Key Takeaways
- The warehouse giant reported fiscal Q4 earnings of $6.75 per share, surpassing Wall Street’s $6.54 consensus estimate.
- Top-line performance showed an 11% year-over-year increase to $95.7 billion, exceeding analyst projections of $94.9 billion.
- Annual profit grew 14% to reach $20.78 per share, with yearly revenue hitting $303.1 billion.
- The deceleration in membership fee revenue has persisted for three consecutive quarters, drawing significant attention from market watchers.
- Shares declined 1% on Thursday, settling at $896.48, and currently trade 18% beneath the 52-week peak.
Costco Wholesale delivered results that exceeded analyst forecasts for its fiscal fourth quarter, yet the market response was muted. Shares fell 1% on Thursday, closing at $896.48, with minimal movement in subsequent trading.
Costco Wholesale Corporation, COST
The membership-based retailer posted quarterly profits of $6.75 per share for the period concluding August 30. This figure exceeded the FactSet consensus of $6.54 per share from surveyed analysts.
Top-line results showed an 11% year-over-year jump to $95.72 billion, surpassing Wall Street’s $94.97 billion projection. Net sales, which comprise the majority of total revenue, expanded to $93.87 billion from the prior year’s $84.43 billion.
Looking at the complete fiscal year, profits climbed 14% to $20.78 per share. Annual top-line performance grew 10% to $303.1 billion, also exceeding forecasts.
Comparable sales registered a 9.4% increase during the quarter. Domestic U.S. operations led performance with 11% expansion, while international markets grew 7% and Canadian operations rose 5%.
Digital-enabled comparable sales surged nearly 20%. When adjusting for fuel price fluctuations and foreign exchange impacts, same-store sales increased 6.7% across the company.
Membership Revenue Deceleration Raises Questions
The slowdown in membership fee revenue has now extended to three consecutive quarters, a trend capturing analyst scrutiny. UBS analyst Michael Lasser acknowledged “solid profitability management” while highlighting the decelerating momentum as the primary concern for investors moving forward.
This represents a departure from the pricing strength Costco has traditionally relied upon. The warehouse chain has maintained its iconic $1.50 hot dog and soda combination unchanged, and implemented price reductions on multiple Kirkland Signature products in June.
Despite these pricing actions, same-store sales momentum remained robust, posting increases of 8.8% in June, 8.9% in July, and 8.4% in August. Management attributed August’s slight moderation to calendar timing around Labor Day.
Fuel Sales and Tariff Relief Support Performance
CEO Ron Vachris highlighted gasoline as a standout performer. He noted that escalating fuel costs connected to Middle Eastern conflicts drove increased member traffic to Costco’s gas stations, which achieved record annual performance.
“Our gas business has had a record year, driven by members seeking value in Costco’s top tier gasoline in the face of rising prices,” Vachris told investors on Thursday’s call. He added that the share of U.S. member households buying gas from Costco hit an all-time high in fiscal 2026.
Tariff reimbursements also contributed to quarterly results. The retailer collected $184 million in refunds and redirected a substantial portion toward price reductions on essentials including fresh produce, meat products, beverages, and select household items.
CFO Gary Millerchip explained that this refund amount represents slightly more than one-third of the total the company anticipates receiving in the current quarter. He emphasized Costco’s commitment to channeling the majority of these funds into competitive pricing strategies.
“Our members continue to show resilience in their spending, and they show a willingness to spend in discretionary areas where they’re seeing exciting new items at great value,” Millerchip said.
Year-to-date, Costco shares have gained 4%, though they remain 18% below the 52-week closing high of $1,094.32 achieved in May. That previous peak preceded disappointing earnings results and membership growth concerns that triggered a sell-off.
During fiscal 2026, Costco launched 28 new warehouse locations, including three relocations. The expansion roadmap for fiscal 2027 includes 33 additional locations, with five relocations, maintaining the company’s strategy of approximately 30 net new warehouses annually.
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