Costco delivered strong Q1 2026 results, with significant year-over-year growth in net sales, net income, and membership fees. Comparable sales grew a healthy 6.4%, driven by increases in both shopping frequency and average transaction size.
The company continues to prioritize brick-and-mortar growth, targeting over 30 net new warehouses annually. This strategy includes international expansion, high-impact relocations, and creative real estate projects like converting existing retail spaces and developing mixed-use properties with housing.
Costco is pragmatically deploying technology to enhance its core operations and member experience. Key initiatives include using AI to optimize pharmacy and gas inventory, which has improved in-stock rates to over 98%, and implementing pre-scan technology to increase checkout speeds by up to 20%.
The company's digital channels are experiencing explosive growth, with e-commerce comparable sales up 20.5% and significant increases in website and mobile app traffic. Same-day delivery services and online-only events like a record-breaking Black Friday are major contributors to this momentum.
Membership remains a core strength, with total paid members growing 5.2% to 81.4 million and renewal rates staying high. However, the company noted a potential slight decline in the overall renewal rate due to a mix shift towards younger members who sign up digitally and historically renew at a lower rate.
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