5 Must-Read Analyst Questions From Costco’s Q3 Earnings Call

October 02, 2025 at 01:30 AM EDT

COST Cover Image

Costco’s third quarter saw a negative market reaction, with shares declining following results that otherwise met most Wall Street expectations. Management emphasized that growth in membership upgrades, expansion of executive member benefits, and new store openings were key factors driving the company’s performance. CEO Ron Vachris pointed to the 1% lift in U.S. sales from extended store hours and a meaningful increase in upgrades to executive membership. CFO Gary Millerchip highlighted that higher employee wages and costs related to expanded hours were largely absorbed through productivity gains, limiting their impact on expenses. Despite steady traffic growth and higher average ticket sizes, management acknowledged that inflation in nonfood categories and ongoing tariff pressures required continued cost mitigation and supply chain adjustments.

Is now the time to buy COST? Find out in our full research report (it’s free).

Costco (COST) Q3 CY2025 Highlights:

Revenue: $86.16 billion vs analyst estimates of $85.91 billion (8.1% year-on-year growth, in line)
Adjusted EPS: $5.87 vs analyst estimates of $5.80 (1.2% beat)
Adjusted EBITDA: $4.12 billion vs analyst estimates of $4.17 billion (4.8% margin, 1.2% miss)
Operating Margin: 3.9%, in line with the same quarter last year
Locations: 914 at quarter end, up from 890 in the same quarter last year
Same-Store Sales rose 5.7% year on year, in line with the same quarter last year
Market Capitalization: $406.6 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Costco’s Q3 Earnings Call

Christopher Horvers (JPMorgan) asked about member awareness and sales impact of extended hours. CEO Ron Vachris described broad communication efforts and said the 1% sales lift was based on post-launch analysis, with further impact possible over time.
Michael Lasser (UBS) questioned membership renewal rates given the growth in online sign-ups. CFO Gary Millerchip acknowledged a likely short-term decline, emphasizing ongoing digital engagement and auto-renewal initiatives to stabilize rates.
Chuck Grom (Gordon Haskett) inquired about margin performance across categories and holiday assortment changes. Millerchip cited broad-based margin improvement from supply chain efficiency and Kirkland Signature, while Vachris detailed the strategic shift in seasonal categories.
Simeon Gutman (Morgan Stanley) focused on e-commerce grocery trends and competition. Vachris noted strong Instacart-driven traffic and said new executive benefits were accretive, but competitive impacts were hard to isolate.
Edward Kelly (Wells Fargo) asked about the outlook for tariffs and margin impacts. Millerchip described ongoing mitigation efforts and stated any price increases will be a last resort, with a commitment to maintaining value for members.

Catalysts in Upcoming Quarters

Looking ahead, our team will be monitoring (1) the pace and effectiveness of new warehouse openings and remodels, (2) the impact of digital engagement efforts on member renewal rates and executive upgrades, and (3) the company’s ability to manage inflation and tariff headwinds while preserving pricing discipline. Execution in e-commerce and the success of new product assortments will also be important milestones for Costco’s ongoing growth.

Costco currently trades at $916.80, down from $943.41 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

About Us

About Cabling Installation & Maintenance

Contact Cabling Installation & Maintenance

Editorial

Advertising and Sponsorship Sales

Subscriptions and Memberships

Feedback/Problems

5 Must-Read Analyst Questions From Costco’s Q3 Earnings Call

Costco (COST) Q3 CY2025 Highlights:

Our Top 5 Analyst Questions From Costco’s Q3 Earnings Call

Catalysts in Upcoming Quarters

High-Quality Stocks for All Market Conditions

More News