My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Costco Wholesale Corporation fourth quarter 2024 conference call. All lines have been placed on mute to prevent any background noise.

Costco stock is lower Friday after the membership warehouse firm reported a top-line miss in its fiscal fourth quarter, but Wall Street remains bullish.

Costco Wholesale Corp (COST) reports a 9% increase in net income and significant gains in e-commerce sales for Q4 2024.

Costco's merchandise costs rose to $69.588 billion for the quarter, up from $69.219 billion a year earlier. Also, selling, general, and administrative (SG&A) expenses climbed to $7.067 billion from $6.939 billion.

Costco’s stock (COST) has surged over 66% in the past year, driven by strong sales, membership loyalty, and consistent earnings growth.

Even with its near-flat revenue growth, Costco was still able to boost its gross margin from 11.9% to 12.4%. Operating income jumped by 9.4% to $3.04 billion, and earnings per share rose from $4.86 to $5.29, beating the consensus estimate of $5.08.

Costco's SG&A optimization and productivity improvements are expected to offset margin pressures, maintaining a positive growth trajectory. See why COST stock is a Buy.

Grocery, pharmacy, and health and beauty all played roles in Costco’s solid fourth quarter in 2024, but the real star continues to be non-food. Comparable sales in the U.S. were up 5.3% year over year in Q4 while ecommerce increased 18.9%.

Headed into fiscal 2025, the company continues to build on its success–literally. In light of its growing digital and physical store business, Costco opened 30 new warehouses this year. The company now runs 891 such sites.