Costco’s Q2 Beat Draws Fresh Price Targets as Membership Strength Lifts Margins

Broker calls spotlight rising fee income, margin gains and expansion plans, with valuation sensitivity still a concern.

Overview

Costco topped fiscal Q2 earnings expectations while revenue landed slightly below consensus, reflecting strong operations alongside modest top-line softness.
Net sales rose 9.1% year over year to $68.24 billion, extending steady growth across the warehouse network.
Membership economics stayed robust with fee income up about 14%, comparable traffic up 3.1% worldwide, and gross margin expanding by 17 basis points.
Analysts raised targets after the quarter, including BTIG and Telsey to about $1,125 and Truist to $977, with some notes cautioning on membership-growth momentum and a rich valuation.
Management detailed tariff-mitigation moves and selective price cuts, reported 924 warehouses, and guided to roughly 28 net new openings in fiscal 2026.