Company: COST
Filing Date: 2025-10-08
Form Type: 10-K
Source: 0000909832-25-000101
Chunk: 53

Company: COSTCO WHOLESALE CORP /NEW
Filing Date: 2025-10-08
Form: 10-K
Item: Item 7
Chunk 53
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202520242023SG&A expenses$24,966$22,810$21,590SG&A expenses as a percentage of net sales9.25 %9.14 %9.08 %

SG&A expenses as a percentage of net sales increased 11 basis points. SG&A expenses as a percentage of net sales excluding the impact of gasoline price deflation was 9.17%, an increase of three basis points. The comparison to last year was negatively impacted by three basis points due to warehouse operations and other businesses. Changes in foreign currencies relative to the U.S. dollar decreased SG&A expenses by approximately $127, attributable to our Canadian and Other International operations.

Interest Expense

202520242023Interest expense$154 $169 $160 

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Interest expense is primarily related to Senior Notes and financing leases. The decrease was primarily due to repayment of the 2.750% Senior Notes in May 2024. For more information on our debt arrangements, refer to the consolidated financial statements included in Item 8 of this Report.

Interest Income and Other, Net

202520242023Interest income$469 $533 $470 Foreign-currency transaction gains, net84 26 29 Other, net36 65 34 Interest income and other, net$589 $624 $533 

The decrease in interest income in 2025 was due to lower interest rates, partially offset by higher cash balances. Foreign-currency transaction gains, net, include revaluation or settlement of monetary assets and liabilities, and mark-to-market adjustments for forward foreign-exchange contracts. See Derivatives and Foreign-Currency sections in Note 1 to the consolidated financial statements included in Item 8 of this Report.

Provision for Income Taxes

202520242023Provision for income taxes$2,719 $2,373 $2,195 Effective tax rate25.1 %24.4 %25.9 %

The effective tax rate for 2025 was favorably impacted by discrete tax benefits of $100 related to stock compensation.

The effective tax rate for 2024 was favorably impacted by discrete tax benefits of $94 related to the portion of the special cash dividend payable through our 401(k) plan, a net non-recurring tax benefit of $63 related to a transfer pricing settlement and certain true-ups of tax reserves, and $45 related to stock compensation.

The Organization of Economic Cooperation and Development (OECD) introduced a framework