Company: COST
Filing Date: 2025-06-05
Form Type: 10-Q
Source: 0000909832-25-000033
Chunk: 69

Company: COSTCO WHOLESALE CORP /NEW
Filing Date: 2025-06-05
Form: 10-Q
Item: Item 2
Chunk 69
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 gross margin percentage increased to 11.03%, 14 basis points. This increase was positively impacted by 18 basis points in our core merchandise categories, primarily due to increases in our co-branded credit card program and fresh foods, and four basis points in warehouse ancillary and other businesses, primarily e-commerce, partially offset by gasoline. Gross margin percentage was negatively impacted by eight basis points due to a LIFO charge. Changes in foreign currencies relative to the U.S. dollar negatively impacted gross margin by approximately $238, compared to the first thirty-six weeks of 2024, attributable to our Other International and Canadian operations.

The gross margin in core merchandise categories, when expressed as a percentage of core merchandise sales (rather than total net sales), increased ten basis points. The increase was primarily due to fresh foods and foods and sundries, partially offset by non-foods.

Segment gross margin percentage increased in all segments. Our U.S. segment performed similarly to the consolidated results above. Our Canadian and Other International segments gross margin increased, primarily due to increases in core merchandise categories.

Selling, General and Administrative Expenses12 Weeks Ended36 Weeks EndedMay 11,2025May 12,2024May 11,2025May 12,2024SG&A expenses$5,679 $5,145 $17,188 $15,743 SG&A expenses as a percentage of net sales9.16 %8.96 %9.27 %9.18 %

Quarterly Results

SG&A expenses as a percentage of net sales increased 20 basis points. SG&A expenses as a percentage of net sales excluding the impact of gasoline price deflation was 9.07%, an increase of 11 basis points. The comparison to last year was negatively impacted by five basis points due to warehouse operations and other businesses, which included our investment in employee wages. A one-time expense for increased employee vacation negatively impacted SG&A by five basis points. Preopening and central operating costs were both higher by one basis point. Stock compensation decreased by one basis point.

Year-to-date Results

SG&A expenses as a percentage of net sales increased nine basis points. SG&A expenses as a percentage of net sales excluding the impact of gasoline price deflation was 9.19%, an increase of one basis point. Changes in foreign currencies relative to the U.S. dollar decreased SG&A expenses by approximately $142 compared to the first thirty-six weeks of 2024, attributable to our Other International and Canadian operations.