Costco posts fiscal third-quarter revenue growth as membership renewals support outlook

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Costco Q3 revenue growth

Highlights

Costco fiscal Q3 total revenue rises 11.6% year over year to $70.53 billion, surpassing expectations of $69.81 billion, with adjusted EPS up 15.2% to $4.93.
Comparable sales climb 9.8%, driven by a 2.4% traffic increase and 7.3% ticket growth, while digital comparable sales surge 21.5% as e-commerce and app traffic jump 37%.
Paid memberships reach 82.9 million, up 4.1%; Costco opens four new warehouses in Q3 with 2026 openings forecast at 26, slightly down as two shift to fiscal 2027.

Quarter metrics and membership trends

As reported by CNBC Investing, Costco says total revenue in its fiscal 2026 third quarter rises 11.6% year over year to $70.53 billion, above Wall Street expectations of $69.81 billion based on LSEG estimates. Adjusted earnings per share in the 12 weeks ended May 10 increase 15.2% to $4.93, in line with expectations, while membership fee income grows 10.7% to $1.37 billion, slightly ahead of FactSet estimates.

Total comparable sales increase 9.8% in fiscal Q3, accelerating from 7.4% in the prior quarter. The gain is driven by a 2.4% rise in traffic and a 7.3% increase in ticket size, although adjusted comparable sales growth, excluding foreign exchange and gasoline prices, slows slightly to 6.6% and adjusted ticket growth reaches 4.2%. Digitally enabled comparable sales jump 21.5%, or 20.8% on an adjusted basis, as e-commerce site and app traffic increases 37% from a year earlier.

Paid members total 82.9 million, up 4.1% year over year but below expectations. Executive memberships, the higher-priced tier, reach 41.2 million, up 9.6% from a year earlier and up from 40.4 million in the prior quarter, while the worldwide renewal rate holds at 89.7% and the U.S./Canada renewal rate edges up to 92.2%.

Consumer value demand and expansion plans

Chief Executive Ron Vachris says on the post-earnings call that Costco records all-time fuel volume highs during the quarter as supply disruptions linked to the Iran war keep prices near four-year highs. He says each four-week fiscal period sets a company volume sales record, with the final five weeks becoming the retailer's top five volume weeks ever, and adds that many members buy Costco gas for the first time in the quarter.

The company indicates that stronger fuel traffic can support warehouse spending because members using its gas stations typically spend more in stores. Gross margin contracts 17 basis points year over year to 11.02%, but excluding the effect of gas prices it increases by 1 basis point, while operating margin improves from the year-ago period.

Costco opens four new warehouses in the quarter and plans 12 more in the final quarter of fiscal 2026. The retailer now expects 26 openings this fiscal year, down from the 28 targeted in the prior quarter because two openings shift into fiscal 2027, and management says annual openings are set to rise to more than 30 globally in coming years.

Gap’s lowered fiscal 2026 sales outlook highlighted how budget-conscious U.S. shoppers are pulling back on discretionary purchases, especially in apparel, as inflation and uncertainty pressure household spending. Our earlier coverage also noted that, despite weaker sales expectations, Gap lifted its profit guidance on cost support and trade-related relief, showing how retailers are trying to protect margins even as demand softens.

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