Costco Q3 FY2026: Strong Membership Growth and Digital Momentum

Shares of Costco Wholesale Corporation (Nasdaq: COST) continued to attract investor attention following another quarter of resilient operating performance, with the warehouse retail giant delivering strong sales growth, expanding membership economics, and steady digital momentum during the third quarter of fiscal 2026.

Stellar Q3 FY26 Performance

Costco reported third-quarter fiscal 2026 net sales of $69.15 billion, representing an 11.6% increase year-over-year from $61.96 billion. Comparable sales rose 9.8%, supported by a 2.4% increase in traffic and a 7.3% rise in comparable ticket. Excluding the impacts of gasoline price fluctuations and foreign exchange, adjusted comparable sales still advanced a solid 6.6%.

Membership trends remained a major pillar of Costco’s performance. Membership fee income climbed 10.7% year-over-year to $1.37 billion, benefiting from continued growth in paid members and strong renewal rates. Paid memberships increased 4.1% to 82.9MM, while total cardholders reached 148.5MM. Importantly, Costco maintained a worldwide membership renewal rate of 89.7%, while renewal rates in the United States and Canada stood at an impressive 92.2%.

Executive memberships, a higher-value customer segment for Costco, grew to 41.2MM, and penetration of sales to executive members was 75.0%.

On profitability, merchandise costs rose 11.9% year-over-year to $61.52 billion, slightly outpacing sales growth. As a result, gross margin came in at 11.04%, declining 21 basis points from the prior-year quarter. However, excluding gasoline impacts, gross margin improved modestly by one basis point.

Operating performance remained healthy as selling, general and administrative expenses increased 9.1% to $6.19 billion, growing slower than revenue. This helped operating income rise 11.3% year-over-year to $2.82 billion. Net income climbed to $2.19 billion, or $4.93 per diluted share, compared to $1.90 billion, or $4.28 per diluted share, in the same period last year.

Costco currently operates 931 warehouses, including 639 in the United States and Puerto Rico, 115 in Canada, and 177 in other international locations.

Digital Capabilities Accelerate

Digital growth also remained a bright spot. Digitally-enabled comparable sales increased 21.5% (20.8% adjusted), while ecommerce site and app traffic surged 37%, highlighting Costco’s continued success in blending warehouse traffic with digital engagement. Costco also continued rolling out operational and app enhancements, including expanded mobile cake ordering, international deployment of pre-scan technology, and broader use of push notifications to improve warehouse efficiency.

Balance Sheet and Rising Dividends

From a balance sheet perspective, Costco remains financially strong. The company ended the quarter with $18.95 billion in cash and cash equivalents against $5.67 billion in long-term debt, providing ample flexibility for expansion, shareholder returns, and operational investments. Costco also recently raised its quarterly dividend from $1.30 to $1.47 per share, reflecting management’s confidence in cash flow durability and earnings power.

COST Stock Technical Analysis

From a technical perspective, COST stock continues to trade in a constructive long-term uptrend. The key resistance level currently sits near $1041. A sustained move above this level could strengthen bullish momentum and potentially open the path toward the next upside target around $1,080.

However, if the stock fails to hold momentum above resistance, traders may look for support near $963. Additional downside support zones are located in the $943 to $927 range, which could become important areas for buyers to defend during any broader market pullback.