Costco Wholesale Corporation (COST) Pre Recorded Sales/ Trading Statement Call Prepared Remarks Transcript

Costco reported net sales of $30.02 billion for the five-week retail month ended October 4, 2026, up 13% from $26.58 billion a year earlier. Comparable sales were up 12.5% in the U.S., 6.3% in Canada and 10.8% in Other International; excluding gasoline-price and foreign-exchange effects, growth was 8%, 4.9% and 7.7%, respectively. Digitally enabled sales increased 19% year over year on a reported basis.

Analysis

The sales signal supports Costco’s position as a share-gainer, but it is not yet an earnings signal: comparable-sales growth can reflect price, traffic, mix, or basket size, and the release does not separate those drivers. In a thin-margin model, stronger volume helps fixed-cost absorption, while higher merchandise costs or promotional intensity could still prevent sales growth from reaching operating profit. The reported digital growth is not a clean e-commerce read-through because the company’s definition includes warehouse-fulfilled orders and Costco Travel; the truncated disclosure also leaves the comparable digital trend unverified.

Near term, the market may reward the resilience of the core business, but the risk is extrapolating one retail month into a durable acceleration without traffic, ticket, and margin data. Over the next 1–3 months, earnings commentary on comparable transaction growth, gross margin, and membership trends matters more than another headline sales percentage. Structurally, sustained share gains could strengthen Costco’s bargaining leverage with branded suppliers and pressure less differentiated retailers such as Target; this remains a hypothesis, not a demonstrated consequence of this release. A reversal would be weaker transaction growth or margin guidance despite continued nominal sales growth.

Key Decisions for Investors

• No trade on the monthly release alone: it lacks traffic-versus-ticket, merchandise margin, and full digital detail, while valuation and consensus expectations are not supplied.
• Keep COST on a relative-quality watchlist versus Target and broad retail exposure. Consider adding only on a pullback if the next earnings update confirms transaction growth and stable merchandise margins; avoid treating the digital headline as proof of a profitable channel shift.
• For the next 1–3 months, track comparable sales excluding fuel and FX alongside transaction growth, gross margin, and membership trends. Falsify the share-gain thesis if transactions soften or margin guidance deteriorates while sales remain nominally strong.