Costco Wholesale Corporation (NASDAQ:COST, XETRA:CTO) reported an 8% rise in first-quarter revenue on Thursday aftermarket, lifted by robust digital engagement and steady traffic, while membership fees climbed and the retailer continued to aggressively expand its warehouse footprint.
Revenue for the quarter ended November 24 rose to $67.3 billion, topping analysts’ estimates by about $200 million. Earnings per share came in at $4.50, beating expectations by $0.22.
The company ended the period with 923 warehouses, up 26 from a year earlier and nine from the prior quarter.
Comparable sales rose 6.4% on an adjusted basis, including 5.9% growth in the US. Digitally enabled sales jumped 20.5%, and Costco said strong online engagement helped bolster overall ticket and traffic trends.
Membership fee income increased 14% year-over-year to $1.33 billion, supported by rising Executive Membership penetration despite a slight dip in renewal rates.
Jefferies said the quarter showed Costco remained “well-positioned” heading into next year, citing strength in core categories, healthy traffic and accelerating digital initiatives.
“COST delivered strong Q1 results…driven by strong digital engagement and healthy ticket and traffic trends,” the analysts wrote. They noted that digital tools and AI-driven systems are improving the member experience and operational efficiency.
Jefferies trimmed its price target slightly to $1,050 on a lower multiple but said it continues to expect “sustained momentum into N-LT” as the company leverages scale, technology and its value-oriented model.
The brokerage highlighted several positives, including seven new warehouse openings in the quarter — part of management’s plan to add 21 more locations over the next year — improving margins, and record Black Friday performance in US e-commerce.
Digitally enabled comparable sales grew 20.5%, with e-commerce traffic up 24% and average order value rising 13%, Jefferies said. Management also pointed to ongoing opportunities from AI applications in pharmacy inventory and from digital wallet adoption and entry-scanning initiatives.
Still, the analysts flagged higher SG&A expenses, driven partly by rising healthcare costs and a tax assessment, as well as a modest 10-basis-point decline in renewal rates from the prior quarter.
Even so, Jefferies expects Costco to continue gaining market share, supported by its international expansion pipeline, strong membership base and resilience to cost pressures.