10-QPeriod: Q3 FY2026

COSTCO WHOLESALE CORP /NEW Quarterly Report for Q3 Ended May 10, 2026

Filed June 3, 2026For Securities:COST

Summary

Costco Wholesale Corporation (COST) reported robust financial results for the third quarter and the first 36 weeks of fiscal year 2026, demonstrating continued growth and operational efficiency. Net sales saw a significant increase of 12% to $69.2 billion for the quarter, driven by a strong 10% increase in comparable sales and contributions from newly opened warehouses. Membership fees also rose by 11% to $1.4 billion, reflecting successful member acquisition and retention strategies, including the impact of recent membership fee increases in the U.S. and Canada. Profitability metrics showed positive trends, with diluted earnings per share (EPS) reaching $4.93 for the quarter, a notable increase from $4.28 in the prior year. This growth was supported by improved gross margins, which, when excluding the impact of gasoline price inflation, increased by one basis point, and a slight decrease in selling, general, and administrative (SG&A) expenses as a percentage of net sales. The company's effective tax rate also decreased to 25.4% from 26.2% in the prior year quarter, further contributing to net income growth. The balance sheet remains strong, with total assets growing to $86.4 billion and total equity increasing to $33.5 billion, reflecting solid financial health and capacity for continued investment.

Financial Highlights

48 data points
Beta

Revenue

$70.53B

12.8% Gross Margin

Net Income

$2.19B

3.1% Net Margin

EPS (Diluted)

$4.93

Total Assets

$86.43B

Cash & Equivalents

$18.95B

Free Cash Flow

$2.04B

Financial Statements
Beta
Revenue$70.53B
Cost of Revenue$61.52B
Gross Profit$9.01B
SG&A Expenses$6.19B
Operating Income$2.81B
Interest Expense$32.00M
Net Income$2.19B
EPS (Basic)$4.94
EPS (Diluted)$4.93
Shares Outstanding (Basic)443.92M
Shares Outstanding (Diluted)444.43M

Key Highlights

  • 1Total revenue for the 12 weeks ended May 10, 2026, increased by 12% to $70.5 billion compared to $63.2 billion in the prior year period.
  • 2Diluted earnings per share (EPS) for the 12-week period rose to $4.93, a significant increase from $4.28 in the same period last year.
  • 3Membership fees increased by 11% to $1.37 billion for the 12-week period, indicating strong member loyalty and growth.
  • 4Comparable sales for the company increased by 10% for the 12-week period, excluding the impact of foreign currency and gasoline price changes, showcasing underlying business strength.
  • 5Capital expenditures were $4.2 billion for the first 36 weeks of the fiscal year, with plans to spend approximately $6.5 billion in fiscal 2026, signaling continued investment in growth initiatives.
  • 6The company returned $1.8 billion to shareholders through dividends and $603 million through share repurchases in the first 36 weeks of the fiscal year, demonstrating a commitment to shareholder returns.
  • 7Cash and cash equivalents stood at $18.9 billion as of May 10, 2026, providing substantial liquidity.

Frequently Asked Questions

The primary driver of Costco's revenue growth was a strong increase in comparable sales, which rose by 10%, alongside contributions from the 23 net new warehouses opened since the end of the third quarter of fiscal year 2025. Higher gasoline prices and favorable foreign currency movements also positively impacted net sales.

Costco's profitability improved significantly, with net income increasing to $2.19 billion from $1.90 billion in the prior year's third quarter. This resulted in a higher diluted earnings per share of $4.93, up from $4.28. This improvement was supported by gross margin expansion (excluding gasoline impact) and a decrease in SG&A expenses as a percentage of net sales.

Costco plans to invest approximately $6.5 billion in capital expenditures for fiscal year 2026, focusing on new warehouse openings, remodels, depot network expansion, and digital business development. The company continues to return capital to shareholders through dividends and share repurchases, with $1.8 billion paid in dividends and $603 million used for share repurchases in the first 36 weeks of the fiscal year.

Costco is involved in various legal proceedings, including class actions related to wage and hour claims, privacy law violations, and product labeling. While the company has recorded immaterial accruals for some matters, it states that it does not believe any pending claim, proceeding, or litigation, individually or in aggregate, will have a material adverse effect on its financial position, results of operations, or cash flows. However, it acknowledges the possibility of unfavorable outcomes that could be material to an individual fiscal quarter or year.