Costco Reports Strong Q2 2026 Earnings with Significant Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 06 2026
0mins
Source: Yahoo Finance
- Net Income Growth: Costco's net income for Q2 reached $2.035 billion, or $4.58 per diluted share, marking a nearly 14% increase from last year, demonstrating the company's ability to maintain profitability amid economic uncertainties, thereby boosting investor confidence.
- Sales Surge: The net sales for the second quarter amounted to $68.24 billion, a 9.1% year-over-year increase, with comparable sales rising by 7.4%, indicating sustained consumer demand for Costco's offerings and further solidifying its market leadership.
- Membership Revenue Increase: Membership fee income totaled $1.355 billion, up 13.6%, with about one-third of this growth attributed to the membership fee increase in September 2024, showcasing the company's successful strategies in attracting and retaining members.
- Strong Digital Sales: Digitally enabled sales grew by 22.6% year-over-year, reflecting Costco's ongoing efforts in digital transformation, particularly in enhancing personalized recommendations and online shopping experiences, which are expected to drive future sales growth.
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Analyst Views on COST
Wall Street analysts forecast COST stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 946.110
Low
769.00
Averages
1061
High
1205
Current: 946.110
Low
769.00
Averages
1061
High
1205
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Costco Continues Strong Same-Store Sales Performance
- Strong Earnings Report: Costco reported fiscal Q3 revenue of $69.15 billion, an 11.6% year-over-year increase, with adjusted earnings per share rising 15% to $4.93, demonstrating robust performance in the retail sector.
- Significant E-commerce Growth: Digital revenue surged by 21.5%, with app and website traffic increasing by 37%, and personalized recommendations driving e-commerce sales close to $5 billion, indicating a sustained consumer preference for online shopping.
- Membership Revenue Boost: Membership fee revenue rose 10.7% year-over-year to $1.37 billion, with paid memberships increasing by 4.1% to 82.9 million households, reflecting strong customer loyalty and appeal of the membership model.
- Valuation Challenges: Despite solid performance, Costco's forward P/E ratio is nearly 42 times, significantly higher than Amazon and Walmart, prompting investors to carefully consider the implications of its high valuation on future stock price potential.
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Walmart Stock Drops 12% Amid Consumer Pressure
- Strong Performance Yet Stock Decline: Despite Walmart's fiscal Q1 2027 report showing a 7.3% year-over-year revenue increase and a 4.1% rise in U.S. comparable sales, its stock fell 12% in May, reflecting market concerns about future consumer pressures.
- E-commerce Market Share Growth: Walmart's e-commerce sales surged 26% year-over-year, with U.S. deliveries up 45%, indicating a significant advantage in leveraging its 5,200 stores for order fulfillment, thereby enhancing its competitive position in the retail market.
- Consumer Pressure Evident: CEO John Furner noted that consumers, particularly lower-income shoppers, are feeling pressure and seeking value from Walmart, a trend that could impact future sales performance, especially amid rising fuel prices.
- Investor Confidence in Long-term Stability: Despite facing short-term pressures, Walmart's status as a
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- E-commerce Surge: Walmart's e-commerce sales increased by 26% year-over-year, with some global locations achieving deliveries in just 13 minutes, showcasing its competitive edge in a rapidly evolving retail landscape, even as consumer stress rises.
- Robust Financial Performance: In Q1 2027, Walmart reported a 7.3% year-over-year revenue increase, a 4.1% rise in U.S. comparable sales, a 5% increase in operating income, and earnings per share rising from $0.61 to $0.66, indicating strong profitability despite economic pressures.
- Market Share Growth: Deliveries in the U.S. surged by 45%, with 36% of store orders fulfilled within three hours, leveraging its network of 5,200 stores to further solidify its leadership position in the e-commerce market.
- Consumer Pressure Noted: Despite strong results, Walmart executives highlighted that lower-income consumers are feeling pressure, with rising fuel prices causing average fill-ups to drop below 10 gallons for the first time in four years, potentially leading to upward pressure on retail prices, prompting investors to watch for future earnings updates.
See More
Costco Reports Revenue Surge but Stock Declines
- Significant Revenue Growth: Costco's recent quarterly sales surged by 12% year-over-year, driven by consumers flocking to warehouses amid rising gas prices, yet the stock has declined over 6% in the past month, indicating market skepticism.
- Comparable Growth Rate Disappointment: The comparable store growth rate, excluding gas sales, was only 6.6%, falling short of analyst expectations of 6.7%, highlighting cautious consumer spending amid economic pressures despite the overall strong performance.
- Low Margin Gas Sales Impact: While rising oil prices attracted more traffic to Costco locations, the low margins on gas sales and the potential for demand to shift quickly if oil prices drop suggest limited growth opportunities in this segment for the retailer.
- Valuation Concerns: With Costco's stock trading at nearly 50 times its trailing revenue, despite solid business performance, the inflated valuation raises concerns for investors about future growth potential, making it less attractive unless there is a significant drop in valuation soon.
See More
Costco Reports Strong Earnings but Stock Declines
- Strong Sales Performance: Costco's fiscal Q3 revenue surged 11.6% year-over-year to $69.15 billion, with adjusted EPS rising 15% to $4.93, showcasing robust performance in e-commerce and gas station sales, despite a stock price decline due to high valuation concerns.
- Same-Store Sales Growth: Adjusted same-store sales increased by 6.6%, with U.S. sales up 6.8%, Canadian sales rising 6.2%, and international sales climbing 5.9%, indicating sustained consumer demand for Costco, particularly in fresh food and non-food categories.
- Membership Revenue Boost: Membership fee revenue grew 10.7% year-over-year to $1.37 billion, with paid memberships increasing by 4.1% to 82.9 million households, reflecting success in attracting and retaining members, while renewal rates reached 92.2% in North America.
- Expansion Plans on Track: Costco opened four new locations in the quarter and expects to add 12 more this fiscal year, totaling 26 new openings, bringing its global warehouse count to 928, indicating a continued commitment to its global expansion strategy.
See More
Costco's Strategy Against Price Increases
- Price Strategy Reflection: Former CEO Jim Sinegal resisted a 3% price increase across all items, despite executives believing customers would hardly notice, aiming to maintain Costco's low-price image and avoid losing customer trust.
- Stable Renewal Rates: Costco's fiscal 2024 report shows a membership renewal rate exceeding 92% in North America, highlighting an unusually strong customer loyalty amidst rising prices faced by most retailers.
- Unique Profit Model: By capping margins at 14% for national brands and 15% for Kirkland Signature items, Costco relies on annual membership fees to maintain lower prices, which not only reduces costs but also enhances consumer trust.
- Inflation Response Challenges: Although Costco raised membership fees for the first time in 2024 to address inflation pressures, its overall strategy remains focused on maintaining price stability without undermining customer trust, which is particularly crucial in the current economic climate.
See More
Costco Continues Strong Same-Store Sales Performance
- Strong Earnings Report: Costco reported fiscal Q3 revenue of $69.15 billion, an 11.6% year-over-year increase, with adjusted earnings per share rising 15% to $4.93, demonstrating robust performance in the retail sector.
- Significant E-commerce Growth: Digital revenue surged by 21.5%, with app and website traffic increasing by 37%, and personalized recommendations driving e-commerce sales close to $5 billion, indicating a sustained consumer preference for online shopping.
- Membership Revenue Boost: Membership fee revenue rose 10.7% year-over-year to $1.37 billion, with paid memberships increasing by 4.1% to 82.9 million households, reflecting strong customer loyalty and appeal of the membership model.
- Valuation Challenges: Despite solid performance, Costco's forward P/E ratio is nearly 42 times, significantly higher than Amazon and Walmart, prompting investors to carefully consider the implications of its high valuation on future stock price potential.
See More
Walmart Stock Drops 12% Amid Consumer Pressure
- Strong Performance Yet Stock Decline: Despite Walmart's fiscal Q1 2027 report showing a 7.3% year-over-year revenue increase and a 4.1% rise in U.S. comparable sales, its stock fell 12% in May, reflecting market concerns about future consumer pressures.
- E-commerce Market Share Growth: Walmart's e-commerce sales surged 26% year-over-year, with U.S. deliveries up 45%, indicating a significant advantage in leveraging its 5,200 stores for order fulfillment, thereby enhancing its competitive position in the retail market.
- Consumer Pressure Evident: CEO John Furner noted that consumers, particularly lower-income shoppers, are feeling pressure and seeking value from Walmart, a trend that could impact future sales performance, especially amid rising fuel prices.
- Investor Confidence in Long-term Stability: Despite facing short-term pressures, Walmart's status as a
See More
Walmart Reports Strong Q1 2027 Earnings Amid Consumer Stress
- E-commerce Surge: Walmart's e-commerce sales increased by 26% year-over-year, with some global locations achieving deliveries in just 13 minutes, showcasing its competitive edge in a rapidly evolving retail landscape, even as consumer stress rises.
- Robust Financial Performance: In Q1 2027, Walmart reported a 7.3% year-over-year revenue increase, a 4.1% rise in U.S. comparable sales, a 5% increase in operating income, and earnings per share rising from $0.61 to $0.66, indicating strong profitability despite economic pressures.
- Market Share Growth: Deliveries in the U.S. surged by 45%, with 36% of store orders fulfilled within three hours, leveraging its network of 5,200 stores to further solidify its leadership position in the e-commerce market.
- Consumer Pressure Noted: Despite strong results, Walmart executives highlighted that lower-income consumers are feeling pressure, with rising fuel prices causing average fill-ups to drop below 10 gallons for the first time in four years, potentially leading to upward pressure on retail prices, prompting investors to watch for future earnings updates.
See More
Costco Reports Revenue Surge but Stock Declines
- Significant Revenue Growth: Costco's recent quarterly sales surged by 12% year-over-year, driven by consumers flocking to warehouses amid rising gas prices, yet the stock has declined over 6% in the past month, indicating market skepticism.
- Comparable Growth Rate Disappointment: The comparable store growth rate, excluding gas sales, was only 6.6%, falling short of analyst expectations of 6.7%, highlighting cautious consumer spending amid economic pressures despite the overall strong performance.
- Low Margin Gas Sales Impact: While rising oil prices attracted more traffic to Costco locations, the low margins on gas sales and the potential for demand to shift quickly if oil prices drop suggest limited growth opportunities in this segment for the retailer.
- Valuation Concerns: With Costco's stock trading at nearly 50 times its trailing revenue, despite solid business performance, the inflated valuation raises concerns for investors about future growth potential, making it less attractive unless there is a significant drop in valuation soon.
See More
Costco Reports Strong Earnings but Stock Declines
- Strong Sales Performance: Costco's fiscal Q3 revenue surged 11.6% year-over-year to $69.15 billion, with adjusted EPS rising 15% to $4.93, showcasing robust performance in e-commerce and gas station sales, despite a stock price decline due to high valuation concerns.
- Same-Store Sales Growth: Adjusted same-store sales increased by 6.6%, with U.S. sales up 6.8%, Canadian sales rising 6.2%, and international sales climbing 5.9%, indicating sustained consumer demand for Costco, particularly in fresh food and non-food categories.
- Membership Revenue Boost: Membership fee revenue grew 10.7% year-over-year to $1.37 billion, with paid memberships increasing by 4.1% to 82.9 million households, reflecting success in attracting and retaining members, while renewal rates reached 92.2% in North America.
- Expansion Plans on Track: Costco opened four new locations in the quarter and expects to add 12 more this fiscal year, totaling 26 new openings, bringing its global warehouse count to 928, indicating a continued commitment to its global expansion strategy.
See More
Costco's Strategy Against Price Increases
- Price Strategy Reflection: Former CEO Jim Sinegal resisted a 3% price increase across all items, despite executives believing customers would hardly notice, aiming to maintain Costco's low-price image and avoid losing customer trust.
- Stable Renewal Rates: Costco's fiscal 2024 report shows a membership renewal rate exceeding 92% in North America, highlighting an unusually strong customer loyalty amidst rising prices faced by most retailers.
- Unique Profit Model: By capping margins at 14% for national brands and 15% for Kirkland Signature items, Costco relies on annual membership fees to maintain lower prices, which not only reduces costs but also enhances consumer trust.
- Inflation Response Challenges: Although Costco raised membership fees for the first time in 2024 to address inflation pressures, its overall strategy remains focused on maintaining price stability without undermining customer trust, which is particularly crucial in the current economic climate.
See More
