Costco. You know the drill. You walk in for a single rotisserie chicken and leave with a $400 bill and a 30-pack of toilet paper you definitely didn't need. But while we're all busy navigating the labyrinth of oversized snacks, Wall Street is laser-focused on one specific number: Costco earnings per share (EPS). Honestly, it’s the heartbeat of the company’s stock performance.
Recently, things got interesting. On December 11, 2025, the warehouse giant dropped its Q1 2026 results, and the numbers were... well, they were classic Costco. They basically thumbed their nose at the doubters who thought the stock was getting too "expensive."
The Big Beat: Q1 2026 by the Numbers
Let's cut to the chase. For the first quarter of fiscal year 2026, which wrapped up on November 23, 2025, Costco posted a diluted EPS of $4.50.
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If you’re keeping score at home, that’s a solid jump from the $4.04 they pulled in during the same quarter the previous year. Analysts—those folks who spend their lives staring at spreadsheets—were actually expecting something closer to $4.27 or $4.28. So, yeah, it was a "beat." A pretty healthy one, too.
Why does this happen? It’s not just about selling more hot dogs. Total revenue for that quarter hit $67.31 billion. That’s an 8.2% increase year-over-year. But the real magic is in the margins.
Why the EPS actually grew
- The Membership Fee Effect: Back in September 2024, Costco finally raised its membership fees for the first time in seven years. Gold Star memberships went from $60 to $65, and Executive memberships jumped from $120 to $130.
- Digital Sales Surge: This one surprised a few people. Digitally-enabled sales (basically their e-commerce and app-based shopping) shot up 20.5% in Q1 2026.
- Efficiency: They’ve been rolling out "pre-scan" technology at checkouts. It sounds boring, but it improved checkout speed by nearly 20% in some locations. Faster checkouts = more people through the door = higher productivity.
Is the Stock Overvalued? The $1,000 Question
Here’s where it gets kinda spicy. Even though the Costco earnings per share looks great, some investors are sweating. The stock has been trading at a Price-to-Earnings (P/E) ratio around 48x to 50x.
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For a grocery store—even a giant one—that’s a huge multiple. For context, most retailers live in the 15x to 25x range. You're basically paying a massive premium because you trust the management and the "moat" they've built around their business.
"At a 48x earnings multiple, the math is tough for some people to swallow," noted one analyst at Seeking Alpha recently. "If that multiple drops to a more 'normal' 25x, the share price could take a hit even if the company keeps growing."
But then you have the bulls. Mizuho recently upgraded the stock to "Outperform" with a $1,000 price target. Their logic? Costco’s "trade-up" activity—where regular members upgrade to Executive status—is actually accelerating. Executive members now account for about 74.3% of total sales. These people aren't just shoppers; they're enthusiasts.
The 2025 Retrospective: A Year of "Slow and Steady"
Looking back at the full fiscal year 2025 (which ended in August), the company reported a total annual EPS of $18.21. That was a nice step up from the $16.56 they saw in 2024.
It’s important to understand how the "Costco Engine" works. They don't make their big money on the products. They make it on the fees. In FY2025, membership fees brought in $5.3 billion. That is almost pure profit. It’s that high-margin "cushion" that allows them to keep the price of a gallon of milk or a rotisserie chicken so low that no one else can compete.
What to Watch in 2026
If you're tracking Costco earnings per share for your own portfolio, there are three things that will move the needle over the next 12 months:
1. The Expansion Plan
Costco is aggressive right now. They’re aiming for about 30+ new warehouse openings annually. They hit 923 global locations recently, with a massive push into international markets like Canada (where comp sales grew 9% recently) and France. Every new warehouse is basically a fresh fountain of membership fees.
2. The "Special" Dividend Rumor
Costco is famous for its occasional "special dividends." They did a $15 per share one back in early 2024. With their cash pile sitting at over $16 billion as of November 2025, the "special dividend" talk is starting up again in the investor forums. It wouldn't impact EPS directly, but it sure makes the shareholders happy.
3. Younger Members
This is a weirdly overlooked stat: nearly half of Costco's new sign-ups are now people under the age of 40. The "boomer brand" tag is officially dead. Gen Z and Millennials are obsessed with the Kirkland Signature brand, which now accounts for a huge chunk of their sales.
Actionable Insights for Investors
If you're looking at these numbers and wondering "What do I do with this?", here is the reality of the situation in 2026:
- Watch the P/E Ratio: If the stock dips and that multiple gets closer to 40x, it’s historically been a "buy the dip" moment. At 50x, you're paying for a lot of future growth that hasn't happened yet.
- Check Renewal Rates: The secret sauce isn't the sales growth; it's the renewal rate. Currently, it's sitting at 92.2% in the U.S. and Canada. If that number starts to slip, the "Costco Story" starts to crack.
- Monitor the Next Report: Mark your calendar for March 5, 2026. That’s when the Q2 results are expected. Analysts are currently projecting an EPS of roughly $4.51. If they beat that again, the $1,000 price target might not be so crazy after all.
The bottom line? Costco remains a machine. It’s a boring, efficient, incredibly profitable machine that turns membership loyalty into cold, hard cash. Whether the stock price is too high is a debate for the ages, but the earnings themselves? They aren't lying.
To stay ahead of the curve, keep a close eye on the quarterly 8-K filings from Issaquah. The "Net Income per Common Share" line tells you more about the health of the American consumer than almost any other economic indicator.