What impacted Costco's net profit in recent quarters?

Costco's net profit has been impacted by several factors in recent quarters:

1. Foreign Exchange Headwinds: In the second quarter of fiscal 2025, Costco's net income was affected by foreign exchange fluctuations, resulting in a $0.13/share impact. This was primarily due to challenges in its Canada and international operations.
2. Higher Merchandise Costs: Costco faced increased costs related to merchandise, which contributed to a higher cost of sales. This, in turn, impacted its net profit margin. Despite effective cost management and tax benefits, the company's net income rose by 13.2% to $1.8 billion, primarily driven by these increased costs.
3. Membership Fee Increase: Following a membership fee increase in September 2024, the company saw a 3% growth in membership fee revenue, contributing to the overall income. However, the impact of this increase is expected to be more pronounced over the next four fiscal quarters.
4. Tariff-Induced Inflation: The potential impact of tariffs on Costco's stock is a concern, particularly as the company sources approximately one-third of its U.S. sales from imported products. Tariffs on Chinese imports could lead to higher prices for certain products, potentially affecting demand and profit margins.

In summary, Costco's net profit has been influenced by a combination of factors including foreign exchange fluctuations, higher merchandise costs, the impact of membership fee increases, and potential tariff-induced inflation. These elements highlight the importance of effective cost management and resilient revenue growth in maintaining profitability.