +18.2% |
| Share repurchases | $(700M) | $(903M) | +29.0% |
| Dividends paid | $(9,041M) | $(2,183M) | -75.9% |
Operating cash flow jumped sharply, helped by inventory coming down slightly and accounts payable holding steady. The large drop in dividends paid is not a sign of weakness — FY2024 included a one-time special dividend of roughly $6.7 billion. Capital expenditure is rising as Costco continues expanding its warehouse network, ending the year with 914 locations.
How strong is Costco's balance sheet?
Costco ended the year with significantly more cash on hand and a manageable, fixed-rate debt load.
| Metric | FY2024 | FY2025 | Change |
|---|---|---|---|
| Cash & equivalents | $9,906M | $14,161M | +42.9% |
| Long-term debt | $5,794M | $5,713M | -1.4% |
| Total equity | $23,622M | $29,164M | +23.5% |
| Deferred membership fees | $2,501M | $2,854M | +14.1% |
The cash balance grew substantially — a direct result of strong earnings and the absence of the large special dividend paid in FY2024. Long-term debt is modest relative to the company's earnings power, carries fixed interest rates well below current market rates, and has no maturities until 2027. Rising deferred membership fees reflect healthy membership growth and are effectively an interest-free loan from members to the business.