News & Deep Analysis
COST

Costco Q2 FY2026: Revenue Up 9.1%, Profit Up 13.8%

Published: March 5, 2026
COSTCO WHOLESALE CORP /NEW

Direct News

  • Date: 2026-03-05 — Costco (COST) reported Q2 FY2026 results.
  • Net sales increased 9.1% year-over-year in Q2 FY2026.
  • Profit (net income) rose 13.8% year-over-year in Q2 FY2026.

Historical Context

This Q2 FY2026 report follows a sequence of strong fiscal results and shareholder actions in FY2025 and early FY2026: on 2025-12-11 Costco reported significant Q1 revenue and earnings growth with strong digital sales performance; on 2025-10-15 the company declared a quarterly cash dividend; and on 2025-09-25 Costco reported a significant increase in Q4 and full‑year revenue and net income. The Q2 FY2026 sales and profit increases on 2026-03-05 can be viewed as a continuation of the momentum reported across those prior periods, set against the structural profile and risks disclosed in the FY2025 filings.

What the Q2 results signify

Costco’s reported Q2 FY2026 growth — sales up 9.1% and profit up 13.8% year-over-year — signals continued top-line expansion alongside improved profitability for the quarter. These headline gains should be read in the context of Costco’s low-margin, high-volume membership warehouse model, where membership revenue and turnover drive recurring cash flow and support thin retail margins. The company’s fiscal year runs to the Sunday closest to August 31 (FY2026 ends August 30, 2026), so this Q2 result sits in the middle of the FY2026 reporting cycle.

Financial profile and revenue mix (FY2025 context)

Costco’s FY2025 scale provides context for the Q2 performance. For the fiscal year ended August 31, 2025, total revenue was $254,453 million and net income attributable to Costco was $8,099 million, with diluted EPS of $18.21. Costco operated 914 warehouses as of August 31, 2025, and employed approximately 341,000 people. Revenue mix in FY2025 was concentrated in Foods and Sundries (40.6% of net sales), Non‑Foods (25.6%), Fresh Foods (13.7%), and Warehouse Ancillary and Other (20.0%). E‑commerce (digital sales fulfilled via warehouses and Costco Travel) represented roughly 10% of total net sales. Executive members — who earn a 2% reward — drove about 73.6% of worldwide net sales in FY2025. These structural elements (membership penetration, high volumes, and a concentrated product mix) frame how quarterly sales and profit trends translate into longer‑term performance.

Geography and operating income breakdown

Operating income in FY2025 was concentrated in the United States (U.S. operating income $6,217M, ~67% of operating income), Canada ($1,648M, ~18%), and Other International markets ($1,420M, ~15%). The U.S. remains the dominant revenue and profit driver (roughly 78.6% of total revenue), with Canada and other international operations making up the remainder. The geographic footprint and operating-income mix help explain sensitivity to U.S. consumer demand and regional cost trends.

Risks highlighted in filings

Costco’s SEC filings identify multiple risk vectors that remain relevant when evaluating quarterly results. Legal risks include active class actions (wage and hour claims, product liability suits) and data privacy litigation; regulatory risks include tax examinations and potential pharmacy/insurance receivable disputes; macro risks include inflation/deflation impacts on inventories (LIFO-related charges were recorded in FY2025) and foreign-exchange volatility (AOCI losses reported). Some contingencies have probable estimable accruals; others are immaterial or unestimable per the filings.

Management posture and near-term strategy

Filings do not lay out a quantified three‑year plan, but the company’s operating playbook remains clear: expand warehouse footprint, grow e‑commerce (already about 10% of net sales), and increase executive membership penetration. Costco continued to raise compensation levels (U.S./Canada entry-level $20/hour as of March 2025; FY2025 average hourly $32), a factor in operating costs. Warehouse openings, membership renewal rates (92.9% U.S./Canada; 90.5% worldwide in FY2025), and supply‑chain volume economics are core levers management cites in forward‑looking statements.

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