COST 1QFY26 First Take: Overall results remained solid.Top-line and OP YoY growth edged up QoQ and slightly beat consensus, a clear bright spot.

However, same-store traffic growth continued to slow and missed expectations.The better sales and financials appear entirely driven by a higher average ticket.

New member additions slowed, and renewal rates kept declining.These remain negative signals.

Details follow.Key points below.

1) Revenue grew 8.3%, a modest acceleration vs. last quarter and above expectations.Driven by a 3.2% increase in average ticket on comps (vs. 1.9% prior), which pushed comparable sales growth from 5.7% to 6.4%.

2) That said, traffic growth on comps fell from 3.7% to 3.5%, missing the Street.As a result, ex-FX and gas, comps were 6.4%, flat QoQ with no real improvement.

3) On member metrics, net new paid members were +0.4 mn QoQ, the smallest quarterly add since 2019.Global and North America renewal rates fell another 10bps QoQ, down 80bps cumulatively over the past three quarters.

4) On a slightly positive note, the SG&A ratio did not widen meaningfully, up just 1bp YoY, while GPM increased 4bps YoY.This helped OP growth return to double digits at 12.2% YoY.$Costco Wholesale(COST.US)