Costco (NASDAQ:COST) Posts Better-Than-Expected Sales In Q1 CY2026

Membership-only discount retailer Costco (NASDAQ:COST) reported Q1 CY2026 results

, with sales up 9.2% year on year to $69.6 billion. Its GAAP profit of $4.58 per share was 0.8% above analysts’ consensus estimates.

Is now the time to buy Costco?

Company Overview

Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $286.3 billion in revenue over the past 12 months, Costco is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. To expand meaningfully, Costco likely needs to tweak its prices or enter new markets.

As you can see below, Costco’s sales grew at a tepid 6.9% compounded annual growth rate over the last three years, but to its credit, it opened new stores and increased sales at existing, established locations.

This quarter, Costco reported year-on-year revenue growth of 9.2%, and its $69.6 billion of revenue exceeded Wall Street’s estimates by 0.8%.

Looking ahead, sell-side analysts expect revenue to grow 7.1% over the next 12 months, similar to its three-year rate. This projection is particularly healthy for a company of its scale and suggests the market sees success for its products.

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Store Performance

Number of Stores

A retailer’s store count often determines how much revenue it can generate.

Costco operated 924 locations in the latest quarter. It has opened new stores quickly over the last two years, averaging 2.9% annual growth, faster than the broader consumer retail sector.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Same-Store Sales

A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.

Costco has been one of the most successful retailers over the last two years thanks to skyrocketing demand within its existing locations. On average, the company has posted exceptional year-on-year same-store sales growth of 6.2%. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives Costco multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.

In the latest quarter, Costco’s same-store sales rose 7.4% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.

Key Takeaways from Costco’s Q1 Results

We were impressed by how significantly Costco blew past analysts’ gross margin expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EBITDA missed. Overall, this was a softer quarter. The stock remained flat at $982.52 immediately after reporting.

Big picture, is Costco a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy.