COST
COST
Costco Wholesale Corporation
$951.67
+$27.00 (+2.92%)
Mkt Cap: $422.05B
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Lower Prices Boost Volume: Costco Focuses on Member Value (COST Q3 2026 Earnings Call)

By Dr. Graph | Updated on Jun 23, 2026 | earnings

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Costco Wholesale Corporation drove double-digit sales and net income growth during the third quarter by leveraging its membership model and price authority to attract inflation-weary shoppers.

Member Frequency Drives Double-Digit Revenue and Net Income Growth

Costco reported net sales of $69.15 billion for the third quarter, which increased 11.6% year-over-year because of high customer demand. The retailer also delivered diluted earnings per share of $4.93 to indicate improved bottom-line profitability.

Capital Expenditures Target Pipeline Expansion and Infrastructure Remodeling

Gary Millerchip stated, "We estimate CapEx for the full year will be approximately $6.5 billion as we continue to invest in building a larger pipeline of new warehouses." To expand this pipeline, the company scheduled 26 net new openings during the fiscal year. These capital investments focus on warehouse expansions, store remodels, depot network upgrades, and digital updates.

Digital Platform and Pharmacy Segment Drive Strong Customer Engagement

Digitally enabled comparable sales grew 21.5% during the quarter as online engagement increased. This digital growth was bolstered by personalized product recommendation carousels, which contributed just under $0.5 billion of e-commerce sales. In the ancillary businesses segment, pharmacy led growth through high demand for prescription programs, while gas comparable sales rose in the positive high twenties.

Strategic Pricing Investments Highlight Core-on-Core Margin Trends

During the Q&A session, Gary Millerchip addressed gross margin performance, explaining that the core-on-core margins fell 9 basis points due to strategic price investments. These price investments were directed at lowering everyday prices on essential items, such as eggs and beef, to benefit members. Ron Vachris emphasized that these pricing decisions were strategic rather than reactionary to competitors, enabling the company to pass savings to members quickly.

Disclaimer: This report is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research or consult a qualified professional before investing. Past performance is not indicative of future results.

Frequently Asked Questions

What drove the growth in Costco's pharmacy business during the third quarter?
The pharmacy growth was driven by higher GLP-1 drug demand, the inclusion of Wegovy and Ozempic in the prescription program, and strong value on pet medications.
How many total paid members and cardholders did Costco have at the end of the third quarter?
Costco ended the quarter with 82.9 million total paid members and 148.5 million cardholders.
How did the membership renewal rates perform in the United States and Canada?
The renewal rate in the United States and Canada reached 92.2% at the end of the third quarter, showing a minor increase of 10 basis points from the prior quarter.

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