Costco Wholesale Corporation stock research
FY2025 Q3
Costco Wholesale (COST) Gross Margin — Quarter Ended May 11, 2025
Revenue was slightly lower than the prior quarter but higher than the same quarter last year. Gross profit and gross margin both improved compared to both periods, with cost of revenue declining relative to the prior quarter.
Gross margin takeaway
Quarter ended May 11, 2025 · FY2025 Q3
Revenue was slightly lower than the prior quarter but higher than the same quarter last year. Gross profit and gross margin both improved compared to both periods, with cost of revenue declining relative to the prior quarter.
- The gross margin improvement was driven by a larger proportional decline in cost of revenue relative to the decline in revenue from the prior quarter, and by a smaller proportional increase in cost of revenue relative to the increase in revenue from the year-ago quarter.
- Compared to the prior quarter, gross margin strengthened, while revenue decreased slightly and cost of revenue decreased more. Compared to the same quarter last year, revenue and gross profit were higher, and gross margin improved as cost of revenue increased at a slower pace than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
13.0%
Gross profit
$8.2B
Revenue
$63.2B
Cost of revenue
$55.0B
Quarter-over-quarter change
+0.5 pts
Year-over-year change
+0.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| May 12, 2024 | $58.5B | $7.3B | $51.2B | 12.5% |
| Nov 24, 2024 | $62.2B | $8.0B | $54.1B | 12.9% |
| Feb 16, 2025 | $63.7B | $8.0B | $55.7B | 12.5% |
| May 11, 2025 | $63.2B | $8.2B | $55.0B | 13.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Feb 16, 2025
+0.5 pts
Year-over-year change
May 12, 2024
+0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improvement was driven by a larger proportional decline in cost of revenue relative to the decline in revenue from the prior quarter, and by a smaller proportional increase in cost of revenue relative to the increase in revenue from the year-ago quarter.
Compared to the prior quarter, gross margin strengthened, while revenue decreased slightly and cost of revenue decreased more. Compared to the same quarter last year, revenue and gross profit were higher, and gross margin improved as cost of revenue increased at a slower pace than revenue.
Monitor the relationship between merchandise costs and net sales, as merchandise costs are the primary component of cost of revenue and net sales are the main component of revenue.