10-Q · June 3, 2026
Costco's Q3 2026 results showed strong growth, reporting revenue of $70.53 billion and EPS of $4.93, both exceeding analyst expectations. Notably, comparable sales were up 10%, driven by increased membership fees of 11%…
Earnings analysis · 10-K
COST earnings analysis
Filed October 7, 2026 · Our reading of the company's report
The latest report
Costco delivered a strong 2026, with total revenue up 10% to $303.154 billion, diluted EPS up 14% to $20.76, comparable sales up 8%, and digitally enabled comparable sales up 21%. Membership growth, high renewal rates,…
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Costco delivered a strong 2026, with total revenue up 10% to $303.154 billion, diluted EPS up 14% to $20.76, comparable sales up 8%, and digitally enabled comparable sales up 21%. Membership growth, high renewal rates, warehouse expansion, and the low-cost limited-assortment model continue to reinforce the company’s competitive positioning, while operating cash flow rose to $15.817 billion. The principal offsets are heavy dependence on U.S. and Canadian operations, increasing AI and cybersecurity complexity, and uncertainty surrounding tariff refunds and related litigation.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $20.76
What stood out
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Strong three-year revenue and EPS growth
Total revenue increased 10% to $303.154 billion in 2026 from $275.235 billion in 2025 and $254.453 billion in 2024. Net income rose 14% to $9.226 billion, while diluted EPS increased to $20.76 from $18.21 and $16.56 in the prior two years.
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Broad-based comparable-sales momentum
Comparable sales increased 8% in 2026, driven by a 5% increase in average ticket and 3% higher shopping frequency. Digitally enabled comparable sales increased 21%, highlighting continued momentum in e-commerce and digital engagement.
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Membership economics remain a key moat
Membership fee revenue increased 11% to $5.907 billion. Paid members reached 84.1 million versus 81.0 million in 2025, Executive members reached 42.3 million, and renewal rates were 92.3% in the U.S. and Canada and 89.8% worldwide.
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Disciplined warehouse expansion
Costco opened 28 warehouses, including three relocations, resulting in 25 net new warehouses and 939 total locations. Management plans up to 33 new warehouses in fiscal 2027, including five relocations, supporting continued market-share expansion.
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Improving cash generation
Operating cash flow increased to $15.817 billion from $13.335 billion in 2025 and $11.339 billion in 2024. The filing attributes the 2026 increase to higher operating income, faster inventory turns, and improved supplier payment terms.
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Structural low-cost operating model
The company’s low-cost warehouse model is supported by less than 4,000 active SKUs per warehouse, direct supplier purchasing, cross-docking, rapid inventory turnover, and Kirkland Signature private-label products. Costco operated 939 warehouses and 774 gas stations worldwide at the end of 2026.
What to watch
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High geographic concentration
The U.S. and Canada represented 86% of net sales and 83% of operating income in 2026, with California alone contributing 26% of U.S. net sales. A slowdown in these concentrated markets could materially affect results.
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Evolving AI and cyber threats
The filing highlights expanding AI and cybersecurity exposure, including risks of unauthorized data access, data leakage, inaccurate AI outputs, and third-party governance failures. Costco states that it has experienced cybersecurity incidents and threats, although no identified incident had materially affected the company as of the filing date.
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Tariff refunds and related litigation
Tariff-related litigation has become a material new exposure: four class actions were filed in March 2026 seeking refunds of IEEPA tariffs passed through to members, and a motion to dismiss in one case was denied on July 17, 2026. Costco received $184 million of IEEPA refunds during 2026 and an additional $155 million after year-end, creating both legal and margin-related uncertainty.
Management's outlook
No annual revenue or EPS guidance was provided. Quantitative operating plans include approximately $7.5 billion of fiscal 2027 capital expenditures and up to 33 new warehouses, including five relocations.
Earlier filings 4
10-Q · March 11, 2026
Costco reported a strong second quarter (12 weeks) with total revenue of $69,597 million, up $5,874 million (+9.2%) versus the prior-year quarter, and diluted EPS of $4.58, up $0.56 (≈13.9%). Gross margin and operating…
10-Q · December 17, 2025
Costco reported first-quarter fiscal 2026 revenue of $67,307 million, up $5,156 million (+8.3%) versus the prior-year quarter, with diluted EPS of $4.50 versus $4.04 a year earlier. Gross margin on total revenue…
10-Q · June 5, 2025
Costco reported third-quarter net sales of $61,965 million and total revenue of $63,205 million (amounts per filing in millions), driving net income of $1,903 million and diluted EPS of $4.28 for the 12 weeks ended May…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.