Core Viewpoint - Costco is positioned as a strong defensive growth stock with a 90% global membership renewal rate, benefiting from store expansion and e-commerce growth, which saw a 23% sales increase last quarter [1] Group 1: Membership and Renewal Rates - Costco maintains a 90% global membership renewal rate, which may have room for further improvement as the company expands its store locations and enhances e-commerce operations [1] - The company aims to convince members that they cannot afford to lose their Costco membership, leveraging its strong value proposition [1] Group 2: Financial Performance and Valuation - Costco's shares have gained over 16% in 2026, although the stock price has plateaued around $1,000 per share, with a trailing P/E ratio of over 51.0, indicating a premium valuation [1] - Despite the high valuation, Costco's defensive growth potential and steady membership retention justify the premium [1] Group 3: Growth Drivers - The company is exploring innovative concepts such as mixed-use properties, which could tap into urban markets and enhance growth [1] - E-commerce sales are rapidly increasing, with a growth rate of nearly 23% in the last quarter, positioning Costco to better manage in-store crowding and enhance overall customer experience [1] Group 4: Competitive Landscape - Competition in the retail sector is intensifying, particularly with advancements in AI technology that could enhance operational efficiency [1] - Costco's member-first approach and commitment to providing value may help it maintain a competitive edge in a challenging retail environment [1]

Group 1 - Costco Wholesale is facing a potential class-action lawsuit filed by a member in Illinois [1]

Costco Wholesale is being sued by a shopper looking to get his tariff costs back https://t.co/4tsXOMbxeQ ...

Core Viewpoint - Costco Wholesale Corp. is facing a proposed nationwide class-action lawsuit seeking refunds for customers charged higher prices due to tariffs imposed by the Trump administration, which were recently nullified by the Supreme Court [1][2]. Group 1: Lawsuit Details - The lawsuit was filed in a federal court in Illinois by a Costco shopper, Matthew Stockov, on behalf of other affected customers, demanding that Costco return any refunds received for tariffs paid under the International Emergency Economic Powers Act (IEEPA) [2]. - The complaint alleges that the lawsuit aims to prevent Costco from receiving a double recovery and highlights that the retailer has not committed to returning any tariff refunds to consumers who incurred those costs [3]. Group 2: Company Response - Costco's CEO, Ron Vachris, stated that it remains uncertain when or if businesses will be refunded the tariffs previously paid under the IEEPA. If refunds are received, Costco plans to utilize the funds to lower prices and enhance customer value [3]. Group 3: Tariff Refund System - U.S. Customs and Border Protection (CBP) is developing a new system to streamline tariff refunds, expected to be operational within 45 days, requiring minimal input from importers [4]. - As of March 4, over 330,000 importers have made more than 53 million entries with CBP, paying approximately $166 billion in tariffs that are now subject to refunds [4].

Group 1 - A potential class-action lawsuit is being initiated against the retailer, aiming to compel the company to pass any refunds received from the U.S. government to its customers [1]

A Costco Wholesale member sued the retailer, saying it should reimburse all customers who paid higher prices on its products because of President Donald Trump’s tariffs https://t.co/BdWWgWWjrf ...

Core Viewpoint - Costco Wholesale is facing a proposed nationwide class action lawsuit seeking refunds for higher prices charged due to tariffs imposed by the Trump administration, which were recently ruled unconstitutional by the U.S. Supreme Court [1] Group 1: Lawsuit Details - The lawsuit was filed by a Costco shopper in federal court in Illinois, aiming to ensure that any refunds Costco receives for tariffs under the International Emergency Economic Powers Act (IEEPA) are returned to customers [1] - The Supreme Court ruled on February 20 that President Trump overstepped his authority in imposing these tariffs, leading to extensive litigation involving over 2,000 companies, including Costco [1] - The lawsuit claims that Costco has not committed to returning any portion of anticipated tariff refunds to consumers who incurred those costs [1] Group 2: Company Response and Future Implications - Costco's CEO Ron Vachris indicated that it remains uncertain if or when the company will receive refunds for the IEEPA tariffs previously paid [1] - If Costco does receive refunds, the company plans to use them to lower prices and enhance value for shoppers [1] - The lawsuit argues that Costco is only offering a "possible future benefit" to an unspecified group of future shoppers, rather than a commitment to current customers [1]

Financial Performance - Costco reported net sales of $68.24 billion for FQ2 2026, a 9.1% increase year-over-year [1] - Net income for the quarter reached $2.03 billion, or $4.58 per diluted share, up from $1.79 billion in the same quarter last year [1] - Total net sales for the first half of the year climbed to $134.22 billion [1] Membership and Sales Growth - Membership fees increased to $1.35 billion for the quarter, compared to $1.19 billion previously [1] - Comparable sales figures showed a 7.4% increase during FQ2 across all geographic segments [2] - Digitally-enabled sales grew by 22.6% for the quarter, indicating strong online performance [2] Global Presence and Financial Health - As of March, Costco operates 924 warehouses globally, with a significant presence in the US and Puerto Rico, and expanding in Canada, Mexico, Japan, and China [3] - The company's balance sheet remains solid, with cash and cash equivalents totaling $17.38 billion at the end of the quarter [3]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 15, 2026 or Costco Wholesale Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Washington 91-1223280 (I.R.S. Employer Identification No.) 999 Lake Drive, Issaquah, WA 98027 (Address of principal executi ...

Core Insights - Costco Wholesale reported strong sales growth in its fiscal 2026 second-quarter results, with a year-to-date stock increase of over 17% in 2026, although it is up only 4.7% over the past year [1] Sales Performance - Fiscal Q1 revenue increased by 9% year over year to $68.31 billion, with adjusted earnings per share (EPS) rising 14% to $4.58 [2] - Digital revenue surged 22.6%, with traffic increasing by 32% and average order value up by 15% [2] - Same-store sales rose by 6.7% when adjusting for gasoline prices and foreign currency, with U.S. same-store sales up 6.4% and Canadian comparable-store sales increasing by 7.6% [2] Transaction and Traffic Growth - Excluding gasoline and currency impacts, Costco's average transaction value rose by 3.5% globally and 3.9% in the U.S., while traffic grew by 3.1% worldwide and 2.4% in the U.S. [3] - The company experienced strong double-digit growth in its pharmacy and food court businesses [3] Membership and Revenue - Membership-fee revenue climbed 13.6% year over year to $1.36 billion, with paid memberships increasing by 4.8% to 82.1 million households [4] - Higher-cost executive memberships rose by 9.5% to 40.4 million, and the membership renewal rate was 92.1% in North America and 89.7% worldwide [4] Expansion Plans - Costco opened three new locations in the quarter and plans to open 18 more this fiscal year, totaling 28 new net openings, bringing the total to 924 warehouses globally [5] - The company aims to open 30 or more warehouse stores annually in the coming years [5] Stock Valuation - Despite strong sales performance, Costco's stock is considered pricey, trading at a forward price-to-earnings ratio (P/E) of nearly 49, and the company will not benefit from prior membership fee increases [6]