Is COST's EPS growth in 2025 sustainable long-term?

**Costco's EPS growth in 2025 is not currently forming a sustainable long-term pattern.** Here's the analysis to support this conclusion: 1. **Recent Performance**: Costco's EPS for Q2 2025 was $4.02, which missed analysts' consensus estimates of $4.09. This indicates a recent dip in earnings performance. 2. **Growth Rate**: The EPS growth rate for Costco in 2025 is not currently available. However, the diluted EPS growth rate is 9.21%, projected to grow from $18.03 to $19.69 per share. This suggests a positive outlook but does not guarantee long-term sustainability. |code|Ticker|Name|Date|Diluted EPS YoY|market_code| |---|---|---|---|---|---| |COST|COST.O|Costco Wholesale|2025 Q1|12.849162011173181|185| |COST|COST.O|Costco Wholesale|2025 Q2|2.5510204081632564|185| 3. **Challenges and Factors**: Costco faces challenges such as increased competition in the gas sector, where gas prices have dropped, affecting its gas station revenue. Additionally, the company has increased membership prices, which could impact membership fee revenue. These factors may put pressure on long-term EPS growth. 4. **Financial Ratios**: The company's net profit margin ratio has shown improvement from Q4 2024 to Q1 2025 but has deteriorated from Q1 2025 to Q2 2025. This fluctuating trend in profitability suggests potential instability in EPS growth. |code|Ticker|Name|Date|Total Revenue QoQ|Total Revenue YoY|market_code| |---|---|---|---|---|---|---| |COST|COST.O|Costco Wholesale|2024 Q2||5.746752071798213|185| |COST|COST.O|Costco Wholesale|2024 Q3||9.072099612287504|185| |COST|COST.O|Costco Wholesale|2024 Q4||0.9602351182558684|185| |COST|COST.O|Costco Wholesale|2025 Q1|-22.015885165062674|7.529542033599197|185| |code|Ticker|Name|Date|Net Profit Margin YoY|Net Profit Margin|market_code| |---|---|---|---|---|---|---| |COST|COST.O|Costco Wholesale|2024 Q2|11.117571810675658|2.8665|185| |COST|COST.O|Costco Wholesale|2024 Q3|13.405811425182831|2.8686|185| |COST|COST.O|Costco Wholesale|2024 Q4|11.486772690515606|2.8952|185| |COST|COST.O|Costco Wholesale|2025 Q1|5.23061254183034|2.893|185| |code|Ticker|Name|Date|Interest Expenses|Interest Expenses YoY|market_code| |---|---|---|---|---|---|---| |COST|COST.O|Costco Wholesale|2024 Q2|4.1E7|20.588235294117645|185| |COST|COST.O|Costco Wholesale|2024 Q3|4.1E7|13.88888888888889|185| |COST|COST.O|Costco Wholesale|2024 Q4|4.9E7|-12.5|185| |COST|COST.O|Costco Wholesale|2025 Q1|3.7E7|-2.631578947368421|185| |code|Ticker|Name|Date|Diluted EPS QoQ|Diluted EPS YoY|market_code| |---|---|---|---|---|---|---| |COST|COST.O|Costco Wholesale|2024 Q2||18.787878787878793|185| |COST|COST.O|Costco Wholesale|2024 Q3||29.010238907849818|185| |COST|COST.O|Costco Wholesale|2024 Q4||8.847736625514397|185| |COST|COST.O|Costco Wholesale|2025 Q1|-23.629489603024574|12.849162011173181|185| 5. **Market Sentiment and Valuation**: Despite the challenges, Costco has a strong brand and resilient business model, with a loyal customer base and consistent store growth. However, the stock's high valuation, trading at a price-to-earnings ratio of 52, may indicate that high expectations are already priced in. In conclusion, while Costco's EPS growth in 2025 is positive, the lack of long-term data and the presence of challenges suggest that the current growth rate may not be sustainable in the long term. Investors should monitor the company's performance closely and consider these factors when assessing the stock's long-term prospects.