Costco Stock Analysis: Digital Growth Powers EPS Beat

Costco Wholesale Corporation (NASDAQ: COST) delivered a solid start to fiscal 2026, reporting first-quarter operating results that underscored resilient consumer demand, strong membership economics, and continued momentum in digitally enabled sales. However, despite the fundamental strength, the stock’s near-term direction remains dependent on its ability to overcome key technical resistance levels.

Strong Revenue and Earnings Growth

For the twelve weeks ended November 23, 2025, Costco reported net sales of $65.98 billion, representing an 8.2% year-over-year increase from $60.99 billion in the prior-year period. Total revenue reached $67.31 billion, driven by both merchandise sales and continued growth in membership fees, which rose to $1.33 billion from $1.17 billion last year.

Net income for the quarter increased to $2.00 billion, or $4.50 per diluted share, compared with $1.80 billion, or $4.04 per diluted share, a year earlier. Earnings growth was supported by higher operating income and disciplined expense management, even as merchandise and SG&A costs rose in line with revenue expansion.

Comparable Sales and Digital Strength

Comparable sales rose 6.4% companywide during the quarter, with balanced performance across regions. U.S. comparable sales increased 5.9%, while Canada and other international markets posted gains of 6.5% and 8.8%, respectively. On an adjusted basis, excluding gasoline price and foreign exchange impacts, total company comparable sales growth remained a healthy 6.4%.

Digitally enabled comparable sales surged 20.5%, reinforcing Costco’s success in blending its warehouse model with e-commerce capabilities and highlighting an important long-term growth driver.

Expanding Global Footprint

Costco ended the quarter with 923 warehouses worldwide, spanning the U.S., Canada, Mexico, Asia, Europe, and Australia. This scale provides purchasing leverage and supply chain resilience, which are particularly important amid trade policy uncertainty and tariff-related cost volatility.

Tariff Lawsuit

Costco disclosed that it had filed a lawsuit against the U.S. government seeking a full refund of import duties if the Supreme Court rejects President Donald Trump's authority to impose tariffs without congressional approval. A favorable ruling could result in meaningful cash recoveries for large importers like Costco, potentially improving future margins and free cash flow. Conversely, an adverse outcome would remove this potential upside and maintain tariff-related cost pressures.

Technical Outlook

Despite the strong fundamentals, Costco's stock price action suggests a near-term consolidation phase. The stock faces immediate and crucial resistance at the $935 level. A sustained breakout above this level would be a constructive signal and could pave the way toward the next resistance at approximately $959. Clearing both levels would be necessary to confirm a renewed upward trend.

Conversely, if COST fails to gather the required momentum and breaks down from its current trading range, it may seek lower support levels. The initial support lies at $833. Should selling pressure intensify and this primary support fail to hold, the stock could retreat further to test the critical long-term support zone between $810 and $791.