Costco Wholesale Corp. (NASDAQ:COST)

United States Revenue Trend

The revenue from the United States shows consistent growth over the analyzed period, increasing from $8,415 million in 2019 to $13,625 million in 2024. There is a particularly notable jump between 2021 and 2022, rising from $10,248 million to $13,160 million. A slight decline is observed in 2023, falling to $12,153 million, before recovering to $13,625 million in 2024.

Canada Revenue Trend

Revenue from Canada demonstrates an overall upward trend. Starting at $1,123 million in 2019, it peaks at $1,966 million in 2022. However, a decline occurs in 2023 to $1,579 million, followed by a recovery to $1,895 million in 2024. This suggests seasonal or market challenges that temporarily impacted revenues between 2022 and 2023.

Other International Revenue Trend

Other international markets show steady revenue growth from $1,857 million in 2019 to $3,127 million in 2024. The growth trajectory is relatively smooth and consistent each year, indicating expanding international operations or improved market penetration without significant volatility.

Merchandise Inventories Trend

Merchandise inventories have increased notably over the period, rising from $11,395 million in 2019 to $18,647 million in 2024. There is a sharp increase between 2021 and 2022, from $14,215 million to $17,907 million, followed by a decrease in 2023 to $16,651 million, then a rise again in 2024 to $18,647 million. This pattern may reflect adaptive inventory management in response to demand fluctuations or supply chain conditions.

The financial data reveals consistent growth in most key metrics over the observed periods, with some fluctuations and adjustments related to inventory valuation methods that impact the reported figures.

Merchandise Inventories

The reported merchandise inventories increased steadily from $11,395 million in 2019 to $18,647 million in 2024, showing an overall upward trend with a minor decline observed between 2022 ($17,907 million) and 2023 ($16,651 million). The adjusted merchandise inventories, which factor in the LIFO reserve changes, closely follow this pattern but show a higher value in 2022 ($18,345 million) compared to the reported figure, indicating an inventory valuation effect in that year.

Current Assets

Reported current assets rose consistently from $23,485 million in 2019 to a peak of $35,879 million in 2023, before slightly decreasing to $34,246 million in 2024. When inventory adjustments are considered, the adjusted current assets are marginally higher, particularly in 2022, reflecting the inventory valuation impact on liquid assets. The general trend indicates growth in current asset holdings over the six-year period.

Total Assets

Total assets increased from $45,400 million in 2019 to $69,831 million in 2024, demonstrating expansion of the asset base over time. The adjusted total assets consistently exceed the reported figures starting from 2022, again due to the inventory adjustment, with the largest divergence observed in that year at $64,604 million adjusted versus $64,166 million reported. This suggests inventory accounting adjustments impacted the asset valuation significantly in 2022 but less so in other years.

Stockholders’ Equity

Both reported and adjusted stockholders’ equity show growth from $15,243 million in 2019 to a peak of around $25,058 million in 2023, before declining to approximately $23,622 million in 2024. The adjustment impacts are noticeable in 2022, where adjusted equity is higher ($21,080 million) than reported ($20,642 million), indicating a positive effect from inventory valuation adjustments on equity for that period.

Net Income

Reported net income attributable to the company increased steadily from $3,659 million in 2019 to $7,367 million in 2024, reflecting consistent profitability improvement. Adjusted net income figures deviate notably in 2022 and 2023, with adjusted income higher than reported in 2022 ($6,282 million vs $5,844 million) but lower in 2023 ($5,854 million vs $6,292 million). These variations underscore the impact of inventory and related accounting adjustments on profitability measures during these years.

Overall, the data reflects steady growth in asset size, equity, and profitability, with periodic adjustments related to inventory valuation affecting the reported financial figures. The LIFO reserve adjustments primarily influence reported inventory, asset, equity, and income values around 2022 and 2023, suggesting changes in inventory accounting methods or market conditions impacting inventory costs during this timeframe.

Current Ratio

The reported current ratio exhibited minor fluctuations over the analyzed periods, starting at 1.01 in 2019, increasing to a peak of 1.13 in 2020, and then gradually declining to 0.97 by 2024. The adjusted current ratio closely followed the reported figures, with a slight increase in 2022 to 1.04 before aligning again and decreasing to 0.97 in 2024. Overall, the liquidity position showed a slight weakening toward the end of the period.

Net Profit Margin

The reported net profit margin demonstrated a generally positive trend, rising steadily from 2.45% in 2019 to 2.95% in 2024. The adjusted margin presented a similar trajectory but showed a more noticeable dip in 2023 to 2.46%, following a peak of 2.82% in 2022, before recovering to 2.95% in 2024. This suggests some volatility in profitability when adjustments for inventory LIFO reserve are considered, although the overall profitability improved over time.

Total Asset Turnover

Total asset turnover ratios remained relatively stable with slight variations. Reported turnover decreased from 3.29 in 2019 to 2.94 in 2020 but then consistently increased, reaching 3.57 in 2024. Adjusted turnovers mirrored this pattern closely. This indicates a general improvement in asset utilization efficiency after a brief decline early in the period.

Financial Leverage

The reported financial leverage ratio varied moderately with an increase from 2.98 in 2019 to 3.37 in 2021, followed by a decrease to 2.75 in 2023 and a slight rise again to 2.96 in 2024. The adjusted leverage showed a similar pattern but reflected a slightly lower value in 2022 (3.06) compared to the reported (3.11). These changes suggest shifts in the company’s use of debt and equity financing, with leverage peaking around 2021 and then declining.

Return on Equity (ROE)

Reported ROE displayed meaningful variation, initially declining from 24.00% in 2019 to 21.89% in 2020, then improving to a peak of 28.51% in 2021 before dropping to 25.11% in 2023 and rising sharply to 31.19% in 2024. Adjusted ROE values were close to reported figures with a notable increase to 29.8% in 2022, followed by a decline to 23.36% in 2023, and a subsequent rise to 31.19% in 2024. This volatility highlights fluctuations in shareholder returns, particularly impacted by adjustments related to inventory accounting.

Return on Assets (ROA)

The reported ROA followed a steady upward trend, moving from 8.06% in 2019 to 10.55% in 2024. Adjusted ROA exhibited a similar pattern with a decrease in 2023 to 8.48% from a peak of 9.72% in 2022, before increasing again to 10.55% in 2024. This indicates growing efficiency in generating profits from assets, with some short-term variability due to adjustments.

Current Assets (Reported vs Adjusted)

The reported current assets exhibited a general upward trend from 2019 to 2023, increasing from 23,485 million USD in 2019 to a peak of 35,879 million USD in 2023. However, in 2024, there was a slight decline to 34,246 million USD. The adjusted current assets closely followed the reported figures, with a notable adjustment in 2022 where the adjusted value (33,134 million USD) exceeded the reported figure (32,696 million USD). This suggests inventory adjustments impacting the current asset base during that year.

Current Ratio (Reported vs Adjusted)

The reported current ratio started at 1.01 in 2019, improved to 1.13 in 2020, and then decreased to 1.00 in 2021. Subsequently, it showed a moderate recovery to 1.02 in 2022 and 1.07 in 2023, before declining below parity to 0.97 in 2024. The adjusted current ratio mirrored the reported ratio throughout the timeline with a minor elevation in 2022 (1.04 adjusted vs 1.02 reported), aligning with the adjustment seen in current assets.

Insights and Implications

Over the six-year period, the overall increase in current assets indicates growth in short-term resources, supporting operational needs. The adjusted figures suggest an inventory-related LIFO reserve adjustment that slightly increased current assets and liquidity ratios in 2022. Despite improvements in liquidity ratios from 2019 through 2023, the decline below 1.0 in 2024 signals a potential tightening of short-term liquidity, which warrants attention. The close alignment between reported and adjusted ratios except for the 2022 adjustment implies consistent inventory accounting practices with temporary impacts on reported liquidity.

The financial data exhibits a generally positive trend in net income and profit margins over the observed periods. Both reported and adjusted net income attributable to the company show consistent growth from 2019 to 2024. Initially, reported net income increased steadily from $3,659 million in 2019 to $6,292 million in 2023, followed by a notable rise to $7,367 million in 2024. Adjusted net income mirrors this upward trajectory, with values closely aligning with reported figures, except for a higher adjusted figure in 2022 compared to the reported amount.

In terms of profitability, the reported net profit margin maintains relative stability with a slight upward trend. It remains constant at 2.45% for 2019 and 2020, then gradually rises to 2.95% by 2024. The adjusted net profit margin follows a similar pattern but shows more fluctuation. It peaks at 2.82% in 2022, diverges notably from the reported margin that year, then declines to 2.46% in 2023 before increasing again to 2.95% in 2024. This fluctuation may suggest the impact of adjustments linked to inventory accounting or other factors affecting the profit margin calculations.

Overall, the data reflects sustained profitability growth with minor variations between reported and adjusted figures. The rising net income and improving net profit margins indicate enhanced operational performance and efficiency. The alignment of reported and adjusted financial metrics in the final year suggests convergence, potentially implying stability in inventory accounting effects or other adjustments over time.

The analysis of total assets and total asset turnover over the reported periods reveals several notable trends.

Total Assets

Total assets demonstrated a consistent upward trajectory from 2019 through 2024. The reported total assets increased from 45,400 million US dollars in 2019 to 69,831 million US dollars in 2024, reflecting steady growth over the six-year span. The adjusted total assets, which account for the inventory LIFO reserve adjustment, closely mirror the reported totals, with a minor divergence noted in 2022, where adjusted assets are slightly higher (64,604 million USD versus 64,166 million USD reported). This suggests that the inventory LIFO reserve adjustment had a marginal impact on asset valuation in that year but otherwise shows negligible effect on total assets over the analyzed periods.

Total Asset Turnover

The total asset turnover ratio exhibits some variability yet trends positively overall. Starting at 3.29 in 2019, the ratio declined to 2.94 in 2020, indicating a slight decrease in the efficiency of asset utilization that year. However, it rebounded to 3.24 in 2021 and continued improving to 3.57 by 2024. The adjusted total asset turnover ratios align very closely with the reported figures throughout the period, highlighting consistent operational efficiency regardless of inventory accounting adjustments.

In summary, the financial data reflects ongoing growth in asset base with improving efficiency in using these assets to generate revenue. The minimal difference between reported and adjusted figures suggests that the inventory LIFO reserve adjustment does not materially affect the overall financial position or asset utilization metrics. The improvements in asset turnover after 2020 indicate a recovery or enhancement in operational performance and asset management practices in the later years examined.

Total Assets

The reported total assets demonstrate a consistent upward trajectory from 45,400 million US dollars in 2019 to 69,831 million US dollars in 2024. There is a notable increase each year, with the most substantial annual rise occurring between 2019 and 2020, and steady growth continuing thereafter. The adjusted total assets mirror the reported values closely, with a slight divergence in 2022 where adjusted assets are marginally higher, indicating a minor inventory LIFO reserve adjustment during that year.

Stockholders’ Equity

Reported stockholders' equity increased from 15,243 million US dollars in 2019 to a peak of 25,058 million US dollars in 2023, before declining slightly to 23,622 million US dollars in 2024. The adjusted equity figures follow the same pattern, with a marginally higher adjusted equity in 2022 compared to the reported figure, reflecting the impact of inventory adjustments. The slight decrease in equity in the final year after several years of growth warrants attention, potentially indicating changes in retained earnings or other equity components.

Financial Leverage

The reported financial leverage ratio, defined as total assets divided by stockholders' equity, fluctuates over the period, starting at 2.98 in 2019 and reaching a peak of 3.37 in 2021. It then declines to 2.75 in 2023 before rising again to 2.96 in 2024. The adjusted financial leverage closely tracks these trends and is slightly lower in 2022 due to the inventory adjustment impact on total assets and equity. The leverage ratios indicate moderate fluctuation reflecting changes in the capital structure and asset base over time.

Net Income

The reported net income attributable to the company demonstrates a consistent upward trajectory from 2019 through 2024, increasing from $3,659 million to $7,367 million. Adjusted net income trends similarly, with a notable adjustment in 2022 where the adjusted figure ($6,282 million) exceeds the reported net income ($5,844 million), followed by a slight decrease in 2023 before rising again in 2024 to match the reported figure.

Stockholders' Equity

Reported total stockholders’ equity increased from $15,243 million in 2019 to a peak of $25,058 million in 2023 before decreasing to $23,622 million in 2024. Adjusted stockholders’ equity follows the same pattern, showing a slight divergence in 2022 where the adjusted equity ($21,080 million) is higher than the reported figure ($20,642 million). Overall, equity shows growth until 2023, with a minor decline in the most recent year.

Return on Equity (ROE)

Reported ROE values fluctuate over the years, starting at 24% in 2019, falling to the low 20s in 2020 and 2023, and peaking at 31.19% in 2024. Adjusted ROE generally mirrors reported ROE, except for 2022 and 2023 where it diverges: adjusted ROE peaks higher at 29.8% in 2022 compared to reported 28.31%, but then drops more sharply to 23.36% in 2023 before recovering to 31.19% in 2024. This suggests that LIFO reserve adjustments have a significant effect on profitability metrics in some years.

Overall Trends and Insights

The consistent increase in both reported and adjusted net income indicates strong earnings growth over the six-year period, reflecting improving operational performance. The increase in stockholders’ equity until 2023 suggests accumulation of retained earnings and possible capital growth, although the decline in 2024 warrants further examination. The fluctuations in ROE highlight variability in profitability relative to equity, with the adjusted measure showing greater volatility likely due to inventory accounting adjustments. These patterns underscore the importance of considering LIFO reserve adjustments when evaluating financial performance and return metrics.

Net Income Trends

The reported net income shows a consistent upward trend over the six-year period, increasing from $3,659 million in 2019 to $7,367 million in 2024. Notably, there is a significant jump from 2023 to 2024, indicating accelerated earnings growth.

The adjusted net income, which accounts for inventory LIFO reserve adjustments, follows a similar increasing pattern but exhibits some variability in 2022 and 2023. In 2022, adjusted net income peaks at $6,282 million, surpassing the reported figure, then declines in 2023 to $5,854 million before aligning again with the reported net income in 2024 at $7,367 million.

Total Assets Observation

Reported total assets steadily increase from $45,400 million in 2019 to $69,831 million in 2024, reflecting consistent asset growth over time. The adjusted total assets closely mirror the reported values with a slight divergence in 2022, where adjusted assets are marginally higher at $64,604 million compared to the reported $64,166 million, then converge again in subsequent years.

Return on Assets (ROA) Analysis

Reported ROA experienced fluctuations, starting at 8.06% in 2019, dipping to 7.2% in 2020, followed by a gradual rise to 10.55% in 2024. This indicates improving efficiency in asset utilization over the period.

The adjusted ROA presents a slightly different trend, maintaining parity with reported ROA up to 2021. In 2022, adjusted ROA peaks at 9.72%, exceeding the reported 9.11%, suggesting higher profitability when adjusting for inventory methods. However, adjusted ROA declines to 8.48% in 2023 before recovering to 10.55% in 2024, aligning once again with the reported performance.

Insights

The discrepancies between reported and adjusted figures, primarily in 2022 and 2023, suggest that inventory LIFO reserve adjustments impact income and asset valuation, affecting profitability metrics during these years. Overall, the company demonstrates robust growth in net income and asset base, with increasing efficiency reflected in rising ROA, particularly in the most recent year.