NEW YORK, May 29, 2026, 12:04 EDT
- Costco stock dropped 4.6% to trade at $948.95 in late-morning action. The SPDR S&P 500 ETF Trust was up 0.2%.
- Costco posted an 11.6% jump in net sales for the fiscal third quarter, but the market didn’t react much to the revenue surprise.
- Costco saw higher gasoline demand, better digital sales, and more membership fees. Margin pressure and valuation stayed in focus.
Costco Wholesale shares fell Friday, dropping 4.6% to $948.95 in late-morning trading. The retailer topped fiscal third-quarter sales forecasts but that wasn’t enough to hold up a stock that investors had bid up with high expectations. The decline came as the SPDR S&P 500 ETF Trust edged higher.
That’s an issue for Costco, which is still at about 49 times earnings, based on the latest P/E ratio. That kind of valuation doesn’t leave much space for anything but good news. The price-to-earnings ratio takes the share price and divides it by earnings per share. The higher the number, the more investors are betting on future growth.
Costco reported net sales rose 11.6% to $69.15 billion for the 12 weeks ended May 10. Total revenue, which includes membership fees, was $70.53 billion. Net income climbed to $2.19 billion, or $4.93 per diluted share, compared with $1.90 billion, or $4.28 a share, a year ago.
The report wasn’t bad, just messy. Analysts polled by FactSet looked for earnings of $4.98 a share and $69.68 billion in revenue, according to Investor’s Business Daily. Sales topped that, but profit fell short.
Comparable sales were up 9.8%. Stripping out gasoline price changes and currency moves, comparable sales rose 6.6%. Digitally enabled comparable sales jumped 21.5%.
Fuel made a bigger impact for Costco this quarter. CEO Ron Vachris said the last five weeks were the company’s best-ever for sales volume. CFO Gary Millerchip told investors Costco had “widened our gaps in terms of price” at the pump because fuel prices were “very high on our members’ minds.” Reuters
Membership was still a solid pillar. Millerchip said membership fee income climbed 10.7% to $1.37 billion. Costco finished the quarter with 82.9 million paid members, including 41.2 million paid executive memberships. Renewal rates came in at 92.2% for the U.S. and Canada, 89.7% worldwide.
Costco, Walmart updates show cautious consumer, faster delivery pace
The latest numbers were mixed. Reuters said last week that Walmart topped sales forecasts but flagged that shoppers are still feeling inflation. Costco’s update pointed to a customer focused on saving, especially at the pump. Costco is also stepping up delivery as Walmart and Amazon race to speed up shipping, with Vachris saying U.S. same-day delivery now averages under 45 minutes.
Bryan Hayes, a stock strategist at Zacks Investment Research, said Costco’s latest move on pricing is “classic Costco,” but he also said it means “gross margin line could face modest near-term pressure” as the company puts loyalty above rate. Gross margin is what a retailer keeps after subtracting what it paid for goods. Reuters
But the risk side is pretty clear. Higher oil prices mean more expensive transport and could push up prices for plastic-heavy goods and some apparel. Costco has also pointed to tariffs, global conflicts, competition, wage pressures and rising consumer debt as possible headwinds. If membership growth slows or price cuts go deeper, defending the stock’s premium multiple could get tougher.
May sales are up next for Costco, expected out June 3, the company’s investor calendar shows. Investors are looking to see if adjusted comps keep up the mid-single-digit pace and if fuel shoppers are now buying more inside the warehouse, not just boosting the top line with lower-margin fill-ups.
