Costco issues a lukewarm quarter, but delivers on the metric that matters most Costco reported fiscal Q3 revenue of $70.53 billion, surpassing Wall Street’s expectations, and adjusted EPS in line with forecasts. Membership fee income also exceeded estimates, with a slight increase in the U.S./Canada renewal rate, which remained stable globally at 89.7%. Despite total paid members falling slightly short of expectations, traffic growth decelerated while comparable ticket size growth accelerated, indicating consumers are seeking value, with record gas sales contributing significantly.

• Total revenue increased 11.6% year over year to $70.53 billion, exceeding expectations.
• Adjusted EPS rose 15.2% to $4.93, meeting expectations.
• Membership fee income grew 10.7% to $1.37 billion, slightly exceeding estimates.
• U.S./Canada membership renewal rate ticked higher, holding steady globally at 89.7%.
• Executive tier memberships increased to 41.2 million, with strong adoption in China.
• Record gas sales were driven by high prices and consumer demand for discounts.
• Total comparable sales rose 9.8%, with traffic up 2.4% and ticket size up 7.3%.
• Digitally-enabled comparable sales increased 21.5% on an adjusted basis.
• Gross margin contracted 17 basis points year over year but was flat excluding gas prices.
• Costco opened four new warehouses in the quarter and plans for 12 more in the current fiscal quarter, with global openings to exceed 30 per year in the coming years.
• The company has 928 locations worldwide.