Key Points:
- Q1 beat: $67B revenue, $2B profit.
- Growth drivers: Online +20%, memberships up.
- Investor caution: Valuation tempers reaction.
Costco reported a strong start to its fiscal year with first-quarter results that surpassed market expectations. For the 12-week quarter ending November 23, 2025, the company posted net sales of nearly $66 billion, marking an 8% increase from the previous year. Total revenue rose to more than $67 billion, reflecting continued momentum across the retailer’s global operations. Comparable sales grew by more than 6% overall, with the U.S. market achieving close to 6% growth and international regions performing even better.
Net income reached roughly $2 billion, up from $1.8 billion a year earlier, with earnings per share rising to $4.50 exceeding analysts’ forecasts. Digital momentum remained a bright spot, with online comparable sales jumping more than 20%, signaling Costco Q1 Earnings strengthened its presence in e-commerce and its ability to capture shifting consumer behaviors.
Despite the strong numbers, the company’s stock saw slight movement in after-hours trading. Analysts suggested that heightened investor expectations and Costco’s already elevated valuation played a role in the muted market response. Even so, the earnings beat reinforced Costco’s reputation for stability and consistency in an uncertain economic environment.
Holiday Demand, Renewed Store Traffic, and Membership Gains
The quarter benefited significantly from holiday-season footfall, strong demand for value-oriented essentials, and increased sales across categories, including groceries, electronics, home goods, and seasonal items. Costco’s food court, bakery, and prepared foods divisions saw particularly high volumes during the Thanksgiving period, further boosting quarterly performance.
Membership trends also supported the company’s growth. Both paid and executive memberships increased compared to last year, highlighting the continued appeal of Costco’s subscription-driven model. While the company noted a slight dip in renewal rates, largely attributed to an increase in online sign-ups, it emphasized that overall retention remains among the highest in the retail sector.
Costco Q1 Earnings ended with 923 warehouses worldwide and continued to strengthen its international footprint, particularly in Australia, Mexico, and Asia. Membership fee income, a high-margin segment of Costco’s financial structure, also rose during the quarter, offering a stable revenue cushion even as the broader retail environment faces inflationary pressures and shifting consumer spending patterns.
Strategic Focus, Market Sentiment, and Outlook
Market reaction to the strong quarterly performance remained muted, as investors weighed Costco’s high valuation against concerns about moderating comparable-sales growth and rising operational costs. Some analysts also pointed to macroeconomic factors such as tightening household budgets and ongoing supply chain adjustments as elements that could shape Costco’s performance in the coming quarters.
The company continues to focus on long-term growth through warehouse expansion, digital investment, and supply-chain modernization. While Costco Q1 Earnings reaffirmed its expansion strategy, it acknowledged that construction delays in some international markets have prompted adjustments to its near-term opening schedule. The retailer is also pursuing legal avenues to manage tariff-related cost pressures, reflecting a proactive approach to navigating complex regulatory environments.
Looking ahead, Costco’s leadership emphasized the company’s commitment to competitive pricing, strong member value, and operational efficiency. With a solid quarter behind it and steady demand heading into the new fiscal year, Costco remains positioned as one of the most resilient performers in the global retail landscape.
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