Company: COST
Filing Date: 2025-12-17
Form Type: 10-Q
Source: 0000909832-25-000169
Chunk: 26

Company: COSTCO WHOLESALE CORP /NEW
Filing Date: 2025-12-17
Form: 10-Q
Item: Item 1
Chunk 26
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Interest income and other, net$155 $147 

The increase in interest income in the first quarter of 2026 was due to higher cash balances, partially offset by lower interest rates. Foreign-currency transaction gains, net, include mark-to-market adjustments for forward foreign-exchange contracts and revaluation or settlement of monetary assets and liabilities by our Canadian and Other International operations. See Derivatives and Foreign Currency sections in Item 8, Note 1 of our Annual Report on Form 10-K, for the fiscal year ended August 31, 2025.

Provision for Income Taxes 12 Weeks Ended November 23,2025November 24,2024Provision for income taxes$582 $508 Effective tax rate22.5 %22.0 %

The effective tax rate for the first quarter of 2026 and 2025 was favorably impacted by discrete tax benefits of $72 and $100 related to stock compensation.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes our significant sources and uses of cash and cash equivalents:

12 Weeks EndedNovember 23,2025November 24,2024Net cash provided by operating activities$4,688 $3,260 Net cash used in investing activities(1,398)(985)Net cash used in financing activities(1,167)(1,193)

Our primary sources of liquidity are cash flows from operations, cash and cash equivalents, and short-term investments. Cash and cash equivalents and short-term investments were $17,183 and $15,284 at November 23, 2025, and August 31, 2025. Of these balances, unsettled credit and debit card receivables 

22

represented approximately $3,095 and $2,670 at November 23, 2025, and August 31, 2025. These receivables generally settle within four days.

Material contractual obligations arising in the normal course of business primarily consist of purchase obligations, long-term debt and related interest payments, leases, and construction and land purchase obligations. Purchase obligations consist of contracts primarily related to merchandise, equipment, and third-party services, the majority of which are due in the next 12 months. Construction and land-purchase obligations consist of contracts primarily related to the development and opening of new and relocated warehouses, the majority of which (other than leases) are due in the next 12 months.

We believe that our cash and investment positions and operating cash flow, with capacity under existing