Costco's GAAP EPS of $4.50 surpasses estimates by $0.22, with revenue of $67.31B exceeding expectations by $190M.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 11 2025
0mins
Should l Buy COST?
Source: SeekingAlpha
Earnings Performance: Costco reported FQ1 GAAP EPS of $4.50, exceeding expectations by $0.22, with revenue of $67.31 billion, an 8.2% year-over-year increase, beating estimates by $190 million.
Stock Movement: Following the earnings announcement, Costco's shares increased by 0.63%.
Global Operations: The company operates 923 warehouses across various countries, including 633 in the U.S. and Puerto Rico, and has e-commerce sites in multiple regions.
Upcoming Conference Call: A conference call to discuss the earnings results is scheduled for December 11, 2025, at 2:00 p.m., available via webcast on their investor relations website.
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Analyst Views on COST
Wall Street analysts forecast COST stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 1007.770
Low
769.00
Averages
1061
High
1205
Current: 1007.770
Low
769.00
Averages
1061
High
1205
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Analyst Adjustments: Over the past three months, analysts have raised EPS estimates 20 times and lowered them 6 times, while revenue forecasts saw 19 upward revisions and 4 downward revisions, indicating improving market sentiment and investor confidence ahead of the earnings report.
- Sales Growth: In fiscal Q1, Costco's total sales rose 8.2% to $66 billion, with comparable sales increasing 6.4%, and momentum has continued into the current quarter with a 7.1% rise in comparable sales in January, showcasing strong customer traffic and high membership renewal rates.
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- Beauty Product Upgrade: Target will launch a 'Beauty Studio' in over 600 stores, replacing its partnership with Ulta Beauty, focusing on prestige beauty brands to attract younger consumers and boost sales.
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- Analyst Adjustments: Over the past three months, analysts have raised EPS estimates 20 times and lowered them 6 times, while revenue forecasts saw 19 upward revisions and 4 downward revisions, indicating improving market sentiment and investor confidence ahead of the earnings report.
- Sales Growth: In fiscal Q1, Costco's total sales rose 8.2% to $66 billion, with comparable sales increasing 6.4%, and momentum has continued into the current quarter with a 7.1% rise in comparable sales in January, showcasing strong customer traffic and high membership renewal rates.
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See More
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Implications for Importers: This ruling, stemming from a case brought by Atmus Filtration, may lead to refunds for other importers affected by similar tariff impositions.
See More
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- Product Line Overhaul: At an investor meeting in Minneapolis, Target announced plans to revamp key categories like home and apparel to address four consecutive quarters of declining customer traffic, with an expected 2% year-over-year increase in net sales this fiscal year.
- Grocery Expansion: Target plans to double the square footage dedicated to groceries during store remodels, with grocery sales reaching $24.14 billion last year, accounting for 23% of the company's net sales, highlighting the category's critical role in driving customer traffic.
- Beauty Product Upgrade: Target will launch a 'Beauty Studio' in over 600 stores, replacing its partnership with Ulta Beauty, which is expected to attract more young shoppers and enhance beauty sales, the latter accounting for 13% of overall net sales in the most recent fiscal year.
- Home Goods Reconstruction: Target aims to rebuild its home goods category over the next few years, planning to redesign 75% of its home decor products to counter a nearly 7% sales decline, striving to regain its market position in this sector.
See More
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- Strong Revenue Expectations: Analysts forecast Costco's Q2 revenue to reach $69.28 billion, up 4.4% from $63.72 billion last year, indicating the company's consistent ability to exceed revenue estimates over the past five quarters, showcasing its competitive strength in the market.
- Earnings Growth: Expected earnings per share are projected at $4.54, a 12.9% increase from $4.02 in the same quarter last year, reflecting steady improvement in profitability and further solidifying investor confidence in the company's financial health.
- Positive Analyst Ratings: Bank of America Securities has a Buy rating on Costco with a price target of $1,185, highlighting its strong positioning in the current K-shaped economy, particularly through its Kirkland private label which enhances supplier leverage and protects margins.
- Impressive Sales Data: Costco set multiple sales records during the holiday season, including 4.5 million pies sold before Thanksgiving and over $250 million in non-food online orders, indicating robust consumer demand that could positively impact the overall retail and consumer staples sectors.
See More
Target Revamps Merchandise Strategy to Attract Shoppers
- Merchandise Strategy Overhaul: Target plans to revamp its merchandise strategy over the next year, expecting net sales to rise about 2% compared to last year, addressing the challenge of four consecutive quarters of declining customer traffic.
- Fresh Food Expansion: The company will expand the square footage dedicated to fresh foods, planning to double the space in over half of its remodeled stores, aiming to attract more customers for one-stop shopping.
- Beauty Product Upgrade: Target will launch a 'Beauty Studio' in over 600 stores, replacing its partnership with Ulta Beauty, focusing on prestige beauty brands to attract younger consumers and boost sales.
- Home Goods Reconstruction: With home goods sales declining nearly 7% year-over-year, Target plans to rebuild the display area for these products over the next few years, expecting to redesign 75% of its home decor items to regain market competitiveness.
See More
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- Membership Model Advantage: Costco stands out in the retail market with its unique membership model, boasting nearly 1,000 stores and $280 billion in annual sales, maintaining a leading position despite competition from BJ's and Walmart.
- High Customer Satisfaction: With renewal rates exceeding 90%, Costco's executive members account for nearly half of total membership yet contribute 74% of total sales, highlighting the critical role of membership in profitability.
- Stable Sales Growth: For the first quarter of fiscal 2026 (ending November 23, 2025), Costco reported an 8.2% year-over-year sales increase, with a 14% rise in fee income and a 5.2% membership growth, demonstrating resilience in a high-inflation environment.
- Increasing Market Concerns: Despite Costco's reliable growth, the market is worried about the sustainability of sales growth, particularly with a slight dip in renewal rates and a premium P/E ratio of 54, significantly above the three-year average of 49, potentially limiting short-term stock price upside.
See More
