COST Nears $1,000 as Revenue Tops $70B and Record Gas Demand Strengthens Membership Growth

Costco Wholesale delivered another quarter of double-digit growth, pushing quarterly revenue above $70 billion for the first time as consumers flocked to its warehouses for lower fuel prices, value-focused shopping, and expanding digital services.

While shares slipped modestly after earnings, the results reinforced Costco’s position as one of the strongest operators in global retail. The company continues generating robust sales growth, record membership retention, and accelerating digital engagement even as consumer spending remains pressured by inflation, geopolitical uncertainty, and shifting shopping habits.

The latest quarter also highlighted a key theme emerging across retail in 2026: consumers may be spending more cautiously, but they continue gravitating toward value-oriented businesses with strong pricing power.

Costco Delivers Another Quarter of Double-Digit Growth

Costco reported fiscal third-quarter revenue of $70.53 billion, up 11.6% year over year and above Wall Street expectations.

Adjusted earnings per share came in at $4.93, while net income rose 15% to $2.19 billion.

Key highlights included:

• Revenue increased 11.6% to $70.53 billion
• Net income rose 15% to $2.19 billion
• Comparable sales increased 9.8%
• Membership fee income climbed 10.7%
• Digital comparable sales surged 21.5%
• Paid memberships grew 4.1% to 82.9 million
• Executive memberships increased 9.6% to 41.2 million

Traffic growth remained healthy at 2.4%, while average ticket size increased 7.3%, reflecting both higher spending and inflation-related price effects.

The company also maintained exceptional renewal rates:

• Worldwide renewal rate: 89.7%
• U.S. and Canada renewal rate: 92.2%

Those figures remain among the strongest in global retail and continue reinforcing Costco’s recurring-revenue model.

Record Gas Sales Become an Unexpected Growth Driver

One of the most surprising themes from the quarter was fuel demand.

CEO Ron Vachris said Costco recorded the five highest fuel-volume weeks in company history during the quarter as consumers searched for cheaper gasoline amid rising energy prices linked to geopolitical tensions in the Middle East.

Key fuel-related trends included:

• Record-breaking gasoline volumes
• Increased first-time gas station users
• Higher warehouse traffic linked to fuel purchases
• Strong member acquisition from fuel savings

Management noted that members who regularly purchase gas tend to spend more inside Costco warehouses, creating a powerful customer-retention cycle.

The fuel business is increasingly acting as both a profit driver and a customer acquisition tool.

Membership Economics Continue to Strengthen

Membership remains Costco’s most important competitive advantage.

The company generated $1.37 billion in membership fee income during the quarter, up 10.7% year over year.

Executive memberships continue expanding rapidly and now represent:

• 41.2 million memberships
• More than half of total membership fee revenue
• Costco’s highest-spending customer segment

This recurring revenue stream helps Costco maintain industry-leading pricing while supporting long-term earnings stability.

The model also provides significant protection during economic slowdowns.

Costco’s Digital Growth Accelerates

Costco’s digital business remains one of the retailer’s fastest-growing segments.

Digital comparable sales jumped 21.5%, while website and app traffic increased 37%.

Management highlighted strong performance across:

• E-commerce
• Mobile applications
• Pharmacy services
• Home furnishings
• Gold and jewelry

The digital momentum suggests Costco is successfully modernizing its business without sacrificing its warehouse-centric model.

Costco’s AI Strategy Is Different From Big Tech

While many companies are using AI to justify workforce reductions, Costco is taking a different approach.

CEO Ron Vachris recently said the retailer is using AI to improve employee productivity rather than eliminate jobs. The company has implemented AI tools across pharmacy, gas stations, accounting, and IT operations, but management continues emphasizing human decision-making and customer service.

That philosophy reflects Costco’s broader culture, which has historically emphasized employee retention, operational consistency, and long-term customer relationships.

Technical Analysis: Costco Remains in a Powerful Long-Term Uptrend

Technically, Costco remains one of the strongest charts in large-cap retail despite recent post-earnings volatility.

The stock continues trading near record highs after years of sustained institutional accumulation.

Key Technical Signals

• Shares remain near the $1,000 level
• Long-term uptrend remains intact
• Volume trends continue supporting institutional demand
• Defensive retail leadership remains strong
• Membership-driven earnings continue attracting investors

The modest post-earnings weakness appears more consistent with profit-taking than a significant deterioration in trend.

Moving Averages

Costco continues trading above all major moving averages:

• 20-day moving average: bullish
• 50-day moving average: bullish
• 200-day moving average: confirms long-term uptrend

The moving-average structure remains one of the strongest among large-cap consumer stocks.

Key Support and Resistance Levels for COST Stock

A sustained move above $1,030 could reinforce Costco’s longer-term bullish trend, while the $950 area remains an important support zone.

COST Stock Valuation Remains the Biggest Debate

The primary concern for investors is no longer growth.

It is valuation.

Costco currently trades at roughly 52 times earnings, significantly above most retail peers.

Bulls argue the premium is justified because of:

• Industry-leading membership economics
• Exceptional renewal rates
• Defensive business model
• Consistent earnings growth
• Strong balance sheet
• Global expansion opportunities

Critics counter that much of this strength is already reflected in the share price.

The stock’s rich multiple leaves little room for operational missteps.

Long-Term Outlook: Costco Remains a Retail Compounder

Costco’s long-term investment case remains remarkably intact.

The company continues benefiting from multiple structural advantages:

• Membership-driven recurring revenue
• Strong customer loyalty
• Global warehouse expansion
• Digital growth
• Fuel traffic advantages
• Scale-based pricing power

Management expects to open 26 warehouses this year and more than 30 annually in future years, creating additional growth opportunities.

While valuation may limit near-term upside, Costco remains one of the highest-quality businesses in retail. The company’s ability to generate double-digit revenue growth, maintain industry-leading renewal rates, and attract customers during periods of economic uncertainty continues making it one of the market’s most durable long-term compounders.