Honestly, if you're just skimming the headlines of the latest costco earnings call transcript, you are missing the real story. Most people see the $65.98 billion in net sales for Q1 2026 and think, "Yeah, people still love buying bulk toilet paper."
Sure, that’s true. But there’s a much weirder, more interesting shift happening under the hood of this retail giant that most investors are totally glossing over.
It isn't just about the $1.50 hot dog anymore. It’s about how a company famous for being "analog" is suddenly winning a digital war it barely seemed interested in five years ago.
The Digital Explosion Nobody Expected
For the longest time, Costco's website felt like a relic of 2005. But look at the numbers in the December 11, 2025, transcript. Digitally enabled comparable sales shot up by 20.5%.
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That is massive.
Even more surprising? App traffic is up 48%. If you’ve ever tried to use the old Costco app, you know it was... rough. But CFO Gary Millerchip pointed out that same-day delivery—through Instacart in the US and Uber/DoorDash internationally—is actually growing faster than their overall digital sales. They've finally figured out how to make "convenience" work for a brand built on the "treasure hunt" experience.
Why the Membership Fee "Surge" Is a Double-Edged Sword
We all knew the fee hike was coming. In September 2024, they bumped the prices, and now we’re seeing the results in the costco earnings call transcript. Membership fee income hit $1.329 billion, a 14% jump.
But here is the catch.
Renewal rates in the US and Canada actually ticked down by 10 basis points to 92.2%. Why? Because of us. Well, the younger us.
More people are signing up digitally (think Groupon deals and TikTok-driven memberships). These "digital-first" members don't renew at the same insane rates as the legacy folks who have been carrying a physical card since the 90s. Management is literally fighting its own success here. They’re getting the members, but they’re having to work way harder to keep them.
The Weird Flex: Gold and Jewelry
While everyone is worried about the price of eggs (which, by the way, Costco says are getting cheaper), the "non-food" category is where the real action is.
- Gold bars and jewelry are still seeing double-digit growth.
- Gift cards are a massive driver.
- Black Friday saw over $250 million in non-food e-commerce sales in the US alone.
It turns out that when people are worried about the economy, they don't just buy bulk beans—they buy gold. Go figure.
The Logistics Problem: What’s Happening in Spain?
You won’t see this in the flashy "EPS beat" summaries, but the company had to scale back its warehouse opening plans. They were aiming for 30+ net new openings. Now? They’ve revised it down to 28 for fiscal 2026.
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The culprit? Construction delays in Spain.
It sounds like a minor detail, but for a company that relies on physical footprints to drive membership, every delayed warehouse is millions in "lost" potential fees. To compensate, they are leaning into "relocations." They take an old, crowded warehouse and move it to a bigger spot with more parking. Millerchip mentioned some of these moves drive a 20% to 60% sales uplift. That’s basically like opening a new store without having to find a new zip code.
Actionable Insights for the Savvy Observer
If you're looking at this from an investment or even a consumer perspective, here's the "so what" from the costco earnings call transcript:
- Watch the "Average Ticket": It’s up 3.2% globally. People aren't just visiting more; they are spending more every time they swipe. This suggests Costco still has incredible "pricing power" despite inflation.
- The AI Play is Real: They are using AI for pharmacy inventory now. It raised in-stock levels above 98%. It’s not flashy, but it’s making them way more efficient.
- Logistics Matter: With $6.5 billion earmarked for capital expenditure in 2026, they are betting heavily on logistics and "depots." If you see a Costco warehouse getting a massive parking lot expansion, expect their stock to follow suit in that region.
- The Executive Trap: 47.7% of members are now "Executive" level. These people account for nearly 75% of global sales. Costco is becoming a two-tier society, and the top tier is doing all the heavy lifting.
Don't let the simple "warehouse" vibe fool you. The transcript shows a company that is aggressively pivoting to digital while trying to keep its "forklift-to-CEO" culture intact. It’s a delicate balance.
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If you want to stay ahead, keep an eye on those renewal rates for digital sign-ups. That’s the real "canary in the coal mine" for Costco’s long-term health. If they can’t get the "TikTok generation" to auto-renew, that 14% fee growth will evaporate fast.
To stay on top of these trends, you should monitor the next quarterly release specifically for "Digital-First Renewal Rates" and "SGA Headwinds" from healthcare costs, as those were the two red flags mentioned in this quarter’s report.