The following is a summary of the Costco Wholesale Corporation (COST) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Costco Wholesale Corporation reported Q1 net income of $1.798 billion, or $4.04 per diluted share, a significant increase from $1.589 billion, or $3.58 per diluted share last year.

• Net sales for the quarter were $60.99 billion, marking a 7.5% increase from the previous year's $56.72 billion.

• Membership fee income grew to $1.166 billion, up 7.8% year-over-year.

• Gross margin improved by 24 basis points year-over-year to 11.28%.

Business Progress:

• Opened seven new warehouses, including one relocation, adding six net new buildings with four outside the U.S.

• Set new records in U.S. bakery division with 4.2 million pies sold prior to Thanksgiving and a record 274,000 whole pizzas sold on Halloween.

• Prescription growth in U.S. pharmacy business exceeded 19%, setting new volume records.

• Costco Logistics achieved nearly 1 million deliveries in Q1, with significant improvements in delivery speed.

Opportunities:

• Continuing to focus on new warehouse openings, aiming for 29 during fiscal year 2025, enhancing market presence both domestically and internationally.

• Increased focus on e-commerce and digital strategies, including tech enhancements like the ability to check warehouse inventory via the Costco app, expected to drive future growth and customer satisfaction.

Risks:

• The growth from newer endeavors such as retail media is in early stages, implying an uncertain growth trajectory.

• Potential operational disruptions due to ongoing supply chain challenges, including the predictability of on-time shipping and the impact of global issues like port strikes.

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