Costco Wholesale Corporation

NASDAQ Global Select
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Very Bullish +80

Costco Wholesale Corporation Reports Third Quarter and Year-To-Date Operating Results For Fiscal 2026

AI-generated analysis

📊 Costco's third quarter net sales rose 11.6% year-over-year to $69.15 billion, while the first 36 weeks saw an 9.6% increase to $203.37 billion.

📈 Comparable sales growth for the quarter was 9.8% globally, with digital channels driving a significantly higher 21.5% increase in the third quarter.

💰 Net income for the quarter reached $2.19 billion or $4.93 per diluted share, compared to $1.90 billion and $4.28 per share last year.

🔢 Membership fees contributed $1.373 billion in revenue for the quarter, adding to a total quarterly revenue of $70.5 billion.

🏪 The company currently operates 931 warehouses worldwide, including major hubs in the U.S., Canada, and Japan across its global network.

📉 Operating expenses totaled $6.2 billion in selling, general, and administrative costs plus $61.5 billion in merchandise costs for the quarter.

💵 Total assets grew to $86.4 billion as of May 10, 2026, with cash and cash equivalents reaching $18.9 billion.

🏦 Accounts payable increased to $22.4 billion, reflecting higher procurement activity amidst rising sales volumes.

📉 Adjusted comparable sales figures exclude impacts from gasoline prices and foreign exchange, showing underlying business strength.

📅 A conference call to discuss these operating results was scheduled for 2:00 p.m. PT on May 28, 2026.

⚠️ Management noted various risks including geopolitical conditions, inflation, supply chain disruptions, and rising employee costs.

🌍 International regions showed strong performance, with Canada posting a 10.7% comparable sales increase in the quarter.

💻 Digital-enabled sales grew at a rapid 21.5% rate during the third quarter compared to total company growth of 9.8%.

📉 The year-to-date operating income was $7.8 billion, up from $7.0 billion in the same period last year.

💼 Costco's balance sheet remains strong with short-term investments of $1.05 billion and receivables netting at $3.75 billion.

Bullish Signals
  • Net sales surged 11.6% year-over-year to $69.15 billion for the third quarter, demonstrating robust top-line growth.
  • Comparable sales expanded across all regions with Total Company growth of 9.8%, driven by strong performance in Canada (10.7%) and Other International (11.2%).
  • Digital engagement shows exceptional strength with Digitally-Enabled comparable sales reaching 21.5% for the quarter, exceeding historical trends.
  • Net income jumped significantly to $2.19 billion per share of $4.93 diluted, reflecting improved profitability and operational efficiency.
  • Total Revenue increased by 11.6% driven by both merchandise growth and membership fees which rose from $1,240 million last year to $1,373 million.
  • Operating income grew from $2,580 million to $2,938 million before interest, indicating strong core business performance.
  • The company continues to expand its global footprint with operations in 931 warehouses across diverse international markets including expansion presence in Mexico and Japan.
Risk Factors
  • Operating expenses grew significantly faster than revenue in the 36-week period, with merchandise costs rising by $15.9 billion to $180.7 billion versus only a $17.9 billion increase in net sales, indicating potential margin pressure.
  • Net income increased by $729 million ($2.19 billion vs $1.90 billion last year), but the company operates 931 warehouses globally, implying high fixed cost overhead that could be challenged if comparable sales growth moderates or economic conditions deteriorate as noted in forward-looking risks.
  • Forward-looking statements explicitly cite risks including rising costs associated with employees (health-care and wages), energy and commodities, geopolitical conditions (tariffs and global conflicts), and domestic/international economic conditions such as inflation or exchange rates that could materially affect future performance.
  • The company notes comparable sales figures exclude impacts from gasoline prices and foreign exchange; however, the volatility in these external factors represents a significant risk to actual underlying growth trends not fully captured in the headline metrics.
Full Analysis
Costco Wholesale Corporation reported strong third-quarter and year-to-date results for fiscal 2026, with net sales rising 11.6% in the quarter to $69.15 billion and growing 9.6% year-to-date to $203.37 billion. This growth was supported by robust comparable sales increases of 9.8% over the last twelve weeks and 7.9% for the first thirty-six weeks, driven particularly by digital channels which saw comparable sales jump 21.5% in the quarter. The company continues to expand its global footprint, operating 931 warehouses across the United States, Canada, Mexico, Japan, the UK, Korea, Australia, Taiwan, Spain, France, Sweden, China, Iceland, and New Zealand, alongside e-commerce sites in nine international markets. Financially, Costco delivered net income of $2.19 billion for the quarter, up from $1.90 billion the prior year, resulting in diluted earnings per share of $4.93 compared to $4.28 previously. On a year-to-date basis, net income reached $6.23 billion versus $5.49 billion last year, with diluted EPS increasing to $14.01 from $12.34. The company's balance sheet shows total assets growing to $86.43 billion as of May 10, 2026, up from $77.099 billion a year prior, bolstered by an increase in cash and cash equivalents to $18.946 billion. Operating expenses saw a slight increase relative to revenue growth, but operating income improved significantly, reaching $2.815 billion for the quarter and $7.884 billion year-to-date. In addition to retail growth, membership fees, a key revenue driver for Costco, increased from $1.240 billion to $1.373 billion in the third quarter and from $3.599 billion to $4.057 billion year-to-date. The company holds approximately 444 million shares outstanding, calculated on a diluted basis. Management expects to discuss these results further in an investor conference call scheduled for 2:00 p.m. Pacific Time today, May 28, 2026. While the release includes standard forward-looking statements regarding various risks including economic conditions, inflation, and geopolitical events, the core performance metrics indicate continued double-digit sales growth and expanding profitability as Costco executes its strategy across both physical and digital channels.