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AI Earnings Analysis
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $136.9B | $125.87B | +8.76% |
Cost of Revenue | $119.23B | $109.85B | +8.54% |
Operating Income | $5.07B | $4.51B | +12.34% |
Net Income | $4.04B | $3.59B | +12.55% |
EPS (Basic) | $9.09 | $8.08 | +12.50% |
EPS (Diluted) | $9.08 | $8.06 | +12.66% |
SG&A Expense | $12.61B | $11.51B | +9.53% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $83.64B | $73.22B | +14.22% |
Current Assets | $43.13B | $36.9B | +16.90% |
Total Liabilities | $51.55B | $47.65B | +8.20% |
Current Liabilities | $40.76B | $37B | +10.17% |
Stockholders' Equity | $32.09B | $25.58B | +25.45% |
Cash & Equivalents | $17.38B | $12.36B | +40.68% |
Long-Term Debt | $5.69B | $5.75B | -1.16% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $7.68B | $6.01B | +27.90% |
Investing Cash Flow | $-2.57B | $-2.01B | -27.95% |
Financing Cash Flow | $-1.9B | $-1.43B | -32.29% |
Dividends Paid | $1.15B | $515M | +124.08% |
Share Buybacks | $419M | $412M | +1.70% |
D&A | $1.19B | $1.1B | +8.55% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 3.7% | 3.6% | +0.12% |
Net Margin | 2.9% | — | — |
ROE | 12.6% | — | — |
ROA | 4.8% | — | — |
Current Ratio | $1.058 | — | — |
Debt to Equity | $1.607 | — | — |
Costco delivered a strong fiscal Q1 2026 with revenue of $136.9B (+8.8% YoY) and net income of $4.0B (+12.5% YoY), driven by robust membership and sales growth alongside improving operating leverage.
Revenue grew 8.8% YoY to $136.9B in Q1 2026 from $125.9B in Q1 2025, reflecting continued strength in comparable store sales and membership-driven traffic. This growth rate outpaced cost of revenue growth of 8.5%, signaling modest gross margin expansion.
Source: Source: 10-Q Income Statement
Operating income rose 12.3% YoY to $5.07B, with operating margin improving to 3.70% from 3.58% in the prior year period. This improvement indicates that revenue growth is flowing through to profitability at a faster rate than cost increases.
Source: Source: 10-Q Income Statement
Cash and equivalents surged 40.7% YoY to $17.4B, up from $12.4B a year ago. This was supported by operating cash flow of $7.68B (+27.9% YoY), reflecting strong working capital management and earnings quality.
Source: Source: 10-Q Balance Sheet & Cash Flow Statement
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Upgrade to unlockCostco operates on very thin operating margins of approximately 3.7%, characteristic of the warehouse club model. Any unexpected cost increases — such as labor, logistics, or tariffs — could disproportionately impact profitability. A 50 basis point margin compression would represent a significant earnings headwind.
Source: Source: 10-Q Income Statement
Unlock 4 more detailed risk analysis
Upgrade to unlockCostco reported strong Q1 2026 results with revenue of $136.9B (+8.8% YoY) and net income of $4.04B (+12.5% YoY). Diluted EPS came in at $9.08, up 12.7% from $8.06 in Q1 2025, reflecting broad-based operational strength.
The key takeaways include accelerating profit growth outpacing revenue growth, a 40.7% surge in cash to $17.4B, and operating cash flow jumping 27.9% to $7.68B. Costco also more than doubled its dividend payments YoY to $1.15B, signaling strong financial confidence.
Yes, Costco's operating margin improved modestly to 3.70% from 3.58% in Q1 2025, as revenue growth of 8.8% outpaced cost of revenue growth of 8.5%. However, SG&A expenses grew 9.5%, slightly faster than revenue, which partially offset gross margin gains.
Based on the financial data, key risks include Costco's structurally thin operating margins (~3.7%) leaving little buffer for cost shocks, SG&A growing faster than revenue, and a current ratio of just 1.06 indicating a tight short-term liquidity cushion. Membership fee dependency also remains a structural risk to profitability.
Costco's financial health appears robust: cash and equivalents stand at $17.4B (+40.7% YoY), operating cash flow is $7.68B, and long-term debt is a manageable $5.7B. The debt-to-equity ratio of 1.61 is primarily driven by trade payables rather than financial debt, consistent with Costco's business model.
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