Costco New Zealand boosts revenue to $361 million, profit nears break even

Costco has released its annual results for the FY25 financial year, recovering from its big loss in 2023. Photo / Michael Craig

Wholesale retailer Costco has come close to breaking even in its second full financial year operating in New Zealand after boosting its revenue by $20 million.

The global business has one $100m-plus location on Auckland’s northwest fringes at Westgate which opened back in 2022.

For the 52 weeks ended September 1, 2024, Costco recorded total sales revenue of $361.5m , up by 6% compared to 2023’s $341m in revenue. It had a gross profit margin of 9.06%.

The business reported a net profit before tax of $833,000, a significant increase from its net loss before tax in 2023 of $20.5m.

However, income tax expenses of $1.76m mean the New Zealand location reported a total comprehensive loss of $929,000.

Costco New Zealand also incurred a tax liability of $9.32m due to the Government’s legislation to remove commercial building depreciation for tax purposes.

In 2024, inventories of $328.7m were recognised as an expense during the year and included as “cost of sales”, up from $320.1m in 2023.

A total of $461,400 write-off of inventories to net realisable value was recognised during the year, down from $534,930 the year prior.

Salary and benefit costs also declined compared to 2023, dropping from $20.6m in 2023 to $16.5m in 2024.

The store employs dozens of staff but unlike most retail operations, it has no warehouse. Instead, it delivers goods on pallets directly on to its shop floor, cutting out an expensive part of other retailers’ costs – storage and warehousing.

Costco has long been rumoured to open a second site in New Zealand following the success of its Westgate store, with former Australia and New Zealand country manager Patrick Noone suggesting Rolleston in Christchurch was possibly next on the list.

However, a social media fan page was formed, Costco Drury Community, tipping the South Auckland area as the site of the second store and showing photos of framing for a building rising.

“The second Costco warehouse has been earmarked to open in South Drury, 2026 at the earliest but exciting times ahead for sure,” that public group says.

However, multiple spokespeople for Costco have reiterated that they can’t confirm any future developments.

Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.