Costco shatters records with massive pizza and pie sales during holiday season

Costco said record holiday-season demand—including 358,000 whole pizzas served in U.S. food courts (a 31% jump), roughly 4.5 million pies sold in the three days before Thanksgiving (about 7,000 per warehouse) and a record‑breaking more than $250 million in non‑food online orders on Black Friday—helped drive stronger‑than‑expected Q1 2026 results. The company reported revenue of $67.31 billion versus $67.14 billion expected and adjusted EPS of $4.50 versus $4.27, while the stock ticked down slightly after hours to $877.71. Management framed the strength as evidence of value‑seeking consumer behavior, and Costco said it is also pursuing litigation to recover tariffs it says were improperly levied under President Trump’s emergency orders.

Analysis

Costco reported record holiday-season demand that materially contributed to a stronger-than-expected Q1 2026: CFO Gary Millerchip highlighted 358,000 whole pizzas served in U.S. food courts (a 31% year-over-year increase), roughly 4.5 million pies sold in the three days before Thanksgiving (about 7,000 pies per warehouse), and a record more than $250 million in non-food online orders on Black Friday. The company posted revenue of $67.31 billion versus consensus $67.14 billion and adjusted EPS of $4.50 versus $4.27, signaling a clear beat on both top line and profitability. These operational sales metrics indicate both in-store food-court traffic and e-commerce strength contributed to near-term outperformance.

Market reaction was muted with shares ticking down after hours to $877.71 despite the beat, suggesting investors may be awaiting forward guidance or weighing event risks. Management and outside commentary framed the strength as value-seeking consumers stretching dollars, and Costco noted that nearly half of new members are under 40, which supports recurring membership economics. The mix of younger-member growth and elevated holiday transactions points to durable demand for Costco’s value proposition across channels.

Costco is also pursuing litigation to recover funds it says were improperly paid under President Trump’s emergency tariffs, creating a legal and policy risk that could affect gross margins or cash flows if outcomes are unfavorable. Investors should therefore balance the demonstrated operational momentum in e-commerce and food-court sales against the potential financial impact of the tariff litigation in upcoming quarters.

Key Decisions for Investors

• Consider maintaining or modestly increasing exposure to COST to capture resilient holiday demand and e-commerce momentum after the Q1 revenue and EPS beat
• Monitor the federal tariff litigation closely as a discrete event risk and be prepared to reassess positions if court outcomes or company disclosures indicate material tariff-related liabilities
• Watch next-quarter e-commerce trends, food-court sales cadence, and membership growth (especially under-40 conversion) as key indicators of sustained demand and reduce exposure if these metrics deteriorate
• Use any near-term pullbacks from current levels (after-hours cited at $877.71) as opportunistic entry points rather than chasing further upside given the mixed signal of a beat and muted stock reaction