Costco Q1 EPS Beats by $0.07, Revenue Up 8.3%; Dividend Raised to $1.30
Costco reported fiscal Q1 EPS of $4.34, beating estimates by $0.07, and revenue rose 8.3% year-over-year to $67.31 billion. Costco approved a $1.30 quarterly dividend payable Feb. 13 and boosted Visa card gas cash back from 4% to 5%, raising the annual cap benefit from $280 to $350.
1. Two-Decade Investment Performance
A $1,000 investment in Costco stock made 20 years ago would now be worth $27,600, including dividends, representing a compound annual growth rate of roughly 12.2%. Over the same period, the S&P 500 with reinvested dividends would have grown to $7,900, underscoring Costco’s sustained outperformance. Despite a 6% share price decline in calendar 2025, the membership‐warehouse model has delivered exceptional long-term returns, driven by low‐price leadership, bulk packaging efficiencies and consistent margin expansion.
2. Continued Sales Growth and Membership Expansion
In the fiscal 2026 first quarter ended November 23, 2025, Costco reported sales growth of 8.2% year-over-year, maintaining its streak of high‐single-digit comparable sales gains. The company added 2.3 million new members during the quarter and upgraded more than 500,000 of them to Executive status, which carries a higher average per-member spend. Gross margin held near 12.9%, while operating margin remained above 3.5%, reflecting tight cost controls in distribution and warehouse operations.
3. Enhanced Credit Card Fuel Rewards
Costco quietly raised the cash-back rate on in-warehouse fuel purchases for its co-branded credit card from 4% to 5%, effective January 2026. The higher rate applies to the first $7,000 of annual fuel spending at Costco pumps, increasing the maximum annual cash-back reward from $280 to $350. Purchases outside of Costco locations and electric vehicle charging continue to earn 4% up to the same cap, then drop to 1%, reinforcing Costco’s strategy to drive incremental member loyalty without altering broader card benefits.
4. Insider Activity and Analyst Outlook
In mid-January, Executive Vice President James Klauer sold 1,500 shares for proceeds of approximately $1.4 million, reducing his personal stake by 3.2%. Over the past 90 days, insiders have sold a total of 11,946 shares valued at $11 million. On the institutional side, Norges Bank initiated a new position valued at $5.7 billion in the second quarter of 2025. Among 34 Wall Street analysts, 21 maintain Buy ratings, 12 Hold and 1 Sell, with consensus target prices clustering around a mid-teens percentage upside, reflecting confidence in renewal economics and international expansion prospects.