Costco(COST.US)Post-earnings major players praise! Structural advantages are hard to shake, and it is expected to continue capturing market share.

Warehouse club retail chain Costco(COST.US) announced its second fiscal quarter earnings that exceeded market expectations. The company reported no difficulty in increasing and retaining members and expects to benefit this year from tax refunds and potential tariff reimbursements. After Costco announced this latest performance, several major bank analysts issued positive ratings on the stock.

The earnings report showed that for the second quarter of fiscal year 2026 ending February 15, Costco’s revenue increased 9.2% year-over-year to $69.6 billion, surpassing market expectations by $280 million; among which, membership fee income reached $1.36 billion, exceeding market expectations. Overall same-store sales grew 7.4%—with a 4.2% increase in average transaction size and a 3.1% increase in foot traffic—above the market expectation of 6.7%; U.S. same-store sales increased 5.9%, higher than the expected 5.7%. In terms of profitability, operating profit was $2.61 billion, up 12.5% year-over-year; adjusted earnings per share were $4.58, beating the average forecast by 3 cents.

Costco stated that with large package sizes and a unique product selection, the retailer attracts cost-conscious consumers—especially those with higher disposable incomes—thus gaining market share. The retailer has also expanded e-commerce and delivery services and added exclusive shopping hours for premium members.

Bank of America reaffirmed its “Buy” rating on Costco. Analyst Christopher Nardone( said that the retailer’s ongoing strategy of reinvesting profits into pricing has strengthened the bank’s confidence in its continued market share expansion across various product categories. The analyst also pointed out that the growth in the number of executive members) and the stabilization of renewal rates are positive factors. Additionally, the analyst noted that Costco can somewhat resist the impact of rising fuel prices. He stated, “Although soaring gasoline prices may temporarily compress fuel business profits, if oil prices remain high, it could drive more customers to stores because Costco has a price advantage( especially since about half of members visit both gas stations and the warehouse).”

Jefferies also maintained its “Buy” rating on Costco. Analyst Coret Tarlowe( emphasized, “Despite pressures from product mix and claims reserves affecting sales and SG&A expenses, core profit margins have improved. Looking ahead, store expansion, capital expenditure investments, and pricing discipline will continue to be the foundation for gaining market share.”

Morgan Stanley also maintained an “Overweight” rating on Costco, with a target price of $1,130. Analyst Simeon Gutman) pointed out that the company’s execution in member growth, membership fee income, and core profitability remains strong, and comparable sales are expected to accelerate again after entering spring. He stated, “These results once again highlight the company’s structural advantages, including supply chain efficiency, value-based pricing, and scale benefits. We believe these advantages will continue to support its market share expansion and drive long-term profit growth.”

Additionally, analysts from iREIT+ and Hoya Capital Investment Team said, “Costco has delivered another strong report, with steady growth in revenue and profit, mainly driven by robust performance in Canada and international markets… Looking ahead, Costco is expected to continue steady growth, with store expansion—especially in international markets—being a key driver. The company currently has only 924 warehouse stores, which means there is still significant growth runway… However, although the stock deserves a valuation premium, a forward P/E of 48 times might lead to underperformance in the future. As macro uncertainties increase, this stock could rise due to its defensive attributes. I wouldn’t be surprised if there are announcements of stock splits in the near to medium term.”