Costco Wholesale Corp. (NASDAQ:COST)

The "United States Operations" reportable segment exhibits a consistent upward trajectory in key financial metrics over the observed six-year period. Total revenue shows a steady increase each year, starting at $111.75 billion in 2019 and reaching $184.14 billion by 2024. This consistent growth in revenue indicates expanding sales and market penetration within the United States.

Operating income has also grown substantially over the same period. Beginning at $3.06 billion in 2019, operating income increased to $6.22 billion by 2024. The growth in operating income outpaces that of total revenue, suggesting improvements in operational efficiency or cost management within the segment.

The segment profit margin follows a positive trend as well, rising from 2.74% in 2019 to 3.38% in 2024. Despite a slight dip in 2023 to 3.05% from 3.19% in 2022, the margin recovers and reaches its highest point in the last year observed. This margin expansion further supports the view that profitability within the segment has been improving, which aligns with the above-average increase in operating income relative to revenue.

Total Revenue

Consistently increasing from $111.75 billion to $184.14 billion over six years, reflecting sustained sales growth.

Operating Income

Doubled from approximately $3.06 billion to $6.22 billion, showing strong profitability gains.

Segment Profit Margin

Improved from 2.74% to 3.38%, indicating enhanced operational efficiency and cost control, with a minor dip in 2023 before recovering in 2024.

Overall, the data indicates a healthy and growing business segment with expanding revenues, significantly higher profits, and improving profit margins. The temporary decrease in profit margin in 2023 suggests there may have been factors impacting profitability that year, but the recovery in 2024 demonstrates resilience and effective management actions.

The Canadian Operations segment demonstrates a consistent upward trend in financial performance over the analyzed periods.

Operating Income

The operating income shows fluctuations in the earlier years, with a slight decline from 924 million USD in 2019 to 860 million USD in 2020, followed by a significant increase to 1,176 million USD in 2021. Subsequent years continue this positive trend, reaching 1,648 million USD in 2024, indicating strong growth and improving profitability over time.

Total Revenue

Total revenue exhibits a steady increase throughout the entire period. Beginning at 21,366 million USD in 2019, revenue grows consistently each year, reaching 34,874 million USD in 2024. This consistent increase reflects expansion in sales and market presence within the segment.

Segment Profit Margin

The profit margin shows minor fluctuations but generally maintains a stable upward movement. Starting at 4.32% in 2019, it experiences a slight dip to 3.83% in 2020, then recovers and improves to 4.73% by 2024. This suggests enhanced operational efficiency and improved profitability relative to sales over time.

Overall, the data reflects positive momentum for Canadian Operations, characterized by increasing revenues, improving operating income, and gradually rising profit margins, signaling effective management and growth in this segment.

Operating Income

The operating income exhibits a generally upward trend over the analyzed period. Starting at US$750 million in September 2019, it increased to US$942 million in August 2020 before reaching US$1,270 million in August 2021. Despite a slight decline to US$1,179 million in August 2022, it rebounded and continued to grow to US$1,274 million in September 2023, and further to US$1,420 million in September 2024. This indicates sustained profit growth with minor fluctuations.

Total Revenue

Total revenue demonstrates consistent growth throughout the periods. From US$19,586 million in September 2019, revenue steadily rose each year to US$22,185 million (August 2020), US$27,233 million (August 2021), US$29,985 million (August 2022), US$32,604 million (September 2023), and finally US$35,436 million (September 2024). The data reflects a continuous expansion of market activity and sales volume over time.

Segment Profit Margin

The segment profit margin shows variability but remains within a relatively narrow range. It started at 3.83% in September 2019 and increased to 4.25% in August 2020, peaking at 4.66% in August 2021. Subsequently, the margin declined to 3.93% in August 2022 and remained stable around 3.91% in September 2023, followed by a slight increase to 4.01% in September 2024. These fluctuations suggest some variability in operational efficiency or cost management but overall maintained profitability above 3.8%.

Summary

The analysis reveals robust revenue growth alongside an overall increase in operating income, reflecting positive business expansion. Despite some fluctuations in the segment profit margin, the company maintained a solid profitability level throughout the period. The slight dip in operating income in 2022 contrasts with continuous revenue growth, potentially indicating temporary margin pressure or increased costs during that year, which was subsequently recovered. The improving margin in recent years may suggest enhanced operational efficiency or favorable market conditions.

Operating Income

The operating income has demonstrated a consistent upward trajectory over the six-year period. Beginning at $3,063 million in 2019, it increased each year, reaching $6,217 million by 2024. This represents a growth of approximately 103% from the initial to the final year, indicating strong and sustained profitability improvements within the segment.

Total Assets

Total assets grew from $32,162 million in 2019 to a peak of $49,189 million in 2023, reflecting significant asset base expansion over time. However, in 2024, total assets slightly declined to $48,816 million, which may suggest asset optimization or divestitures. Despite this small decrease, the overall trend from 2019 to 2024 is positive, with assets increasing by over 50%.

Segment Return on Assets (ROA)

The segment ROA values display a generally positive trend with some fluctuations. Starting at 9.52% in 2019, it slightly dipped to 9.47% in 2020 but then increased steadily to 12.74% by 2024. This rise in ROA indicates improving efficiency in utilizing assets to generate operating income, reaching the highest ROI figure in the final year. Notably, 2022 saw a peak at 11.73%, followed by a small decrease in 2023 before the highest value was recorded in 2024.

Operating Income

The operating income exhibited an overall upward trend over the six-year period. Starting at 924 million US dollars in 2019, it experienced a decline in 2020 to 860 million. However, from 2021 onward, there was a consistent year-over-year increase, reaching 1,648 million US dollars by 2024. This suggests improving operational efficiency or increasing profitability within the segment.

Total Assets

Total assets showed a general increasing pattern but with some fluctuations. Assets rose steadily from 4,369 million US dollars in 2019 to a peak of 6,558 million in 2022. In 2023, there was a slight decrease to 6,420 million, followed by an increase to 6,915 million in 2024. This indicates ongoing investment or expansion activities despite minor asset reductions in one year.

Segment Return on Assets (ROA)

Segment ROA showed variability but a positive trend overall. It decreased from 21.15% in 2019 to 16.32% in 2020, reflecting reduced efficiency or profitability during that year. Subsequently, ROA improved consistently, reaching 23.83% by 2024. This indicates strengthening returns generated from the assets utilized in the segment.

Summary of Trends

The data reflects an initial performance dip in 2020 across operating income and segment ROA, likely linked to adverse operational conditions. Following this, there has been a recovery and growth phase characterized by increasing profitability, asset base expansion, and improved asset utilization efficiency. The reduction in total assets in 2023 appears to be temporary and does not detract from the overall positive trajectory observed by 2024.

Operating Income

The operating income exhibited an overall upward trend over the six-year period. Starting at 750 million US dollars in 2019, it increased consistently each year except for a slight decline in 2022, where it fell from 1,270 million in 2021 to 1,179 million. However, this dip was followed by recovery and further growth, reaching a peak of 1,420 million US dollars in 2024. This indicates resilience and an improving profitability trajectory in recent years.

Total Assets

Total assets grew considerably from 8,869 million US dollars in 2019 to 14,100 million in 2024. The asset base expanded steadily each year, with minor fluctuations observed in 2022 when assets decreased from 13,717 million in 2021 to 12,704 million. Despite this short-term decrease, total assets recovered and continued to increase to 13,385 million in 2023 and further to 14,100 million in 2024. This growth suggests sustained investments or acquisitions supporting segment expansion.

Segment Return on Assets (ROA)

The segment ROA showed a stable positive trend, starting at 8.46% in 2019 with a slight decrease to 7.9% in 2020. From 2021 onward, ROA improved year over year, reaching 10.07% in 2024. The increase in ROA amidst growing total assets and operating income suggests improved efficiency in asset utilization and profitability within the segment during the period analyzed.

Total revenue

The total revenue demonstrated a consistent upward trend over the analyzed periods. Starting from 111,751 million USD in September 2019, revenue increased each year, reaching 184,143 million USD by September 2024. Notably, the growth was particularly strong between 2020 and 2022, indicating robust sales expansion during that time frame. Although the rate of growth shows some moderation after 2022, the overall revenue continued to rise steadily.

Total assets

Total assets increased markedly from 32,162 million USD in 2019 to a peak of 49,189 million USD in 2023. However, there was a slight decline in assets in the final reported period, falling to 48,816 million USD in 2024. The general trend reflects an expansion of the asset base over the years, supporting the company’s growth and operation scale. The slight drop in the last period may merit further investigation.

Segment asset turnover

The segment asset turnover ratio, which measures the efficiency of asset utilization to generate revenue, showed some fluctuations across the periods. It started at 3.47 in 2019, declined somewhat to 3.18 in 2020, then improved again to 3.57 in 2021. From 2021 onward, there was a positive trend with the ratio rising to 3.77 by 2024, except for a minor dip to 3.59 in 2023. This indicates an overall improvement in the company's ability to generate revenue from its asset base over the years.

The analysis of the Canadian Operations segment over the reported periods reveals several significant financial trends.

Total Revenue

The total revenue shows a consistent upward trajectory from 2019 to 2024. Starting at $21,366 million in 2019, it increased steadily each year, reaching $34,874 million by 2024. The most notable growth occurred between 2020 and 2021, where revenue jumped by approximately 21.6%, followed by continued increments, though the growth rate appears to moderate slightly in the most recent year.

Total Assets

Total assets also exhibit growth, rising from $4,369 million in 2019 to $6,915 million in 2024. The increase is consistent year-over-year, with the largest annual increment between 2019 and 2020. However, a slight dip is observed between 2022 and 2023, where total assets decreased from $6,558 million to $6,420 million, before rising again in 2024.

Segment Asset Turnover Ratio

The segment asset turnover ratio, which measures the efficiency of asset use in generating revenue, starts relatively high at 4.89 in 2019 but declines to 4.26 in 2020. Thereafter, it recovers and generally trends upward through 2023, peaking at 5.15, before a marginal decline to 5.04 in 2024. This indicates an improvement in the asset utilization efficiency over the longer term, despite the initial drop in 2020.

Overall, the data indicates a growing revenue base supported by expanding asset holdings, with an improving efficiency in asset usage to generate sales. The slight fluctuations in total assets and asset turnover between 2022 and 2024 suggest periods of asset base adjustments, possibly reflecting strategic investments or disposals. The consistent revenue growth paired with increasing asset turnover suggests enhanced operational management within the Canadian segment.

Total revenue

The total revenue for Other International Operations has shown a consistent upward trend over the reported periods. Beginning at $19,586 million in 2019, revenue increased steadily each year, reaching $35,436 million by 2024. This represents significant growth, with a notable increase between 2020 and 2021, as well as continuing robust growth through 2024.

Total assets

Total assets for the segment have generally increased over the period but with some fluctuations. Assets rose from $8,869 million in 2019 to a peak of $13,717 million in 2021. However, there was a decline to $12,704 million in 2022 before assets started to increase again, reaching $14,100 million by 2024. This pattern suggests some asset reorganization or divestitures in 2022, followed by fresh asset accumulation in the subsequent years.

Segment asset turnover

The segment asset turnover ratio shows the efficiency of the segment in generating revenue from its assets. Initially, the ratio decreased from 2.21 in 2019 to 1.86 in 2020, indicating lower asset utilization during that year. Afterward, the ratio improved consistently, rising to 1.99 in 2021 and then further increasing each year to 2.51 by 2024. The increase in asset turnover ratio correlates with the revenue growth, suggesting improved operational efficiency and more effective use of assets in generating revenue over time.

Overall Analysis

The segment demonstrates strong revenue growth paired with increasing asset turnover, indicating enhanced operational performance and efficiency. While total assets have grown overall, the dip in 2022 suggests some strategic adjustments with assets during that period. Subsequent recovery in asset levels combined with the rising asset turnover reinforces a positive trend in asset management. The consistent improvement in generating higher revenues from the asset base underscores the segment's effectiveness in expanding its business internationally.

Capital Expenditures

There is a consistent upward trend in capital expenditures over the observed periods. The additions to property and equipment increased from US$2,186 million in 2019 to US$3,725 million in 2024. This represents a substantial growth of approximately 70% over five years, indicating a significant investment in the segment's fixed assets.

Depreciation and Amortization

Depreciation and amortization expenses also displayed a steady increase, rising from US$1,126 million in 2019 to US$1,730 million in 2024. This reflects growing expenses likely correlated with the expanding asset base, consistent with the increases in capital expenditures.

Capital Expenditures to Depreciation Ratio

The ratio of segment capital expenditures to depreciation fluctuated slightly but showed an overall increasing pattern from 1.94 in 2019 to 2.15 in 2024. This suggests that capital spending has generally been outpacing the depreciation expense, implying ongoing asset growth and expansion relative to the rate at which assets are being depreciated.

Overall Insights

The data reveals a strategic emphasis on asset growth within the United States operations, with capital expenditures consistently exceeding depreciation charges. This trend indicates reinvestment and expansion rather than portfolio contraction or maintenance. The steady increase in depreciation confirms the aging and accumulation of fixed assets. The rising capital expenditures to depreciation ratio further highlights an aggressive asset base augmentation strategy over the examined time frame.

Additions to property and equipment

The additions to property and equipment showed fluctuations over the observed periods. Initially, there was a decrease from 303 million USD in 2019 to 258 million USD in 2020. This was followed by a moderate increase to 272 million USD in 2021. A significant rise occurred in 2022, reaching 388 million USD, the highest value within the time frame. However, it declined again to 281 million USD in 2023 before increasing to 351 million USD in 2024. Overall, the trend indicates variability with peaks and troughs but a general incline toward the latter years.

Depreciation and amortization

Depreciation and amortization expenses exhibited a steady increasing trend throughout the period. Starting at 143 million USD in 2019, this figure gradually rose each year, reaching 192 million USD in 2024. The incremental growth suggests ongoing capital asset usage and amortization consistent with additions to property and equipment.

Segment capital expenditures to depreciation (ratio)

The ratio of segment capital expenditures to depreciation experienced notable changes over the years. It started relatively high at 2.12 in 2019, then decreased progressively to a low of 1.54 in 2021. In 2022, the ratio rebounded sharply to 2.16, signifying greater capital expenditures relative to depreciation that year. This was again followed by a decline to 1.54 in 2023, then an increase to 1.83 in 2024. The ratio's fluctuation reflects periods where capital expenditures outpaced depreciation and other periods of more balanced or lower capital investments relative to asset depreciation.

Additions to property and equipment

The additions to property and equipment show some fluctuation over the analyzed periods. Starting at 509 million USD in the fiscal year ending September 2019, the amount slightly decreased to 492 million USD in 2020. A notable increase occurred in 2021, with additions rising to 704 million USD and remaining relatively stable at 708 million USD in 2022. The figure continued to grow to a peak of 754 million USD in 2023 before declining to 634 million USD in 2024. Overall, this indicates periods of heightened investment interspersed with moderate reductions.

Depreciation and amortization

This expense consistently increased throughout the periods under review. Beginning at 223 million USD in 2019, depreciation and amortization rose each year, reaching 315 million USD by 2024. The steady upward trend reflects ongoing asset utilization and the accumulation of depreciable property within the segment.

Segment capital expenditures to depreciation ratio

The ratio of segment capital expenditures to depreciation presents a more variable pattern. Initially, the ratio was at 2.28 in 2019, dropping to its lowest point of 2.03 in 2020. Subsequently, it increased to 2.66 in 2021 but then declined somewhat to 2.49 in 2022. The ratio slightly increased again to 2.56 in 2023 before falling to 2.01 in 2024. This variability suggests changing investment intensity relative to asset depreciation, with a tendency toward lower capital expenditure relative to depreciation in the most recent year.