Costco Wholesale Corp. reported first‑quarter 2026 results on December 11, 2025, with revenue of $67.31 billion. The figure beat the majority of analyst estimates—most notably the $67.14 billion consensus—while falling short of the higher $68.51 billion estimate that some analysts had projected. The revenue increase of 8.2% year‑over‑year was driven by a 6.4% rise in comparable sales, with the U.S. segment up 5.9% and the global segment up 6.4%. Digitally‑enabled sales surged 20.5%, underscoring the strength of Costco’s omnichannel strategy.
The company’s diluted earnings per share reached $4.50, a $0.22 beat over the $4.28 consensus estimate and a $0.23 beat over the $4.27 estimate. The earnings outperformance was largely a result of disciplined cost management, a favorable mix shift toward higher‑margin categories such as fresh produce and meat, and the continued momentum of the Kirkland Signature private‑label brand, which grew faster than the overall business. CEO Ron Vachris highlighted the role of new warehouse openings, relocations, and productivity enhancements in sustaining revenue growth, while CFO Gary Millerchip noted that fresh‑sales growth in the meat department and the expansion of executive memberships contributed to the robust fee‑income growth of 14% to $1.33 billion.
Core merchandise gross margins increased 29 basis points in the fourth quarter of fiscal 2025, and in the first quarter of fiscal 2026 margins expanded 4 basis points year‑over‑year. The modest margin gain reflects Costco’s ability to maintain pricing power amid inflationary pressures and tariff costs, while still investing in digital capabilities and warehouse expansion. Operating income rose, supported by the margin improvement and the higher sales volume, although the company continued to invest heavily in its digital platform and new warehouse construction.
Management emphasized that the membership‑first model remains resilient. Vachris stated, “Our digital vision at Costco is to deliver a seamless experience that builds trust and loyalty with our members,” and reiterated the company’s commitment to competitive pricing. Millerchip added that the fee‑income growth was driven by a recent fee increase and upgrades to executive memberships. The company plans to open over 30 new warehouses annually, reinforcing its long‑term growth strategy.
Market reaction to the earnings was muted. After the release, the stock traded in a narrow range, with some reports noting a slight decline of 0.45% or 0.18% and others a modest increase of 1.15%. The subdued response reflects investors’ recognition that the results largely met high expectations, while the mixed revenue beat and the modest margin expansion tempered enthusiasm.
The earnings release signals that Costco’s membership model continues to generate stable fee income and that its digital expansion is delivering strong sales growth. The company’s ability to maintain margin expansion in a high‑cost environment suggests effective cost control and pricing power, positioning it well for continued growth in the coming quarters.
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