Costco Posts 8.3% Q3 Revenue Growth, Declares $1.30 Dividend and Switches Food Court to Coca-Cola
Costco reported Q3 EPS of $4.34 vs $4.27 consensus and revenue of $67.31 billion, up 8.3% YoY, then declared a $1.30/share dividend payable Feb. 13. It also ended its decade-long food-court deal with PepsiCo, reverting to Coca-Cola products to potentially boost concession margins.
1. Senator Markwayne Mullin Purchase
In a filing disclosed on January 16th, Senator Markwayne Mullin (R-Oklahoma) reported acquiring between $15,001 and $50,000 worth of Costco Wholesale shares on December 29th. This transaction marks the latest in a series of high-profile purchases by the Senator, who on the same date also invested similar amounts in companies across industrials, travel, technology and consumer staples sectors. The timing of Mullin’s Costco purchase coincides with the retailer’s recent momentum in membership growth and same-store sales gains, suggesting confidence in the company’s resilience and long-term growth trajectory.
2. Quarterly Earnings and Dividend Update
On December 11th, Costco reported quarterly earnings per share of $4.34, beating consensus estimates by $0.07. Revenue for the quarter rose 8.3% year-over-year to $67.31 billion, supported by a 7% increase in same-store sales during December and a 5.2% uptick in membership accounts to 81.4 million. The company announced a quarterly dividend of $1.30 per share, payable February 13th to stockholders of record as of January 30th, representing a 27.85% payout ratio and reinforcing its commitment to returning cash to shareholders.
3. Hedge Fund Positions and Insider Transactions
Institutional ownership remains elevated at 68.5%, driven by significant moves from major asset managers. In the second quarter, Norges Bank initiated a new position valued at approximately $5.7 billion, while Kingstone Capital Partners Texas gained over 2.3 billion shares following a substantial increase. Recent insider disclosures include the sale of 1,500 shares by Executive Vice President James C. Klauer on January 14th and 558 shares by EVP Javier Polit on December 30th, representing modest reductions of 3.24% and 5.19% in their respective holdings.
4. Analyst Ratings and Valuation Considerations
Wall Street sentiment remains generally positive, with 21 analysts assigning buy ratings, 12 holds and one sell. Consensus estimates project fiscal 2026 earnings growth of 11% and revenue growth of 8%. Despite these solid fundamentals, Costco trades at a premium earnings multiple of roughly 50x peer levels, which some coverage notes as a potential headwind if margin expansion slows. Recent target revisions range from moderate cuts to continued outperformance forecasts, reflecting a balance between durable membership-driven tailwinds and elevated valuation risks.