Costco Wholesale Corp. (COST) is navigating heightened scrutiny as a lawsuit filed by Donald Trump alleges the retailer facilitated a breach of campaign finance laws. Investors are closely watching the company’s Q1 2026 earnings report, set for release on February 13, 2026, with consensus revenue expectations at $68.5 billion and adjusted EPS of $3.42, reflecting a 7.2% year-over-year growth. The legal exposure adds volatility to an otherwise strong fundamental outlook.
- Donald Trump has filed a lawsuit against Costco alleging campaign finance violations via a third-party vendor arrangement in 2020.
- Q1 2026 earnings are expected to report $68.5 billion in revenue and $3.42 in adjusted EPS, representing 7.2% and 6.8% year-over-year growth, respectively.
- Costco’s stock has been stable near $615 since mid-2024, but legal uncertainty could trigger short-term volatility.
- The earnings call on February 13, 2026, will be a key moment for investor sentiment as the company addresses both financial results and legal risks.
- Analysts are watching for any signals on increased compliance costs or policy changes due to the lawsuit.
- Same-store sales have grown double digits for five consecutive quarters, strengthening the fundamental outlook despite external pressures.
Costco is under legal pressure as former President Donald Trump has formally sued the company, alleging that it enabled a coordinated effort to violate federal election finance regulations through a third-party vendor arrangement in 2020. The lawsuit, filed in the U.S. District Court for the District of Columbia, claims Costco failed to conduct adequate due diligence on a political advocacy group that received funding through the retailer’s membership program. The legal action, while still in early stages, has drawn significant media attention due to its political dimensions and potential reputational fallout. The upcoming Q1 2026 earnings report, scheduled for February 13, 2026, represents a pivotal moment for Costco’s stock, which has traded in a narrow range around $615 since mid-2024. Analysts are projecting $68.5 billion in revenue, a 7.2% increase from the same quarter in 2025, driven by steady membership growth and modest inflation-linked pricing. Adjusted earnings per share are expected to reach $3.42, up 6.8% year-over-year, supported by disciplined cost management and strong warehouse traffic. These results would mark the fifth consecutive quarter of double-digit same-store sales growth, reinforcing the company’s resilience in a high-interest-rate environment. Market participants are assessing how the lawsuit could influence investor sentiment. While no financial damages are currently claimed in the complaint, the legal exposure could lead to increased scrutiny of Costco’s vendor oversight and political spending compliance policies. The outcome may affect the company’s public relations strategy and potentially prompt internal policy reviews. Share price reactions are likely to be sensitive to any mention of legal risk during the earnings call. Retail investors, institutional funds, and equity analysts with exposure to consumer staples are closely monitoring the intersection of legal developments and financial performance. The combination of a high-profile legal challenge and a key earnings release could generate short-term volatility, particularly if the company’s guidance for the fiscal year reflects caution related to regulatory risks.