Gary Millerchip

Senior executive at Costco Wholesale Corporation responsible for communicating the company's financial performance and strategic direction.

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Key positions and views

The membership model is the paramount driver of profitability, enabling Costco to offer industry-leading prices on goods and services, which in turn drives member loyalty and growth.

Aggressive investment in digital channels—from the mobile app and e-commerce to same-day delivery partnerships—is critical for long-term growth, even if it introduces challenges like lower initial renewal rates for online sign-ups.

The Kirkland Signature private label is a key strategic asset that provides a 15-20% value proposition over national brands, drives sales growth faster than the company average, and helps mitigate tariff impacts.

A steady, calculated pace of global warehouse expansion (28-30+ new units per year) is essential, requiring creative real estate solutions to penetrate dense, high-value urban markets.

Maintaining price leadership is non-negotiable; this involves passing savings from lower commodity costs and reduced tariffs directly to members to reinforce trust and value.

Podcast consensus on Millerchip

Points of consensus

▶Both Q1 and Q2 2026 earnings calls confirm a consistent full-year capital expenditure forecast of approximately $6.5 billion, indicating a stable, long-term investment strategy.Apr 2026

▶Millerchip consistently reports that digital sales, including same-day delivery services, are growing at a faster rate than the core warehouse business, highlighting a key strategic focus.Apr 2026

▶Across both quarters, Millerchip emphasizes strong growth in membership fee income and the total number of paid members, reinforcing the centrality of the membership model to Costco's financial health.Apr 2026

▶He repeatedly highlights the value proposition of the Kirkland Signature private label brand, stating in both Q1 and Q2 contexts that it offers a 15-20% price advantage over national brands and is growing faster than overall sales.

Points of debate

▶Millerchip presents a nuanced view on membership renewal rates; in Q1 he predicted a 'potential slight decline' due to online sign-ups, and in Q2 he confirmed a 10-basis-point drop in the U.S./Canada rate for that exact reason, showing a tension between digital growth and member retention.Apr 2026

▶His commentary on pricing reveals a dual strategy: actively lowering prices on key items like coffee and butter due to decreased commodity costs, while simultaneously benefiting from a membership fee increase implemented in September 2024.

▶Millerchip balances a bullish outlook on sales growth with specific identified headwinds, such as ongoing egg price deflation impacting the food category and potential supply chain disruptions from instability in the Middle East.

▶While reporting strong overall gross margin improvement in Q2, he details several volatile components, including a negative LIFO charge, a positive one-time legal settlement, and an increase in liability reserves, suggesting the headline number is subject to multiple underlying pressures.

Key themes

▶Digital Acceleration and E-commerce IntegrationApr 2026

Millerchip consistently highlights the rapid growth of Costco's digital channels, with e-commerce sales, website traffic, and app usage all increasing significantly. He emphasizes that digitally-enabled sales are outpacing warehouse growth and that new initiatives like personalized recommendation carousels are already driving hundreds of millions in sales.

Costco is successfully translating its warehouse value proposition to the digital realm, but this strategic shift introduces new challenges, such as managing the lower renewal rates associated with younger, digitally-acquired members.

▶Membership as the Core Economic EngineApr 2026

The foundation of Millerchip's financial reporting is the strength of the membership model. He details consistent quarter-over-quarter growth in total paid members, executive memberships, and high-margin membership fee income, which increased by over 13% in both Q1 and Q2.

The predictable, high-margin revenue from membership fees provides Costco with a significant competitive advantage, allowing it to absorb commodity price fluctuations and offer aggressively low prices on goods, reinforcing member loyalty.

▶Strategic Expansion and Operational Innovation

Millerchip outlines a clear plan for physical growth, targeting 28 new warehouses in FY2026 and over 30 annually in subsequent years. He also discusses innovative approaches to expansion, such as using creative real estate models with parking decks and residences in dense urban markets like Los Angeles.

Despite its massive scale, Costco is not resting on its laurels and is actively pursuing both geographic expansion and in-store technological efficiencies, like automated pay stations, to drive future growth and improve the member experience.

▶Proactive Management of Macroeconomic Headwinds

Millerchip provides transparent commentary on external economic factors, including the impact of gas price deflation, foreign exchange rates, and commodity costs on sales and margins. He also details Costco's mitigation strategies for tariffs, such as shifting production and focusing on the Kirkland Signature brand, and acknowledges geopolitical risks in the Middle East.

Millerchip's detailed discussion of macroeconomic factors demonstrates a sophisticated approach to risk management that aims to protect the company's value proposition for members while navigating a complex global environment.

Source episodes

Sentiment over time

Not enough data for timeline

Changes over time

Q1 2026

Millerchip reports strong Q1 results with 8.2% net sales growth and 20.5% e-commerce growth. He forecasts a $6.5 billion CapEx for the fiscal year and anticipates a 'potential slight decline' in renewal rates due to a mix shift towards online sign-ups.

February 2026

During the Q2 call, Millerchip details February's performance, noting a 7.9% increase in total company comparable sales. He specifies that performance was affected by both a positive 0.5% impact from the Lunar New Year and store closures due to severe weather in the U.S. Northeast.

Q2 2026

Reports accelerated growth with 9.1% net sales growth and 22.6% digital sales growth. He confirms the previously anticipated renewal rate dip, with the U.S. and Canada rate falling 10 basis points, which he attributes to the online member trend. He reiterates the $6.5 billion CapEx forecast.

Fiscal Year 2026 Outlook

Across both earnings calls, Millerchip maintains a consistent outlook for FY2026, including a $6.5 billion capital expenditure plan and the opening of 28 net new warehouses.

Future Outlook (post-Q2 2026)

Millerchip outlines a long-term strategy that includes accelerating new warehouse openings to over 30 per year, developing a retail media business, and working with AI companies to enhance product visibility in next-generation shopping tools.

Suggested prompts

How does Gary Millerchip's strategy for reinvesting proceeds from new ventures like the retail media network align with Costco's core 'member value' philosophy? &nearr;What specific metrics does Millerchip use to justify the continued aggressive investment in digital channels despite the lower renewal rates of online-acquired members? &nearr;Based on Millerchip's commentary, what are the primary risks and mitigation strategies Costco has in place for potential supply chain disruptions in the second half of fiscal year 2026? &nearr;How does Millerchip's discussion of creative urban real estate models signal a shift in Costco's long-term market penetration strategy? &nearr;

Key concepts

Comparable Sales 2 ep Membership Growth & Renewal Rates 2 ep E-commerce & Digital Sales 2 ep Capital Expenditure (CapEx) 2 ep Kirkland Signature Brand 2 ep Gross Margin Analysis 2 ep Warehouse Expansion Strategy 1 ep Geopolitical & Supply Chain Risks 1 ep Inflation & Pricing Strategy 1 ep Ancillary Businesses (Pharmacy, Gas, Travel) 2 ep

Notable quotes

“In Q2, our personalized product recommendation carousels drove over $470 million of e-commerce sales.”

Gary Millerchip · $COST Costco Q2 2026 Earnings Conference Call

“Digitally enabled comparable sales were up 22.6%, or 21.7% adjusted for FX.”

Gary Millerchip · $COST Costco Q2 2026 Earnings Conference Call

“We currently expect to have 28 net new openings in fiscal year 26 and are targeting 30-plus new openings per year in the coming years.”

Gary Millerchip · $COST Costco Q2 2026 Earnings Conference Call

“so, Canada AUVs is now approaching 300 million.”

Gary Millerchip · $COST Costco Q2 2026 Earnings Conference Call

Report last updated: Apr 21, 2026

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