Costco Stock Slides Despite Earnings Beat as Rising Fuel Prices Spark Inflation Concerns
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May 29, 2026
6:22 am
Costco Stock Slides Despite Earnings Beat As Rising Fuel Prices Spark Inflation Concerns

Costco Wholesale (NASDAQ: COST) is heading toward its weakest weekly performance in nearly two months, even after delivering a solid fiscal third-quarter earnings report, as investor concerns over inflation and rising fuel prices continue to weigh on sentiment.

Although the warehouse retailer posted an earnings beat, markets focused more on the inflationary implications of surging gasoline demand across its fuel stations.

Record Fuel Demand Drives Customer Traffic

During the earnings call, Costco CEO Ron Vachris said elevated gasoline prices and supply disruptions linked to geopolitical tensions in the Middle East significantly boosted traffic at Costco gas stations.

The company reported record-breaking fuel volumes throughout the quarter, with multiple fiscal periods setting new all-time highs.

“The result was record-breaking volumes all three four-week fiscal periods of the quarter, with the final five weeks becoming our top five volume weeks ever,” Vachris said.

Higher fuel prices encouraged more shoppers to visit Costco gas stations for the first time, with many attracted by lower prices compared to competitors. The company also noted that fuel customers often become more frequent warehouse shoppers, supporting long-term membership value.

Gas Savings Boost In-Store Spending

Costco executives highlighted that members who regularly purchase fuel tend to increase in-store spending as well, reinforcing gasoline’s role as a key traffic driver for the business.

This trend reflects broader consumer behavior shifts as households adjust spending patterns amid persistent inflation and higher living costs.

Inflation Pressures Remain in Focus

Despite strong operational performance, Costco management acknowledged ongoing inflation risks.

Chief Financial Officer Gary Millerchip said inflation rose modestly in Q3, largely driven by higher gasoline prices.

He added that price declines in categories like produce, eggs, and dairy helped offset some inflationary pressure.

However, Millerchip warned that inflation could increase in select non-food categories as higher input costs, particularly resin-related expenses, work through supply chains.

The company also reiterated its intention to return tariff-related funds to customers, although timing and scale remain uncertain due to ongoing legal and operational considerations.

Q3 Financial Performance

Costco reported revenue of $69.15 billion, slightly below analyst expectations of $69.2 billion.

Earnings per share came in at $4.90, in line with estimates.

U.S. comparable sales excluding fuel rose 6.8%, showing continued strength in core warehouse demand.

Stock Performance

Costco shares edged slightly higher in overnight trading, but the stock is still heading for its weakest weekly performance in two months.

Despite short-term pressure, COST remains up more than 15% year-to-date, supported by steady membership growth and resilient consumer demand.

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