Company: COST
Filing Date: 2025-12-17
Form Type: 10-Q
Source: 0000909832-25-000169
Chunk: 46

Company: COSTCO WHOLESALE CORP /NEW
Filing Date: 2025-12-17
Form: 10-Q
Item: Item 8
Chunk 46
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 slightly less than half of membership income growth during the first quarter of 2026.

Gross Margin12 Weeks EndedNovember 23,2025November 24,2024Net sales$65,978 $60,985 Less merchandise costs58,510 54,109 Gross margin$7,468 $6,876 Gross margin percentage11.32 %11.28 %

Quarterly Results

Gross margin as a percentage of net sales increased by four basis points, and increased by the same amount when excluding the impact of gasoline price deflation. This increase was positively impacted by seven basis points in our warehouse ancillary and other businesses, primarily due to pharmacy and hearing aids. Gross margin percentage was negatively impacted by three basis points due to a smaller LIFO benefit in the first quarter of 2026 compared to the first quarter of 2025. Margin in our core merchandise categories was flat.

The gross margin in core merchandise categories, when expressed as a percentage of core merchandise sales (rather than total net sales), increased 30 basis points. The increase was across all categories. This measure eliminates the impact of changes in sales penetration and gross margin from our warehouse ancillary and other businesses.

Gross margin percentage on a segment basis, when expressed as a percentage of the segment's own sales and excluding the impact of changes in gasoline prices on net sales (segment gross margin percentage), decreased in our U.S. segment due to a smaller LIFO benefit and core merchandise categories, partially offset by warehouse ancillary and other businesses. Our Canadian segment gross margin percentage increased, primarily due to increases in warehouse ancillary and other businesses. Gross margin increased in our Other International segment, primarily due to increases in warehouse ancillary and other businesses and core merchandise categories.

Selling, General and Administrative Expenses12 Weeks EndedNovember 23,2025November 24,2024SG&A expenses$6,334 $5,846 SG&A expenses as a percentage of net sales9.60 %9.59 %

Quarterly Results

SG&A expenses as a percentage of net sales increased by one basis point, and increased by the same amount when excluding the impact of gasoline price deflation. Compared to last year, results were negatively impacted by four basis points attributable to a charge related to a tax assessment for prior 

21

years, and one basis point from warehouse operations and other businesses. Preopening costs were also higher by one basis point. Central operating costs and stock compensation had favorable impacts of three