Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Costco delivered strong Q3 FY2026 results with revenue of $70.5B (+11.6% YoY) and net income of $2.19B (+15.2% YoY), driven by robust membership-driven sales growth while maintaining its characteristically lean ~4% operating margin.
Revenue
$70.53B
+11.58% YoY
EPS (Diluted)
$4.93
+15.19% YoY
Operating Income
$2.81B
+11.26% YoY
Source: SEC XBRL
Costco Wholesale (COST) reported Q3 FY2026 revenue of $70.53B, up 11.6% year over year. Operating margin was 4.0%, essentially unchanged from a year earlier. COST's fiscal Q3 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 1 beat
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 4.93 | 5.03 | Miss -1.9% |
| Mar 2026 | 4.58 | 4.65 | Miss -1.5% |
| Dec 2025 | 4.50 | 4.36 | Beat +3.3% |
| Sep 2025 | 5.87 | 5.92 | Miss -0.8% |
Reported EPS of $4.93 versus the $5.03 analyst consensus — a -1.9% miss for Jun 2026.
Compiled by AI from this SEC filing
Revenue grew 11.6% YoY to $70.5B in Q3 FY2026 from $63.2B in the prior-year period, reflecting continued strength in Costco's warehouse membership model and consumer demand for value-oriented bulk purchasing.
Source: 10-Q Income Statement
Net income rose 15.2% YoY to $2.19B, with diluted EPS increasing from $4.28 to $4.93, suggesting improved operational leverage and/or favorable tax or below-the-line items relative to revenue growth.
Source: 10-Q Income Statement
SG&A expenses increased 9.1% YoY to $6.19B, growing slower than revenue (+11.6%), indicating modest operating leverage and disciplined cost management in the quarter.
Source: 10-Q Income Statement
Cumulative fiscal year-to-date operating cash flow reached $11.1B, up 17.6% from $9.5B in the same period last year, underscoring Costco's strong cash generation capability and efficient working capital management.
Source: 10-Q Cash Flow Statement (YTD)
Stockholders' equity surged 23.5% YoY to $33.5B, and cash & equivalents jumped 36.9% to $18.9B, reflecting strong earnings retention and cash accumulation that substantially improved the company's financial position.
Source: 10-Q Balance Sheet
Compiled by AI from this SEC filing · 1 high, 3 medium, 1 low
Costco's operating margin remained essentially flat at ~4.0%, a structurally low level by design given its membership-fee-driven model. Any unexpected cost increases—such as tariffs on imported goods, wage inflation, or supply chain disruptions—could disproportionately compress profitability given the narrow margin base.
Source: 10-Q Income Statement, Operating Margin
The current ratio stands at just 1.07x, meaning current assets only marginally exceed current liabilities ($45.2B vs. $42.1B). While this is typical for Costco's negative working capital model, it leaves limited liquidity cushion if receivables or inventory conditions deteriorate unexpectedly.
Source: 10-Q Balance Sheet, Current Ratio
The debt-to-equity ratio of 1.58x reflects meaningful financial leverage on Costco's balance sheet. While long-term debt is relatively stable at $5.67B, total liabilities of $52.9B against equity of $33.5B means the company relies significantly on liabilities to fund operations, which could be a concern in a rising interest rate environment.
Source: 10-Q Balance Sheet, Debt to Equity
Cost of revenue increased 11.9% YoY versus revenue growth of 11.6%, meaning gross profit margins are under slight pressure. If merchandise costs, logistics, or supplier pricing continue to rise faster than Costco's ability to pass costs to consumers, gross margins could erode further.
Source: 10-Q Income Statement
YTD investing cash outflows increased 24.4% to -$4.16B, reflecting accelerating capital investment likely in new warehouses and infrastructure. While growth-oriented, this pace of capex expansion reduces free cash flow available for dividends and buybacks if operating cash flow growth moderates.
Source: 10-Q Cash Flow Statement (YTD)
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 70.53 $B | 63.21 $B | +11.58% |
Cost of Revenue $B | 61.52 $B | 55.00 $B | +11.86% |
Operating Income $B | 2.82 $B | 2.53 $B | +11.26% |
Net Income $B | 2.19 $B | 1.90 $B | +15.19% |
EPS (Basic) $ | 4.94 $ | 4.29 $ | +15.15% |
EPS (Diluted) $ | 4.93 $ | 4.28 $ | +15.19% |
SG&A Expense $B | 6.19 $B | 5.68 $B | +9.05% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
Costco delivered strong Q2 FY2026 results with revenue of $69.6B (+9.2% YoY) and net income of $2.0B (+13.8% YoY), driven by robust membership-driven traffic and disciplined cost management that expanded operating margins.
Costco delivered a strong fiscal Q4 2025 with revenue of $67.3B (+8.3% YoY), net income of $2.0B (+11.3% YoY), and operating cash flow surging 43.8% to $4.7B, reflecting continued membership-driven growth and disciplined cost management.
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