Costco (COST.US) received unanimous praise from major financial institutions after its performance review! Its structural advantages are difficult to shake, and are expected to continue seizing market share.

Costco Wholesale Corporation (COST.US), a chain membership warehouse supermarket, announced that its second-quarter performance exceeded market expectations. The company did not encounter any difficulties in increasing and retaining members, and is expected to benefit from tax refunds and potential tariff refunds this year. After Costco announced this latest performance, several major bank analysts gave the stock positive ratings. According to the financial report, in the second quarter of the 2026 fiscal year ending on February 15th, Costco's quarterly revenue increased by 9.2% year-on-year to 69.6 billion US dollars, exceeding market expectations by 280 million US dollars. Membership fee income reached 1.36 billion US dollars, exceeding market expectations. Overall same-store sales increased by 7.4% - average spending increased by 4.2%, and foot traffic increased by 3.1% - higher than the market's expected 6.7%; same-store sales in the United States increased by 5.9%, exceeding the market's expected 5.7%. In terms of profit, operating profit was 2.61 billion US dollars, up 12.5% year-on-year; adjusted earnings per share were $4.58, exceeding the average expectation by 3 cents. Costco stated that with its large packaging sizes and unique product selection, the retailer has attracted cost-conscious consumers - especially those with higher disposable incomes, thereby gaining market share. The retailer has also expanded its e-commerce and delivery services, and added exclusive shopping times for executive members. Bank of America reiterated its "buy" rating on Costco. Analyst Christopher Nardone stated that the retailer's continued reinvestment of profits into product prices enhances the bank's confidence in its ability to expand market share in various product categories. Analysts also pointed out that the growth in executive memberships and stable renewal rates are positive factors. Analysts also stated that Costco is able to withstand the impact of rising oil prices to a certain extent. He pointed out, "Although soaring gasoline prices may compress gasoline business profits in the short term, if oil prices continue at higher levels, it may drive more customers to the stores as Costco has a price advantage (especially, about half of members visit both the gas station and the store)." Jefferies Financial Group Inc. also maintains a "buy" rating on Costco. Analyst Coret Tarlowe emphasized, "Despite the sales and management expense pressures brought by product mix and claim reserves, core profit margins have improved. Looking ahead, store expansion, capital expenditure investments, and pricing discipline are the foundation for continuing to gain market share." Morgan Stanley also maintains a "hold" rating on Costco with a target price of $1130. Analyst Simeon Gutman pointed out that the company has demonstrated strong execution in membership growth, membership fee income, and core profitability, and comparable sales accelerated again after entering the spring season. He said, "These performances once again highlight the company's structural advantages, including supply chain efficiency, value pricing, and scale advantages. We believe these advantages will continue to support its expansion of market share and drive long-term profit growth." In addition, analysts from the iREIT+Hoya Capital investment team stated, "Costco once again delivered a strong financial report, with both income and profit showing steady growth, mainly due to strong performance in Canada and international markets... Looking ahead, Costco is expected to continue to achieve steady growth, driven by store expansion, especially in international markets. The company currently has only 924 warehouse stores, which means there is still a long runway for growth... However, while the stock should deserve a valuation premium, a forward P/E ratio of 48 times may lead to underperformance in the future. With rising macroeconomic uncertainties, this defensive stock may rise due to its defensive attributes. I would not be surprised if the stock announces a split in the near to medium term future."