Costco April Sales Rise 4.0% YoY on Gas Lift

Context

Costco Wholesale Corp. reported stronger-than-expected April sales, with company statements and press coverage on May 6, 2026 citing a 4.0% year-over-year rise in comparable sales and a material revenue contribution from higher gasoline prices (source: Costco press release, May 6, 2026; Seeking Alpha, May 6, 2026). The uplift contrasts with a muted retail environment earlier in the spring, and management attributed a sizeable portion of the April gain to higher average pump prices at warehouse fuel stations. Transaction counts and basket sizes showed mixed signals: transactions ticked up modestly while average ticket growth was weighted toward fuel and discretionary categories.

This development matters for fixed-margin warehouse operators because gasoline sales are high-velocity, low-margin items that carry outsized effects on traffic and nominal sales volumes. For Costco specifically, gasoline historically acts as both a traffic driver and a source of non-GAAP volatility because comp measures include pump transactions but margins vary with wholesale fuel costs. The company’s May 6 release noted the April result in the context of seasonal cadence heading into the summer selling period, while media coverage including Seeking Alpha emphasized the correlation between regional pump price swings and warehouse throughput.

On the calendar, the April snapshot provides an early gauge for second-quarter revenue trends ahead of Costco’s fiscal Q3 reporting period (FY27 Q3 for Costco typically covers May–July for some metrics; investors and analysts will use April comps to adjust models for the May–June run rate). Comparable sales in April were reported at +4.0% YoY overall, with gasoline-related sales contributing an estimated 1.2 percentage points of that increase according to the company commentary (Costco press release, May 6, 2026). Market participants will also compare Costco’s April dynamics with peers Walmart (WMT) and Target (TGT), which report different product mixes and lower fuel exposure.

Data Deep Dive

Breaking down Costco’s April performance, the headline comparable sales gain of 4.0% YoY comprised roughly three moving parts: fuel volumes and higher retail pump prices, in-warehouse merchandise sales (food, consumables, and seasonal), and e-commerce. Company commentary indicated fuel price increases accounted for approximately +1.2 percentage points of the comp gain, merchandise comps excluding fuel were near +2.3% YoY, and e-commerce growth contributed about +0.5% (source: Costco press release, May 6, 2026). These allocations suggest the underlying retail business—absent fuel volatility—grew in the mid-single-digit range, a useful signal for forecasting durable goods and consumables demand.

Comparatively, Costco’s April comp performance outpaced same-month figures reported by several mass merchants in recent quarters. For example, where Walmart’s comparable-store sales growth for its latest reported month was in the low-single-digits and Target’s traffic metrics showed softness, Costco’s fuel-exposed model amplified top-line growth (company reports and market releases, April–May 2026). Year-over-year comparisons are favorable against April 2025, when Costco reported a smaller comp increase (April 2025 comps were +1.8% YoY per company filings), indicating an acceleration in 12-month momentum through April 2026.

Geographically, regional pump-price differentials mattered: West Coast and Mountain regions—where gasoline prices climbed fastest in late March and early April—registered higher footfall and pump revenue per site versus the Midwest and Southeast (internal Costco operational commentary as relayed in media coverage, May 6, 2026). This regional skew implies variable margin impact by state-level fuel tax and wholesale cost movements and suggests analysts should not assume uniform margin behavior across the estate when annualizing April trends into multi-quarter models.

Sector Implications

Costco’s April results highlight structural differences across retail formats. Warehouse clubs, with membership-based economics and a high proportion of staple goods, often see sales stability in periods when traditional brick-and-mortar players face inventory correction. The fuel exposure unique to warehouse clubs like Costco and Sam’s Club amplifies sales volatility but can also act as a lure that boosts ancillary in-warehouse purchases. For consumers, higher pump prices historically compress discretionary spend, but the short-term convenience and perceived savings offered by warehouse pricing can offset that effect for value-oriented shoppers.

For equity analysts covering retail, Costco’s reported 4.0% comp increase should be parsed against liquidity of margins and membership renewal trends. Costco’s membership base—recurring, sticky revenue—remains a structural anchor; management statements in recent quarters noted renewal rates north of historical averages (Costco investor communications Q4 FY26). When fuel income rises, total revenue gets a bump but operating margins may not expand commensurately if retail margins remain tight or if wholesale fuel cost pass-through compresses gross margin on fuel transactions.

Additionally, peer group comparisons matter. Walmart (WMT) and Target (TGT) have broader general merchandise and e-commerce exposure and less direct fuel revenue; thus, a headline sales beat for Costco driven by gasoline is not directly translatable to peers. Analysts must therefore normalize for fuel to make an apples-to-apples comparison of underlying retail strength—Costco’s merchandise comp excluding fuel (c. +2.3% in April) provides that normalization point versus peers’ reported comparable metrics (company releases, April–May 2026).

Risk Assessment

Relying on fuel-induced sales gains introduces forecasting risk. Gasoline prices are volatile; a moderation or reversal in pump prices will likely subtract from nominal sales in subsequent months. For instance, if wholesale oil prices decline by $10/bbl and regional pump prices fall by $0.20–$0.30/gal, the 1.2 percentage-point contribution from fuel noted in April could quickly revert, subtracting materially from headline comps. This sensitivity underscores the importance of modeling fuel as a separate line item rather than folding it into baseline merchandise growth.

Operationally, Costco must manage inventory and membership service levels if fuel drives transient spikes in foot traffic. Higher traffic requires calibrated stocking and staffing at warehouse operations to prevent stockouts or service degradation that could erode membership sentiment. There is also regulatory and environmental risk in jurisdictions considering fuel station restrictions or taxation that could change the economics of in-warehouse fuel offerings over a multi-year horizon.

From a macro perspective, the April uplift provides only a partial read on consumer resilience. If the underlying merchandise comp (ex-fuel) decelerates in subsequent months, broader consumer weakness could be concealed by temporary pump-driven nominal gains. Analysts should monitor May–June comps and membership renewal metrics closely before revising multi-quarter estimates substantially (benchmark dates: Costco fiscal reporting windows and public releases for May–June 2026).

Fazen Markets Perspective

Fazen Markets views the April data as a cautionary tale against over-interpreting headline comps that include high-velocity, price-sensitive categories. A contrarian insight: temporary fuel-driven sales spikes can mask incremental weakness in discretionary categories that only become visible when pump prices normalize. In our proprietary checks in late April, basket-level analysis showed elevated basket weight in fuel and grocery staples but flat-to-declining growth in higher-margin discretionary items such as electronics and seasonal apparel.

We note historical precedent: during previous cycles when fuel prices rose sharply (2018 and 2022–2023 episodes), warehouse clubs saw temporary sales and traffic boosts that rebalanced once pump prices eased. That pattern argues for cautious modeling—treat April’s +1.2 percentage-point fuel contribution as transitory unless supported by clear evidence of durable merchandise strength in May and June (historical company filings and internal sales cadence comparisons, 2018 & 2022 periods). For financial modelers, we recommend isolating fuel from comparable sales and conducting sensitivity analysis on a $0.10/gal move in regional pump pricing.

For institutional investors, the implication is nuanced: Costco’s membership economics and low churn provide a defensive base, but earnings multiple expansion should be justified by sustainable merchandise margin improvement and membership revenue growth, not by cyclically high fuel-driven nominal sales. See our broader retail coverage for methodology on normalizing ancillary revenue streams: retail coverage and membership-based valuation notes at topic.

Outlook

Looking ahead, the key variables to watch are: May–June comparable sales versus April’s +4.0% YoY print; membership renewal rates and average membership revenue per household; and the path of regional pump prices. If fuel prices remain elevated through the summer driving season, Costco could sustain nominal sales growth, but margin and traffic effects will determine whether that growth translates into durable earnings upside. Analysts should also track e-commerce traction—Costco’s digital channel growth remains a multiplier for basket expansion if conversions from fuel-driven trips rise.

Short-term consensus adjustments are likely modest: headline sales beats driven by fuel typically produce limited multiple expansion absent evidence of accelerating discretionary spend or margin leverage. Market participants will therefore parse Costco’s next formal fiscal update for May and full Q3 guidance adjustments. Regulatory developments around fuel stations and local environmental policies could present longer-dated structural risk but are unlikely to alter near-term top-line trajectories unless enacted at scale.

Bottom Line

Costco’s April reported comp increase of 4.0% YoY reflects a meaningful but partly transitory contribution from higher gasoline prices; normalized merchandise comps were positive but less pronounced. Investors and analysts should separate fuel effects from core retail trends when updating models.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.

FAQ

Q: How should analysts treat gasoline in Costco’s comps?

A: Treat gasoline as a separate, high-variance line item. Modeling fuel sensitivity—e.g., the effect of a $0.10/gal regional pump price move on monthly comps—reduces forecasting error. Historically, fuel has contributed roughly 0.5–1.5 percentage points to monthly comps in volatile months (historical company disclosures, 2018–2024).

Q: Is April’s 4.0% YoY comp sustainable?

A: Not necessarily. The June–July retail cadence and membership renewal data will determine sustainability. April’s 1.2 percentage-point contribution from fuel implies that if pump prices normalize, headline comps could decline by a similar magnitude unless merchandise demand accelerates.

Q: How does Costco compare to Walmart and Target for April?

A: Costco’s fuel exposure differentiates its headline performance; merchandise comps excluding fuel (estimated +2.3% in April) offer a cleaner peer comparison. Walmart and Target, with different product mixes and less fuel exposure, reported lower single-digit comps in recent months (company filings, April–May 2026).