Costco Wholesale Corp Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Christopher Horvers - JPMorgan Chase & Co - Analyst : Thanks. Good evening. So my question has to do with the extended member hours. To what extent do you think that your member is actually aware of these extended hours. Was the June 30 the soft launch and you've made a harder launch as you came into the fall? And how do you think about that 1% comp lift in terms of it becoming much larger? Thanks very much.

Question: Christopher Horvers - JPMorgan Chase & Co - Analyst : Thanks very much.

Question: Michael Lasser - UBS - Analyst : Good evening. Thank you so much for taking my question. You mentioned that you would expect your renewal rate to continue to fall as some of the digital sign-ups attrit out of the base. How far do you expect to see the membership rate decline? If we walk back in the pre-COVID in 2019, Costco regularly had a renewal rate, a worldwide renewal rate in the mid to high 80% range. Is it realistic for it to go back to that? And if it did, what actions would Costco take to stabilize or improve that? How is this all going to impact the financial performance? Thank you very much.

Question: Charles Grom - Gordon Haskett Capital Corp - Analyst : Afternoon. Can we dive into your core-on-core margins a little bit up 29 basis points year-over-year, how that spans across categories? And then more broadly, curious any notable observations on price increases you've taken recently? And I guess what unit velocity you're observing in those product categories? And then just last question, just on the holiday. You called out how the product mix might be different than years past. Can we just double click on that comment? I guess, what might be different in terms of -- particularly in the general merchandise part of the business? Thanks.

Question: Charles Grom - Gordon Haskett Capital Corp - Analyst : Great. Thank you.

Question: Zhihan Ma - Bernstein - Analyst : Great, thank you. I wanted to follow up on the membership fee side, where you -- I think Gary mentioned it's 7% growth, excluding the price increase and FX. How sustainable do you think that trend is going to be especially in the US and Canada, where you're opening some of the fill-in stores in markets where the penetration may already be fairly high. So is there a risk of the membership fee income growth slowing down from here? Thank you.

Question: Zhihan Ma - Bernstein - Analyst : Thank you very much.

Question: Simeon Gutman - Morgan Stanley - Analyst : Hey, Ron. Hey, Gary. My question is on e-commerce and specifically grocery. So there was this announcement from Amazon in the quarter around increased fulfillment capabilities. Can you talk about if you've seen a spike in your Instacart driven traffic since then? I know you've added some benefits, so maybe it's hard to parse it out. And then can I ask if Costco has what you think is an optimal capability to meet with what is increasing online grocery demand? Thanks.

Question: Simeon Gutman - Morgan Stanley - Analyst : Yeah, thank you.

Question: Peter Benedict - Robert W. Baird & Co Inc - Analyst : Oh guys, thanks for taking the question. It kind of on the unit growth, the 30% for this year, 20% in the US, just curious the sustainability of that pace of growth? How long do you think you can kind of sustain that level of growth here? And where do you think you can get the international unit growth to over the next few years? And kind of related to that, maybe a sense for what the CapEx plan is for next year. I apologize if we missed that. But curious kind of what the spend plan is for next year in terms of total CapEx. Thank you.

Question: Greg Melich - Evercore ISI - Analyst : I think a couple of questions. I do want to circle back on inflation. Gary, I think you mentioned it was low single digits, maybe 2%-ish last quarter. and now it's low to mid-singles. Can you just describe is it Non-Food driving all that acceleration and sort of frame it magnitude-wise?

Question: Greg Melich - Evercore ISI - Analyst : Got it. And my follow-up is we've just seen a lot of the credit card companies, add perks and race fees on their cards. I'm just sort of curious what trends you're seeing there in terms of penetration and any thought of ways to maybe enhance the member value on that front. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 25, 2025 / 9:00PM, COST.OQ - Q4 2025 Costco Wholesale Corp Earnings Call

Question: Greg Melich - Evercore ISI - Analyst : That's great. Thanks and good luck.

Question: Kelly Bania - BMO Capital Markets - Analyst : Hi Ron and Gary, thanks for taking our questions. Just wanted to ask about membership growth and total membership households that continues to increase in that 6% to 7% range year-over-year. Just two questions about that. One, is the right way to think about the components of that more

Question: Rupesh Parikh - Oppenheimer & Co Inc - Analyst : Good afternoon. Thanks for taking my question. So maybe a housekeeping question to start. So just on the incremental hours P&L impact. It sounds like it's going well. Good sales lift and you're seeing Gold upgraded Executive members. As you look towards this fiscal year, do you expect it to be a net benefit, the benefits versus some of the expenses with the increase in employee hours?

Question: Rupesh Parikh - Oppenheimer & Co Inc - Analyst : Great. And then maybe just my follow-up question. I know Gary and alternative revenue streams. You guys have talked about successful media campaigns earlier this year. So just curious on any new efforts on the alternative revenue stream as we look towards the upcoming year.

Question: Rupesh Parikh - Oppenheimer & Co Inc - Analyst : Great, thank you. Best of luck.

Question: Steven Zaccone - Citi - Analyst : Great, good evening. Thanks very much for taking my question. Couple of follow-ups. First follow-up is you've talked about cannibalization to comps for the last couple of months. Do you expect that to be a headwind throughout 2026? And then just on some of the questions around the inflation outlook. On the Non-Food side, based on what you're seeing in the business, do you expect Non-Foods inflation kind of stay in this range for the next couple of quarters, especially trying to understand are we at some of the peak pressure? Or could it get a little bit higher from here? Thanks.

Question: Steven Zaccone - Citi - Analyst : Okay, understood. Thanks very much.

Question: Oliver Chen - TD Cowen - Analyst : Hi, Gary and Ron, on the digital road map, there's been a lot of customer-centric innovation you've done. What's low-hanging fruit ahead that you're most excited about? And then on Kirkland Signature, which is iconic, what's next is it just tweaks or is it a similar strategy? Some of the language in this call leaning into KS, that's probably a product of the environment. But was anything different about you'll continue to amplify that and maintain how great it is? Thanks a lot.

Question: Oliver Chen - TD Cowen - Analyst : Thanks a lot, best regards. Maybe you should go to 24 hours, by the way. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 25, 2025 / 9:00PM, COST.OQ - Q4 2025 Costco Wholesale Corp Earnings Call