$Costco Wholesale(COST.US) 1QF25 Quick Read: This morning, warehouse retail leader Costco announced its Q1 results for fiscal year 2025, which overall looks good and stable.

1) Core Indicator - Same-store sales grew 5.2% this quarter, slightly slowing from 5.4% last quarter. By region, same-store growth in North America and Canada was completely in line with market expectations, while other international regions saw same-store growth of 4.7%, which seems to be a significant slowdown (last quarter 5.7%) and below market expectations, but this was mainly affected by exchange rate factors. Excluding exchange rate and oil price fluctuations, comparable growth in international regions was 7.1%, slightly accelerating from last quarter and generally in line with expectations. Reflecting on financial metrics, this quarter's sales revenue was $61 billion, a year-on-year increase of 7.5%, which is basically in line with expectations.

2) Membership fee revenue this quarter was $1.2 billion, a year-on-year increase of 7.8%, slightly below the market expectation of 8% growth. This was mainly due to a net increase of 1.2 million paid members this quarter, bringing the total to 77.4 million (+7.5% year-on-year). However, possibly affected by the recent membership fee increase and tightening of membership eligibility checks, the membership renewal rates in both global and North American regions decreased by 0.1 percentage points quarter-on-quarter.

3) While the revenue side was basically in line with expectations, Costco's profit side showed a slight outperformance. First, the gross margin for merchandise sales this quarter was 11.3%, higher than the expected 11.1%, resulting in gross profit exceeding expectations by about 2%. Additionally, due to the recognition of approximately $100 million in tax savings this quarter (compared to $44 million in the same period last year), the actual recognized tax expense this quarter was $510 million, significantly lower than the expected $570 million. This was the main reason for net profit exceeding market expectations by 6.5%.