Costco has reported a notable rise in its fiscal second-quarter sales, surpassing analyst expectations.
The membership-based retailer recorded a 9% year-over-year increase in revenue, reaching $63.72 billion, according to consensus estimates from Visible Alpha. However, the company’s strong sales performance was clouded by lower-than-expected earnings.
Costco’s net income for the quarter was $1.79 billion, translating to $4.02 per share. This figure fell short of market expectations, despite being higher than the previous year’s income. The shortfall is attributed to an increase in merchandise costs, which also rose by 9% during the same period.
This quarter marks the second since Costco implemented a membership fee hike in September. Revenue from these membership fees saw a 7% increase, amounting to $1.19 billion. While executives have acknowledged the rise in fee revenue, they project the impact on profit margins to become more apparent in the latter half of this fiscal year and into 2026.
Following the earnings announcement, Costco’s shares declined by 1.5% in after-hours trading. Despite this drop, the stock has appreciated by about one-third over the past year, hitting record highs only last month.
The recent performance of Costco highlights a dynamic interplay between rising revenue and increased costs. While the sales figures demonstrate the retailer’s robust market presence, its earnings reveal underlying pressures. Investors will be keenly watching how Costco navigates cost challenges and continues to leverage its membership model in the evolving retail landscape.
