Costco keeps printing money — in bulk

Costco $COST just did the most Costco thing possible. It reported another quarter of very impressive, very steady growth — and did it without breaking the “no surprises” brand promise that has turned the warehouse club into a market-cap religion. Amid all the market chaos, the warehouse club quietly keeps doing what it does best: selling a lot of stuff, moving a lot of people through its doors, and letting membership fees turn madness into margin.

For Q2 FY 2026, Costco said net sales rose 9.1% to $68.24 billion, while net income climbed to $2.04 billion, or $4.58 per diluted share. Total revenue, which adds in the part investors actually tattoo over their hearts — membership fees — came in at $69.6 billion. Membership fees themselves were $1.36 billion, up about 14% from a year ago, and operating income grew to $2.61 billion. That’s a touch better than the drumbeat heading into today, when analysts were broadly looking for $4.55 EPS on $69.3 billion in revenue, with same-store sales (excluding gas) up 5.88%.

Costco keeps selling the hot dog combo and the 40-pack of paper towels, but the model keeps behaving like a subscription business.

Comparable sales for the quarter were up 7.4% companywide, with “digitally-enabled” sales up 22.6%, a reminder that Costco’s e-commerce operation is a meaningful second register. Strip out gasoline and foreign exchange, and comps were still up 6.7%, with digitally-enabled up 21.7%. The U.S. did what the U.S. usually does for Costco: steady, mid-single-digit growth. Canada and “Other International” did what they’ve been doing lately: reminding everyone that Costco’s brand travels.

Costco also bundled in its February sales update. For the four-week period ending March 1, net sales rose 9.5% to $21.69 billion, with total company comps up 7.9% (7% adjusted). That “Other International” category was a headline-grabber at 17.9% in February — though Costco flagged that the later timing of Lunar and Chinese New Year this year (19 days later) boosted that region by about four percentage points and total company sales by about half a point. 

Under the hood, the company is still doing the same math it always does: Protect the value proposition, let volume do the heavy lifting, and let membership fees fatten the margins. Over the first 24 weeks of fiscal 2026, membership fees totaled $2.68 billion, total revenue hit $136.9 billion, and operating cash flow came in at $7.68 billion. Costco also kept returning cash the Costco way, reporting $419 million in share repurchases and $1.15 billion in dividends paid over that period.

Thursday’s print mostly confirms what the market already suspects: Costco can grow in a careful economy without breaking character. What investors will want to see is the stuff hiding inside the clean comps — membership dynamics, expense pressure, and how management is thinking about freight, fuel, and tariffs. Costco’s risk language explicitly flags “geopolitical conditions (including tariffs)” alongside energy and commodities, which is corporate-speak for “the world still ships goods on actual oceans.”

Treasury Secretary Scott Bessent said recently that the U.S. will likely raise its temporary global tariff rate to 15% “this week.” Costco’s earnings release doesn’t linger on that policy mess, but the exposure is real; about one-third of the products the company sells in the U.S. are imported.

Tariffs aren’t some abstract “macro headwind” for Costco. In December, Costco sued the U.S. government to preserve its ability to collect tariff refunds if the Supreme Court rejected President Donald Trump’s “Liberation Day” tariffs. On Feb. 20, the court did. Now, Penn-Wharton Budget Model economists estimate that more than $175 billion in U.S. tariff collections could be subject to refunds. Around 2,000 importers have already sued in the trade court as everyone tries to lock in their place in line, and Trump himself predicted, “We’ll end up being in court for the next five years.”

Meanwhile, Target $TGT just reported a quarter where comparable sales fell 2.5%, and net sales were down 1.5%, even as it tried to sell the market on a brighter 2026. That’s the kind of quarter that says consumers are still showing up, but they’re editing the cart in real time.

Kroger, meanwhile, looks like it’s trying to win on groceries’ most reliable superpower: repetition. It reported identical sales without fuel up 2.4% in the quarter, total company sales of $34.7 billion, and adjusted e-commerce sales up 20%. It also went cautious and guided to 1% to 2% identical sales (without fuel) in 2026 — which is what a mature grocery business says when it’s aiming for “steady” and praying for “predictable.” And BJ’s, the closest warehouse-club comp, just reported comparable club sales up 1.6%, or 2.6% excluding gasoline, with membership fee income up 10.9% to $129.8 million — solid, but not Costco-speed. 

Costco’s advantage is that it gets paid for loyalty upfront, then uses scale to make “value” feel like a feature instead of a slogan. It’s basically saying: Prices are annoying, life is expensive, and if you’d like to cope with all of that, you can do so with a 48-pack of something and a membership card.