Overview
- Costco reported a strong fiscal third quarter with revenue and adjusted EPS up double digits and digital sales rising sharply.
- Management said the final weeks of the quarter produced the company's highest gasoline-volume weeks ever, which pulled in customers and helped lift same-store sales.
- Because gasoline is a low-margin product, the larger share of fuel and faster e-commerce growth reduced Costco's gross margin during the period.
- Paid memberships and membership-fee revenue grew and website and app traffic jumped, supporting recurring income even as membership growth has moderated.
- The stock fell roughly mid-teens percent from recent highs as investors focused on margin compression and a premium forward valuation, while analysts say the model remains sound but caution that membership trends and margin recovery are key risks to monitor.