Costco is accelerating its physical footprint growth with plans for 28 new warehouses in FY2026 and a long-term target of 30+ per year. This expansion is supported by creative real estate strategies, such as multi-level buildings in dense urban areas, to penetrate new and existing markets both domestically and internationally.
The company is successfully integrating technology to enhance both online and in-warehouse experiences, evidenced by a 22.6% growth in digitally-enabled sales. Key initiatives include personalized e-commerce carousels, piloting automated pay stations to reduce checkout times, and actively working with AI companies to ensure brand visibility on emerging platforms.
Costco's membership base continues to be a core strength, with total paid members growing to 82.1 million and high-value executive memberships increasing 9.5%. This drove a 13.6% increase in high-margin membership fee income, reinforcing the stability of its recurring revenue stream.
Despite a complex environment with new global tariffs and potential supply chain disruptions, Costco demonstrated strong operational control. The company is mitigating tariff impacts by shifting production and leveraging its private label, while also strategically lowering prices on key goods where it sees deflation, reinforcing its value leadership and achieving a 22 basis point increase in core-on-core margins.
Keep pulling the thread on United States.