How strong was Costco's sales growth in the first quarter of fiscal 2026?

Net sales grew 8.2% to $65.98 billion, and total company comparable sales rose 6.4%. Excluding gasoline price and foreign exchange effects, comparable sales were also 6.4%, suggesting that underlying demand, not just fuel prices or currency movements, drove the increase. Growth was led by Canada and Other International on an adjusted basis, while the U.S. grew 5.9%.

Did Costco's profitability improve, and what affected reported earnings?

Yes. Net income increased 11.3% to $2.00 billion and diluted EPS rose to $4.50 from $4.04. Reported results benefited from a $72 million tax benefit tied to stock-based compensation, which was smaller than the $100 million benefit in the prior-year quarter. Excluding these items, net income and EPS growth would have been about 13.6%. Gross margin rose 4 basis points to 11.32%, and SG&A was roughly flat as a share of sales at 9.60%.

What is driving membership and digital growth?

Membership fee income grew 14.0%, supported by 81.4 million paid memberships and a 92.2% renewal rate in the U.S. and Canada. Digitally-enabled comparable sales rose 20.5%, driven by e-commerce traffic growth of 24% and a 13% increase in average order value. Management cited personalized product recommendations, improved product pages, and better search as contributors. These trends suggest a growing, recurring revenue base and expanding digital engagement.

Are there any balance sheet or liquidity concerns investors should note?

Inventory increased to $21.1 billion from $18.1 billion at fiscal year-end, and accounts payable rose to $23.5 billion, which is a normal seasonal pattern for a retailer ahead of holiday selling but warrants monitoring. Operating cash flow of $4.69 billion was strong, and cash and equivalents increased to $16.2 billion. Long-term debt was stable at about $5.7 billion, and capital expenditures rose to $1.53 billion, reflecting continued warehouse expansion.

Did Costco provide new guidance in this filing?

No. The 8-K furnishes the first quarter fiscal 2026 operating results and supplemental information under Item 2.02 without issuing new numerical guidance. The only forward-looking figures are the estimated warehouse count of 942 at fiscal year-end 2026, along with standard safe harbor language about risks such as economic conditions, tariffs, and competition.

COST 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed December 11, 2025. Cited figures are marked; the original filing is the authoritative source.

Costco reported first quarter fiscal 2026 results (twelve weeks ended November 23, 2025) with net sales up 8.2% to $65.98 billion^a and total revenue up roughly 8.3% to $67.31 billion, driven by strong comparable sales growth of 6.4% at the total-company level.

Excluding the effects of gasoline prices and foreign exchange, comparable sales were also 6.4%^b, with U.S. comps at 5.9%, Canada at 9.0% adjusted, and Other International at 6.8% adjusted. Digitally-enabled comparable sales grew 20.5%, and comparable traffic rose 3.1% while ticket rose 3.2%, indicating growth from both more transactions and larger baskets. Profitability improved modestly.

Operating income rose 12.2% to $2.46 billion^c, and net income increased 11.3% to $2.00 billion, or $4.50 per diluted share versus $4.04 a year earlier. Results included a $72 million ($0.16 per share) stock-based compensation tax benefit, compared with $100 million ($0.22 per share) last year. Excluding these benefits, net income and diluted EPS growth would have been about 13.6%.

Membership fee income grew 14.0%, supported by 81.4 million paid memberships (up 5.2%), a 89.7% worldwide renewal rate, and a 92.2% U.S./Canada renewal rate. Gross margin was 11.32%, up 4 basis points, and SG&A was 9.60% of sales. Balance sheet and cash flow data show a substantial build in merchandise inventories to $21.1 billion^d from $18.1 billion at fiscal year-end, with accounts payable rising to $23.5 billion, and operating cash flow of $4.69 billion versus $3.26 billion a year earlier.

Capital expenditures increased to $1.53 billion, and the company ended the quarter with $16.2 billion in cash. The company operated 923 warehouses and expects to end fiscal 2026 with an estimated 942 locations. This 8-K furnishes information under Item 2.02 and does not contain new guidance or forward-looking financial targets beyond the safe harbor language.

02—Key points

Key Highlights

Net sales rose 8.2% to $65.98 billion; total revenue rose to $67.31 billion including $1.33 billion in membership fees (up from $1.17 billion).
Total company comparable sales grew 6.4% (6.4% adjusted for gasoline and FX), with U.S. at 5.9%, Canada at 6.5% reported / 9.0% adjusted, and Other International at 8.8% reported / 6.8% adjusted.
Digitally-enabled comparable sales grew 20.5%, with e-commerce site traffic up 24% and average order value up 13%.
Diluted EPS of $4.50 rose from $4.04 (up 11.4%); excluding the stock-based compensation tax benefits, EPS growth was about 13.6%.
Membership engine remained strong: paid memberships reached 81.4 million (+5.2%), total cardholders 145.9 million (+5.1%), and the worldwide renewal rate was 89.7%.
Inventory rose to $21.1 billion from $18.1 billion at fiscal year-end, while operating cash flow increased to $4.69 billion from $3.26 billion.
Warehouse count reached 923, with management estimating 942 by fiscal year-end 2026, including 21 additional openings over the rest of the year.

03—Questions

Frequently Asked Questions

How strong was Costco's sales growth in the first quarter of fiscal 2026?
Net sales grew 8.2% to $65.98 billion, and total company comparable sales rose 6.4%. Excluding gasoline price and foreign exchange effects, comparable sales were also 6.4%, suggesting that underlying demand, not just fuel prices or currency movements, drove the increase. Growth was led by Canada and Other International on an adjusted basis, while the U.S. grew 5.9%.
Did Costco's profitability improve, and what affected reported earnings?
Yes. Net income increased 11.3% to $2.00 billion and diluted EPS rose to $4.50 from $4.04. Reported results benefited from a $72 million tax benefit tied to stock-based compensation, which was smaller than the $100 million benefit in the prior-year quarter. Excluding these items, net income and EPS growth would have been about 13.6%. Gross margin rose 4 basis points to 11.32%, and SG&A was roughly flat as a share of sales at 9.60%.
What is driving membership and digital growth?
Membership fee income grew 14.0%, supported by 81.4 million paid memberships and a 92.2% renewal rate in the U.S. and Canada. Digitally-enabled comparable sales rose 20.5%, driven by e-commerce traffic growth of 24% and a 13% increase in average order value. Management cited personalized product recommendations, improved product pages, and better search as contributors. These trends suggest a growing, recurring revenue base and expanding digital engagement.
Are there any balance sheet or liquidity concerns investors should note?
Inventory increased to $21.1 billion from $18.1 billion at fiscal year-end, and accounts payable rose to $23.5 billion, which is a normal seasonal pattern for a retailer ahead of holiday selling but warrants monitoring. Operating cash flow of $4.69 billion was strong, and cash and equivalents increased to $16.2 billion. Long-term debt was stable at about $5.7 billion, and capital expenditures rose to $1.53 billion, reflecting continued warehouse expansion.
Did Costco provide new guidance in this filing?
No. The 8-K furnishes the first quarter fiscal 2026 operating results and supplemental information under Item 2.02 without issuing new numerical guidance. The only forward-looking figures are the estimated warehouse count of 942 at fiscal year-end 2026, along with standard safe harbor language about risks such as economic conditions, tariffs, and competition.

04—Continue

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