Costco Wholesale (NASDAQ:COST) Trading Down 3.9% After Earnings Miss

Key Points

• Costco shares fell 3.9% after the company reported quarterly earnings of $4.93 per share, slightly missing the $4.98 consensus estimate. The stock traded sharply lower despite strong trading volume.
• Revenue beat expectations, with sales rising to $70.53 billion versus the $69.68 billion forecast, and same-store sales up 9.8% year over year. That indicates demand remained strong even as profits came in a bit light.
• Investors remain focused on valuation and margins, as Costco’s premium multiple and higher operating costs weighed on sentiment. Analysts are still broadly positive, with many maintaining buy ratings and raising price targets.

Costco Wholesale Corporation (NASDAQ:COST - Get Free Report) shares fell 3.9% during mid-day trading on Friday following a weaker than expected earnings announcement. The stock traded as low as $945.45 and last traded at $956.32. 7,012,226 shares changed hands during trading, an increase of 225% from the average session volume of 2,158,712 shares. The stock had previously closed at $995.20.

The retailer reported $4.93 earnings per share (EPS) for the quarter, missing the consensus estimate of $4.98 by ($0.05). The firm had revenue of $70.53 billion for the quarter, compared to analyst estimates of $69.68 billion. Costco Wholesale had a return on equity of 28.57% and a net margin of 2.99%.During the same period in the prior year, the business earned $4.28 earnings per share.

Costco Wholesale Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, May 15th. Investors of record on Friday, May 1st were given a dividend of $1.47 per share. This represents a $5.88 dividend on an annualized basis and a yield of 0.6%. This is an increase from Costco Wholesale's previous quarterly dividend of $1.30. The ex-dividend date was Friday, May 1st. Costco Wholesale's dividend payout ratio (DPR) is 30.58%.

Key Headlines Impacting Costco Wholesale

Here are the key news stories impacting Costco Wholesale this week:

• Positive Sentiment: Costco beat revenue expectations in Q3, with sales up 11.6% year over year to $70.53 billion and same-store sales rising 9.8%, helped by strong demand for essentials and value-focused shopping. Reuters: Costco Wholesale beats quarterly sales estimates
• Positive Sentiment: Membership and digital trends remained strong, with membership fee revenue rising and digitally enabled comparable sales accelerating, reinforcing Costco’s loyal customer base and growth model. Zacks: Costco Q3 Earnings Beat on Strong Membership and Digital Growth
• Positive Sentiment: Analyst sentiment was broadly constructive, with Bank of America raising its target to $1,200 and reaffirmed buy/outperform calls from Goldman Sachs, Bernstein, BTIG, and Morgan Stanley signaling confidence in Costco’s long-term growth. Benzinga analyst update
• Neutral Sentiment: DA Davidson kept a neutral rating but lifted its price target to $1,000, suggesting modest upside while acknowledging the stock’s premium valuation. Benzinga analyst update
• Negative Sentiment: Despite the earnings beat, shares slipped as investors focused on Costco’s lofty multiple and slight EPS miss versus estimates, indicating the quarter was not strong enough to fully justify the stock’s valuation. Motley Fool: Why Costco Stock Was Sliding Today
• Negative Sentiment: Margin pressure remains a concern, with higher transportation and operating costs weighing on profitability even as sales stay robust. Yahoo Finance: Costco Wholesale Corp Q3 2026 Earnings Call Highlights

Wall Street Analysts Forecast Growth

A number of brokerages have weighed in on COST. BTIG Research reissued a "buy" rating and set a $1,125.00 price target on shares of Costco Wholesale in a research note on Friday. JPMorgan Chase & Co. upped their target price on Costco Wholesale from $1,060.00 to $1,110.00 and gave the company an "overweight" rating in a research note on Friday, April 17th. Robert W. Baird set a $1,100.00 target price on Costco Wholesale in a research report on Thursday, February 5th. DA Davidson reissued a "neutral" rating and issued a $1,000.00 price target on shares of Costco Wholesale in a research note on Friday. Finally, Oppenheimer boosted their target price on shares of Costco Wholesale from $1,100.00 to $1,160.00 and gave the company an "outperform" rating in a report on Tuesday, May 19th. Twenty-one research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $1,056.32.

Insider Buying and Selling

In other news, EVP Claudine Adamo sold 730 shares of the firm's stock in a transaction dated Monday, March 9th. The stock was sold at an average price of $1,003.02, for a total value of $732,204.60. Following the transaction, the executive vice president directly owned 6,121 shares in the company, valued at $6,139,485.42. This trade represents a 10.66% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. 0.10% of the stock is owned by corporate insiders.

Institutional Trading of Costco Wholesale

Institutional investors and hedge funds have recently bought and sold shares of the business. Krane Financial Solutions LLC acquired a new position in Costco Wholesale during the first quarter valued at approximately $709,000. Cozad Asset Management Inc. increased its position in shares of Costco Wholesale by 1.9% in the first quarter. Cozad Asset Management Inc. now owns 18,032 shares of the retailer's stock worth $17,967,000 after acquiring an additional 334 shares in the last quarter. Lavelle Capital LP acquired a new stake in shares of Costco Wholesale in the first quarter worth $631,000. Blue Fin Capital Inc. raised its stake in shares of Costco Wholesale by 0.7% in the 1st quarter. Blue Fin Capital Inc. now owns 12,132 shares of the retailer's stock valued at $12,089,000 after acquiring an additional 85 shares during the period. Finally, Carlson Capital L.P. raised its stake in shares of Costco Wholesale by 75.6% in the 1st quarter. Carlson Capital L.P. now owns 1,405 shares of the retailer's stock valued at $1,400,000 after acquiring an additional 605 shares during the period. Institutional investors and hedge funds own 68.48% of the company's stock.

Costco Wholesale Price Performance

The company's fifty day moving average is $1,008.28 and its two-hundred day moving average is $962.53. The company has a debt-to-equity ratio of 0.18, a quick ratio of 0.59 and a current ratio of 1.06. The firm has a market cap of $424.27 billion, a price-to-earnings ratio of 49.73, a price-to-earnings-growth ratio of 4.94 and a beta of 0.92.

Costco Wholesale Company Profile

Costco Wholesale Corporation operates a global chain of membership-only warehouse clubs that sell a wide array of merchandise in bulk at discounted prices. The company's product mix includes groceries, fresh and frozen food, household goods, electronics, apparel, and seasonal items, augmented by its prominent private-label brand, Kirkland Signature. Costco's business model centers on annual membership fees and high-volume, low-margin sales, designed to drive repeat purchasing and strong customer loyalty among both consumers and small-business buyers.

Beyond merchandise, Costco provides a range of ancillary services that complement its warehouses, including gasoline stations, pharmacy and optical services, hearing aid centers, photo services, and travel and insurance products.

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