REVENUEMiss -1.2%
EPSBeat +3.2%
Actuals vs. estimates
| Metric | Actual | Consensus | Surprise |
|---|---|---|---|
| RevenueNet sales (16 weeks) | $93.87B | $94.97B | ▼ Miss -1.2% |
| EPS(GAAP diluted) | $6.75 | $6.54 | ▲ Beat +3.2% |
Verdict
- Diluted EPS of $6.75 beat the $6.54 estimate by $0.21, or 3.2%, while net sales of $93.87 billion missed the $94.97 billion estimate by $1.09 billion, or 1.2%.
- Net sales rose 11.2% to $93.9 billion from $84.4 billion on total company comparable sales of 9.4%, 6.7% excluding gasoline and foreign exchange; digitally-enabled comparable sales rose 19.5%.
- Operating income rose to $3,801 million from $3,341 million and net income to $2.998 billion from $2.610 billion; the release carries no guidance.
- The one thing that matters: the earnings beat is largely a tariff refund rather than trade. A non-recurring $0.15 per diluted share from IEEPA refunds accounts for most of the $0.21 beat, while net sales landed $1.09 billion light, so the operating quarter is closer to in line than the headline reads.
Key metrics
| Metric | Reported | Prior year | Change |
|---|---|---|---|
| Comparable sales, Total Company (16 weeks) | 9.4% | — | — |
| Comparable sales, Total Company, excluding gasoline and FX (16 weeks) | 6.7% | — | — |
| Comparable sales, Digitally-Enabled (16 weeks) | 19.5% | — | — |
| Membership fees (16 weeks) | $1,850 | $1,724 | — |
| Operating income (16 weeks) | $3,801 | $3,341 | — |
| IEEPA tariff refund benefit to diluted EPS (16 weeks) | $0.15 per diluted share | — | — |
Guidance changes
No financial guidance change disclosed.
Quality of earnings
- Strip the one-time item and the beat nearly disappears. The $6.75 diluted result includes a non-recurring $0.15 per share benefit from IEEPA tariff refunds, net of partial reinvestment in member values, leaving roughly $6.60 of underlying earnings against the $6.54 estimate.
- Earnings grew faster than sales, and the refund sits in the gap. Operating income rose 13.8% to $3,801 million and net income 14.9% to $2.998 billion against 11.2% net sales growth, with the tariff benefit inside those lines.
- The membership annuity compounded more slowly than the box. Membership fees rose 7.3% to $1,850 million from $1,724 million, against 11.2% growth in net sales.
Gotchas & watch items
- The top line missed even on a strong comparable: $93.87 billion of net sales against a $94.97 billion estimate, a $1.09 billion shortfall, despite 9.4% total company comparable sales.
- Reported comparable sales lean on gasoline and currency. Total company comparable sales of 9.4% fall to 6.7% excluding those effects, a 2.7-point gap.
- Membership fee growth of 7.3% to $1,850 million trails net sales growth of 11.2%, so the highest-margin revenue line is the slowest-growing one this quarter.