Aug 21, 2026 earnings call — Strong quarter driven by membership and fuel
Net sales were $6.1 billion, up 15.9% year-over-year, with adjusted EPS of $1.36.
Revenue $6.2B (est $6.0B) · EPS $1.36 (est $1.17)
Key quotes
"We reached a new milestone of 8.5 million members this quarter, and that's worth pausing on. Over the last 25 years, we've grown our membership fee income at an 8% CAGR."
"Fuel profit exceeded plan, supported by strong execution and favorable market conditions during the quarter. Comp gallons increased 10.5%, and we continue to take share as industry data indicates overall comp fuel gallons declined by approximately 5% during the period."
"Digitally enabled comp sales grew 30% in the quarter, reflecting 2-year stacked comp growth of 64%, and our members are telling us loud and clear, they love what we're doing."
"CMP is about going deep on what our members want from us, category by category, making sure we have the right assortment at the right cost."
Analyst Q&A 9
use of extra cash and sale-leaseback
Q (Edward Kelly · Wells Fargo): How much of the tariff refunds and strong fuel profits were reinvested into the business and what return do you expect? Also parse the operating expense and the sale-leaseback impact.
A: Management said they are investing in members for long-term lifetime value rather than seeking quick quarterly payback. They said the tariff refunds are mostly through and some fuel dollars were invested in membership, and the Ohio distribution center sale-leaseback added about $11 million to P&L.
"We obviously had the tariff refunds that you mentioned for the past couple of quarters, and we're just about through those as we sit here today." — Robert Eddy (CEO·CHAIR)
membership and traffic drivers
Q (Peter Benedict · Baird): Why did membership fee income grow and are higher-tier renewals driving that? Also, how much of merchandising comps is traffic versus ticket?
A: They said membership growth was strong with a 10% increase, strong acquisitions, high renewal rates and all-time high higher-tier penetration at about 43%. They said roughly half of the comp was driven by traffic and they expect to finish the year around a 6% exit rate for membership fee income.
"About half of the comp was driven by traffic. That was pretty significant acceleration from what we saw in the first quarter." — Robert Eddy (CEO·CHAIR)
sustainability of price cuts and general merchandise
Q (Katharine McShane · Goldman Sachs): Can price investments funded by tariff refunds continue when refunds fade? And what should we expect from general merchandise in Q3/Q4 with new merchandising leadership?
A: They said they plan to match investments with other funding sources in the back half, like supplier conversations, assortment changes, retail media and gas, and they do not expect a precipitous margin decline. On general merchandise, they said early wins are coming, especially in consumer electronics and Home, Stephanie Reibling is leading improvements, and they expect continued progress though Q4 is a big lap to lap.
"Nice to see a continued positive comp trend. Nice to see the breadth of the comp." — Robert Eddy (CEO·CHAIR)
Texas expansion and performance
Q (Michael Baker · D.A. Davidson): You're 30% ahead of plan in Texas — how big can it get, are competitors reacting, and what are you seeing early? Also, how were sales paced through the quarter by month?
A: They said Texas is delivering the expected outside membership gains and strong engagement across categories, with encouraging gas gallons as an early sign of renewals. They plan more openings (Mesquite later this year, Tyler early next year) and said sales were fairly ratable through the quarter with nothing variable by month to call out.
"We're seeing outside membership gains. We're seeing the membership engage throughout the club across categories, and we shared some data in terms of the gas program down there and what we're seeing in terms of gas gallons." — William Werner
SKU count reduction and gas as acquisition tool
Q (Charles Grom · Gordon Haskett): Can you explain the SKU reduction effort and how many items new stores open with? Also, how are you using gas growth to acquire new members?
A: They said CMPs are being used to remove unnecessary choice while adding new products and white space, targeting about a 20% SKU reduction over the next couple years to reach roughly 6,000–6,500 SKUs. For gas, they said they use gas discounts and programs to drive membership acquisition and that structural investments (more stations, co-branded card) enabled the 10.5% gas gallon growth that supports member value and EPS.
"So our goal really is to take about 20% of our SKUs out over the next couple of years, and that will sort of happen ratably." — Robert Eddy (CEO·CHAIR)
merch margin cadence and membership drivers
Q (Pedro Gil Garcia Alejo · Morgan Stanley): How should we think about merch margin cadence as tariff refunds diminish, and how much of MFI growth came from fee increases versus new/existing club member count?
A: They said they don't guide to merch margin and will balance investments with sources of funds while watching traffic and market share as indicators. On membership fee income, they would not break out new-club specifics but said total members reached 8.5 million, higher-tier penetration and co-branded card engagement are meaningful contributors to MFI growth and member quality has improved.
"We don't give specific numbers on how much is coming from new clubs." — Laura Felice (CFO)
EPS drivers and new-club maturity
Q (Steven Zaccone · Citi): How does the EPS raise break down (fuel, sale-leaseback, etc.) and what's the maturation timeline for new clubs like those in Texas?
A: They said the EPS raise was driven largely by gas outperformance, with some quarter investments and the sale-leaseback contributing modestly, and they kept the comp guidance unchanged. For new clubs, they said clubs generally mature toward regular potential within about 3 to 5 years and cited consistent historical data showing membership and spend ramp over that period.
"Generally, within 3 to 5 years, you're seeing the club mature up towards its regular potential, and then it would kind of grow with the chain from there." — William Werner
digital engagement and private label role
Q (Gabriella Garr · TD Cowen): How do digitally engaged members differ in spend and retention, and how do private labels fit into your value strategy and expansion opportunities?
A: They said digitally engaged members become more valuable over time: they shop more, visit clubs more, buy more and renew at higher rates, and they are pushing ExpressPay and other digital features to deepen engagement. On private labels, they said owned brands are a several-billion-dollar business, delivering quality and value (example: Berkley Jensen paper towels priced about 35% lower than national brand) and driving high unit share and margin benefits.
"The more digital properties they interact with, the better they are." — Robert Eddy (CEO·CHAIR)
ticket drivers and club opening pace
Q (Gregory Melich · Evercore): How much of ticket growth was inflation versus unit/basket, and how many clubs will you open this year and next and can you accelerate openings?
A: They said inflation was about 1% in the quarter and the 3.1% comp was roughly balanced between traffic and basket. For openings, they said they are running about a 12 to 15 club pace currently, committed to maintaining a 25% to 30% cadence every couple of years, and they are working pipeline projects for the next several years and could accelerate if opportunities arise.
"We've gone from not opening clubs a few years ago to opening at sort of a 12 to 15 clip at this point." — Robert Eddy (CEO·CHAIR)