Costco Stock Earnings Reports

Costco reported strong Q2 FY2026 results: net income rose ~14% to $2.035B ($4.58 per diluted share) on net sales of $68.24B (up 9.1%). Company-wide comparable sales were +7.4% (6.7% ex gas and FX); digitally‑enabled comps grew ~22.6% (21.7% ex FX). Traffic increased ~3.1% and average transaction rose ~4.2% (3.5% ex gas/FX). Membership income increased 13.6% to $1.355B (driven by fee increases, member growth and executive upgrades); paid members reached 82.1M and executive members 40.4M. Gross margin was modestly higher (reported +17 bps; core-on-core +22 bps) while SG&A was slightly higher (worse by 13 bps) driven in part by increased liability reserves. CapEx was $1.29B in Q2 with full-year CapEx expected ~ $6.5B to support a pipeline of warehouse openings, remodels, depot expansion and digital investments. Warehouse growth: 4 openings in the quarter, 924 total globally; company expects ~28 net new openings in FY26 and is targeting 30+ annually thereafter. Key operational themes: active tariff management (sourcing/country moves, Kirkland ramp, domestic sourcing), continued price reductions on select commodities, rollout of in-warehouse digital improvements (mobile wallet, pharmacy pay-ahead, employee pre-scan, automated pay stations) and personalization online (personalized carousels drove >$470M ecommerce sales in Q2). Pharmacy, food court and optical grew strongly; fresh and bakery performed well while egg and certain commodity deflation weighed on food comps. Digital traffic surged (site +32%, app +45%), and same-day delivery partners continue fast growth. Risks noted: tariff/IEEPA refund uncertainty, potential supply/shipping disruptions from geopolitical events, FX and gas price volatility. Management emphasized reinvestment in the business, member value, and cautious but sustained expansion internationally and domestically.