01—Abstract
Summary
Summary of the 10-Q filed December 17, 2025. Cited figures are marked; the original filing is the authoritative source.
Costco Wholesale Corporation (COST) reported solid financial results for the first quarter of fiscal year 2026, ending November 23, 2025.
The company demonstrated robust top-line growth with total revenue increasing by 8% year-over-year to $67.3 billiona, driven by an 8% rise in net sales and a significant 14% increase in membership fee revenue. This growth was supported by an 8% increase in net sales, fueled by comparable sales growth and the contribution of 25 net new warehouses opened since the prior year. Diluted earnings per share rose to $4.50 from $4.04 in the comparable prior-year period, reflecting improved profitability.
The company's financial health remains strong, with substantial operating cash flow generation and a healthy liquidity position. Costco continues its strategic expansion, opening eight new warehouses in the quarter, with plans for 25 more.
The consistent membership fee growth underscores customer loyalty and provides a stable revenue stream. While facing typical retail pressures such as rising costs and competition, Costco's ability to drive comparable sales through increased shopping frequency and average ticket, combined with disciplined expense management, positions it favorably for continued performance.
02—Key points
Key Highlights
- Total revenue grew 8% to $67.3 billion for the 12 weeks ended November 23, 2025, compared to $62.2 billion for the same period last year.
- Net income increased to $2.001 billion ($4.50 per diluted share) from $1.798 billion ($4.04 per diluted share) in the prior year's quarter.
- Membership fee revenue saw a substantial 14% increase, reaching $1.329 billion, indicating strong member retention and growth.
- Comparable sales increased by 6% year-over-year, with contributions from both increased shopping frequency and average ticket size.
- Costco opened eight new warehouses (seven net new) in the quarter, contributing to overall sales growth, and plans to open 25 more in the remainder of fiscal 2026.
- The company maintained strong operating cash flow, generating $4.688 billion during the quarter, reflecting operational efficiency.
- A quarterly cash dividend of $1.30 per share was declared, up from $1.16 per share in the prior year's comparable quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Costco Wholesale Corp kept $0.03.
- Revenue$67.31B100.0%
- Cost of revenue−$58.51B86.9%
- Gross profit$8.80B13.1%
- Operating costs−$6.33B9.4%
- Operating income$2.46B3.7%
- Interest, other & tax−$462.0M0.7%
- Net income$2.00B3.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed December 17, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $67.31B$62.15B | +8.3% |
| Cost of Revenue | $58.51B$54.11B | +8.1% |
| Gross Profit | $8.80B$8.04B | +9.4% |
| SG&A Expenses | $6.33B$5.85B | +8.3% |
| Operating Income | $2.46B$2.20B | +12.2% |
| Interest Expense | $35.00M$37.00M | −5.4% |
| Net Income | $2.00B$1.80B | +11.3% |
| EPS (Basic) | $4.51$4.05 | +11.4% |
| EPS (Diluted) | $4.50$4.04 | +11.4% |
| Shares Outstanding (Basic) | 443.96M443.99M | 0.0% |
| Shares Outstanding (Diluted) | 444.51M444.89M | −0.1% |
05—Questions
Frequently Asked Questions
What were the main drivers of Costco's revenue growth in this quarter?
Costco's revenue growth was primarily driven by an 8% increase in net sales, which benefited from comparable sales growth of 6% and sales from newly opened warehouses. Membership fee revenue also played a significant role, increasing by 14% due to membership fee adjustments and new member acquisitions.
How is Costco managing its expenses in the current retail environment?
Costco's Selling, General, and Administrative (SG&A) expenses as a percentage of net sales remained relatively stable, increasing by only one basis point. This indicates effective cost management despite pressures from factors like increased preopening costs and a tax assessment charge, which were offset by favorable impacts from central operating costs, stock compensation, and warehouse operations.
What is the outlook for new warehouse openings?
Costco opened eight new warehouses (seven net new) in the first quarter of fiscal 2026 and plans to open an additional 25 new warehouses, including four relocations, throughout the remainder of the fiscal year. This expansion strategy is a key component of their growth.
How did the company's profitability change compared to the prior year?
Profitability improved significantly, with net income rising to $2.001 billion, a 11.3% increase from $1.798 billion in the prior year. This translated to diluted earnings per share of $4.50, up from $4.04, reflecting improved operational performance and revenue growth.
06—Continue