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Costco (COST) · Q3 2026 results and valuation

Share price: $1087.61 · 2026-11-11

Costco operates a chain of membership-only big-box warehouse club retail stores. The company sells products including beef, poultry, organic produce, and wine to consumers in the United States and other international markets. Source: Wikipedia

Results Q3 2026 vs Q1 2026 · previous quarter · fiscal Q4 2026 · published 24 Sep 2026 and 28 May 2026

Net income up 36.8% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.

1 · Numbers

+36.8%

Net income vs Q1 2026

Outlook given

Net income 3.00B vs 2.19B

Revenue +35.7%

Against the same quarter last year (Q3 2025) it is +14.9% — part of the move on last quarter is seasonal.

Why Against the same quarter last year (+14.9%), net income rose mainly because of a nonrecurring benefit, while excluding this benefit, growth was driven by higher average transaction values, higher gross margin rates, and lower SG&A costs.

2 · How management spoke

Typical

Less upbeat than 54% of company calls

Answers to analysts: upbeat, in line with the script.

Similar to last call.

3 · What stood out

Costco's digitally enabled sales, including third-party delivery, exceeded $33 billion, representing an increase of more than 20%.

Valuation

Is Costco undervalued?

Reverse DCF. Free cash flow from the last full fiscal year (2026-08-30), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.

At 7.8% growth a year (3-year revenue growth), the model's fair value is $458.91 a share — the stock trades 137% above it. Today's price assumes 20.1% growth a year.

Current price

$1087.61

close of 2026-11-11

Market implies growth of i

+20.1% for 10 yrs

Fair value / share

$458.91

Buy below

$344.18

Price vs fair value

Overvalued 137%

Price vs buy-below price

Overvalued >200%

FCF growth / yr i Discount rate i Terminal growth i Margin of safety i

Official channels

The company's own website and social media accounts.

Read between the lines

Guidance

Costco targets a run rate of 30 net new warehouse openings a year to support future warehouse and e-commerce sales growth.
Figure

Costco reported top line sales growth of over 10% and expanded market share by deepening member loyalty and capturing a larger share of wallet.

Source quote
“We delivered top line sales growth of over 10% and expanded our market share by deepening member loyalty and capturing a larger share of wallet.”
Figure

Pharmacy sales grew nearly 20% due to expanding digital capabilities.

Source quote
“In pharmacy, sales grew nearly 20% as we continue to expanding our digital capabilities.”
Figure

Digitally enabled sales, which include third-party delivery, exceeded $33 billion and was an increase of more than 20%.
Figure

Excluding a nonrecurring benefit, net income and EPS rose 12.3% and 12.4% respectively from $2.61 billion or $5.87 per diluted share last year.

Source quote
“Excluding this nonrecurring benefit, net income and EPS were up 12.3% and 12.4%, respectively, from $2.61 billion or $5.87 per diluted share last year.”

4 more

Figure

The company plans approximately $7.5 billion in capital expenditure for fiscal year 2027.

Source quote
“For fiscal year 2027, we are planning approximately $7.5 billion in capital expenditure.”
Figure

Comparable sales in ancillary businesses increased by high 20s during the quarter, reflecting the growth of the company's non-core business segments.

Source quote
“In ancillary businesses, comp sales continue to be extremely strong, up high 20s during the quarter.”
Figure

Sales from personalized initiatives saw triple-digit growth in Q4 and 10% of all costco.com orders now include a personalized item.

Source quote
“Our approach is resonating well with members, leading to triple-digit growth in sales from personalized initiatives in Q4 and 10% of all costco.com orders now include a personalized item.”
Guidance

Costco plans to increase capital investment to target opening 30 new warehouses per year over the next 5 to 10 years to continue growing its warehouse footprint.

Tone

How upbeat the language was, compared with other companiesi. Dot: Q3 2026. Ring: Q1 2026.

Prepared remarks Typical (was restrained)

Answers to analysts Upbeat (was upbeat)

Script and answers carried a similar tone, so the script's message held up under questioning.

Sentences that drove the tone

“Our ancillary businesses also performed very well across the board with gas, pharmacy, and travel leading the way, all growing at a faster pace than our overall growth rate.”

“This increase is predominantly due to a growth in the pipeline of new warehouses as we target a run rate of 30 net new openings a year and the continuation...”

“We continue to see a shift in member shopping habits towards healthier packaged foods and protein items such as meat snacks, sardines, canned tuna and chicken as well as high-fiber...”

Full figures

USD · SEC EDGAR XBRL (10-Q, period end 2026-08-30)

Metric	Q3 2026period end 2026-08-30	Q1 2026period end 2026-05-10	Change	Q3 2025	YoY
Revenue	95.72B	70.53B	+35.7%	86.16B	+11.1%
Gross profit	12.19B	9.01B	+35.3%	11.12B	+9.7%
Operating income	3.80B	2.81B	+35.0%	3.34B	+13.8%
Net income	3.00B	2.19B	+36.8%	2.61B	+14.9%
EPS	6.75	4.93	+36.9%	5.87	+15.0%
P/E today 50.7	45.5	50.7	−5.2	51.8	−6.3

Topics

Most discussed now

Costco continues to see significant opportunities for new warehouses growth, including new U.S.
For the fiscal year, Costco opened 28 new warehouses, including 3 relocations for a total of 25 net new buildings.
There are also deflationary items like eggs and dairy and butter and cheese in particular.
As Ron also mentioned in some of the earlier comments, what Costco has also been pleased with in that membership growth...

Faded since Q1 2026

Fading Costco was also pleased to see that the renewal rate has sort of normalized, if you like, now as it...
Fading The high consumer price sensitivity, which fueled these record volumes, also drove many members to use Costco's gas stations for...
Fading Costco's average transaction or ticket was up 7.3% worldwide and 4.2%, excluding gas price inflation and changes in FX.
Fading That's a really positive dynamic in terms of impact and potential for future health and growth in terms of membership...

Latest announcements

Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.

2026-10-16 Director or officer change · SEC 8-K
The Board approved fiscal 2027 bonus criteria, including a $1.2 million base bonus for the CEO and $400,000 for other executive officers.
2026-10-14 Other events · SEC 8-K
Costco Wholesale Corporation declared a quarterly cash dividend of $1.47 per share, payable on November 13, 2026, to shareholders of record as of October 30, 2026.
2026-09-24 Results of operations · SEC 8-K
Net sales for the fiscal year reached $297.2 billion, an increase of 10.1 percent from $269.9 billion in the previous year.
2026-07-08 Other events · SEC 8-K
Costco reported net sales of $29.24 billion for the five weeks ended July 5, 2026, an increase of 10.6 percent from $26.44 billion last year, and declared a $1.47 quarterly dividend.
2026-05-28 Results of operations · SEC 8-K
Net sales for the third quarter were $69.15 billion, up 11.6 percent from $61.96 billion last year, while net income for the first 36 weeks reached $6.23 billion compared to $5.49 billion a year earlier.
2026-04-15 Other events · SEC 8-K
The Board of Directors approved a quarterly cash dividend increase from $1.30 to $1.47 per share, which equals $5.88 on an annualized basis.
2026-03-05 Results of operations · SEC 8-K
Net sales for the second quarter reached $68.24 billion, an increase of 9.1 percent from $62.53 billion in the same period last year.
2026-01-21 Shareholder vote results; Other events · SEC 8-K
Costco Wholesale Corporation declared a quarterly cash dividend of $1.30 per share and received shareholder approval for the election of directors and ratification of auditors.

Catalyst calendar

management-stated targets — from the latest earnings call; plans, not promises.

fiscal year 2027

opening of 33 warehouses

Source quote
“Our current plan is to open another 33 warehouses in fiscal year 2027, of which 5 are relocations as we build towards our goal of opening 30 net new warehouses per year.”
fiscal year '27

opening 4 buildings in Europe, 5 in Canada, and 1 in Mexico

Source quote
“For fiscal year '27, we are planning to open 4 buildings in Europe, 5 in Canada, and 1 in Mexico and have a strong pipeline of new warehouses planned for Asia, Australia, and other international markets in fiscal year '28.”
fiscal year 2027

planned capital expenditure

Source quote
“For fiscal year 2027, we are planning approximately $7.5 billion in capital expenditure.”
Beyond fiscal year 2027

slowing in the rate of capital expenditure growth

Source quote
“Beyond fiscal year 2027, we would expect to see a slowing in the rate of capital expenditure growth following 3 years of outsized growth that began in fiscal year 2025.”
starting this month

food court churro returning to all U.S. locations

Source quote
“For a limited time, the food court churro will be returning to all our U.S. locations starting this month.”