Costco Wholesale Corporation delivered a strong performance in the first quarter of fiscal 2026, posting robust growth across sales and membership metrics. While executives highlighted product expansion and operational strength during the Q1 earnings call, the company remained notably “quiet” regarding its high-profile lawsuit challenging federal tariffs.
Here is a breakdown of the key takeaways from the quarter:
Q1 Financial Snapshot
| Metric | Result | Year-over-Year Change |
| Total Revenue | $67.31 Billion | Up 8.3% |
| Earnings Per Share (EPS) | $4.50 | Beat analyst consensus |
| Net Income | $2.0 Billion | Up 11.3% |
Key Growth Drivers
Costco’s sales momentum was largely driven by its fresh and private-label departments, signaling continued consumer demand for value.
- Fresh Food Success: Fresh sales increased in the mid- to high-single digits, led by double-digit growth in the meat department. CFO Gary Millerchip noted a strong mix of sales, including high-cost beef cuts and high unit growth in lower-cost proteins like poultry.
- Kirkland Signature Outperforms: Sales of the private-label Kirkland Signature brand grew faster than the retailer’s overall sales, reinforcing its role as a key value driver, with prices estimated to be up to 20% lower than national competitors.
- E-Commerce Surge: The company’s digitally-enabled comparable sales saw a sharp increase of over 20% during the quarter.
- Inflation Update: Q1 marked the third consecutive quarter of single-digit inflation, providing a measure of stability for consumers.
The Tariff Lawsuit: An Unaddressed Topic
Despite the strong results, company leaders chose not to discuss the ongoing legal challenge they have mounted against the federal administration regarding certain import tariffs.
Costco recently filed a lawsuit seeking a full refund of the substantial duties it has already paid, arguing that the tariffs imposed under emergency economic powers were unlawful. The retailer took this action to secure its right to a refund, particularly as the U.S. Supreme Court is currently reviewing the legality of the sweeping tariffs.
When addressing supply chain and cost mitigation, the CFO only briefly referenced the tariff situation, noting that buyers are continuing to adjust the product assortment and shift sourcing to “minimize the impact of tariffs” on members. The company’s strategy is focused on maintaining affordability and value while awaiting a definitive ruling from the Supreme Court.