Costco Wholesale Corporation (Costco (COST)) stock is trading relatively flat on Friday after the company reported third-quarter results that highlighted strong consumer demand, rising digital engagement, and record fuel volumes.
On Thursday, Costco reported third-quarter results that beat expectations, with executives discussing performance during the earnings call. The warehouse retailer said shoppers continued to prioritize value amid economic uncertainty, with higher fuel prices and geopolitical disruptions influencing spending patterns during the quarter.
Record Fuel Demand
Costco's fuel business set consecutive all-time volume sales records during the quarter as inflationary pressures, elevated gasoline prices, and geopolitical tensions in the Middle East drove more consumers to seek lower-cost fuel options.
During the earnings call, Chief Executive Officer Ron Vachris said the final five weeks of the quarter ranked as the five highest-volume fuel weeks in Costco's history, highlighting growing consumer demand for value amid rising costs at the pump.
Executives linked the surge to elevated gasoline prices and increased price sensitivity among consumers. Costco said high gas prices pushed many members to use its fuel stations for the first time in the third quarter. The company believes these new fuel customers could become more loyal over time, as members who buy gas at Costco typically shop more and spend more inside its warehouses.
Sales Growth Remains Strong
Costco reported third-quarter revenue of $70.53 billion, exceeding analyst expectations. Comparable sales increased 9.8%, while adjusted comparable sales rose 6.6% after excluding fuel price and currency effects. Digital comparable sales advanced more than 20%, reflecting continued momentum in online channels. Traffic increased globally, while average transaction values also moved higher.
Costco Membership Trends Show Stability
Membership fee revenue climbed nearly 11% from the prior year. Executive memberships expanded 9.6%, reaching 41.2 million. Total paid memberships reached 82.9 million. Renewal rates also improved in the U.S. and Canada. Chief Financial Officer Gary Millerchip said the company continues to see healthy engagement despite slower membership growth compared with prior years.
Technology And Expansion Efforts Continue
Costco opened four net new locations during the quarter. The company now operates 928 warehouses worldwide. Management continues to target long-term unit growth and expects 26 net new openings during fiscal 2026. The company also expanded digital initiatives. Same-day delivery services launched in Spain and France, while personalized product recommendations generated stronger online conversion rates.
Costco AI And Pricing Strategy
Costco said artificial intelligence is becoming increasingly important in online product discovery. The retailer reported triple-digit growth in AI-driven traffic, although volumes remain relatively small. Executives also emphasized a commitment to lowering prices when costs decline. The company reduced prices on several Kirkland Signature products and said it remains focused on delivering value to members.
COST Price Action: Costco Wholesale shares were down 0.72% at $988.03 during premarket trading on Friday, according to market data.
