TLDR
- Q2 EPS came in at $4.58, beating the $4.55 estimate; revenue hit $69.6 billion vs. the $69.3 billion forecast
- Comparable-store sales rose 7.4%, with digitally enabled comps surging 22.6%
- Net income climbed nearly 14% year-over-year to $2.035 billion
- Membership fee income grew 13.6% to $1.355 billion; total paid members reached 82.1 million
- COST stock is up 14% year-to-date but slipped 0.2% in premarket trading after the report
Costco delivered a clean earnings beat for its fiscal second quarter of 2026, with results coming in above analyst expectations across most key metrics. Net income rose nearly 14% year-over-year to $2.035 billion, or $4.58 per diluted share, topping the $4.55 consensus estimate.
$COST (Costco Wholesale) #earnings are out: pic.twitter.com/5cZEKU2mcq
— The Earnings Correspondent (@earnings_guy) March 5, 2026
Revenue came in at $69.6 billion, slightly ahead of the $69.3 billion projection. Comparable-store sales rose 7.4% overall, or 6.7% adjusted for gasoline price deflation and foreign exchange.
That’s an improvement from the December quarter, when adjusted comps grew 6.4%. Monthly data also points to momentum — comps rose 7% in December, 7.1% in January, and 7.9% in February.
Costco Wholesale Corporation, COST
The digital side of the business stood out. Digitally enabled comparable sales jumped 22.6%, with site traffic up 32% and app traffic up 45% for the quarter. Personalized product recommendation carousels alone drove over $470 million in e-commerce sales.
COST stock was down 0.2% in premarket trading on Friday after the results, though it remains up 14% year-to-date — on pace to recover all of last year’s losses.
Membership and Margins Hold Steady
Membership fee income rose 13.6% year-over-year to $1.355 billion. About one-third of that growth came from the September 2024 fee increase in the U.S. and Canada. Excluding the fee hike and FX, membership income still grew 7.5%.
Total paid members reached 82.1 million, up 4.8% from a year ago. Executive memberships hit 40.4 million, up 9.5%. The worldwide renewal rate held at 89.7%, unchanged from last quarter.
The U.S. and Canada renewal rate dipped 10 basis points sequentially to 92.1%, a trend management linked to online signups — which renew at slightly lower rates than in-warehouse signups.
Gross margin improved to 11.02% from 10.85% a year ago. Core-on-core margins were up 22 basis points, with gains across food, non-food, and fresh categories. SG&A ticked up slightly to 9.19% of sales from 9.06% last year, partly due to a rise in general liability reserves.
Tariffs, Expansion, and What’s Next
CEO Ron Vachris said the tariff picture remains “extremely fluid.” Recently eliminated IEEPA tariffs have been replaced by new global tariffs for at least the next 150 days. Costco filed a suit in the Court of International Trade to protect its right to refunds if those tariffs were struck down — which they were in February.
Vachris said the company did not pass the full tariff costs on to members in many cases. If refunds come through, the plan is to return value through lower prices and better deals. The company already lowered prices on eggs, cheese, coffee, certain paper products, and some tariff-affected items like textiles and cookware.
The company ended the quarter with 924 warehouses worldwide. It expects 28 net new openings in fiscal 2026 and is targeting 30-plus new openings per year going forward. Full-year CapEx is projected at around $6.5 billion.
For February, net sales came in at $21.69 billion, up 9.5% year-over-year. Total comparable sales rose 7.9% for the month (7.0% adjusted). Digitally enabled sales were up 21.8%.
No special dividend was announced. The board said it would continue to review the possibility, but there were no plans to share at this time.
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