Key Highlights
- Costco’s Q4 earnings release is scheduled for September 24, with the company already disclosing fourth-quarter net sales of $93.9 billion, representing an 11.3% increase year-over-year
- The warehouse retailer has experienced declining membership renewal rates, which fell to 92.1% in Q2 FY2026 from prior levels, though executives indicate the trend may be stabilizing
- A significant expansion of Costco’s Uber Eats delivery service has occurred, jumping from 17 states to 48 states and encompassing approximately 600 store locations nationwide
- RBC Capital continues to hold a Sector Perform rating on the stock with a $1,000 price target, forecasting Q4 earnings per share of $6.54
- Analyst consensus leans toward Moderate Buy, with average price targets hovering around $1,090, suggesting potential upside of approximately 21%
With its fourth-quarter earnings announcement approaching on September 24, Costco enters the event with considerable visibility into its top-line performance. Shares traded near $903 on Wednesday, experiencing modest gains following the announcement of an expanded delivery partnership with Uber Eats.
Costco Wholesale Corporation, COST
The retailer’s fourth-quarter net sales reached $93.9 billion, marking an 11.3% year-over-year increase. Comparable store sales advanced 9.4%, while adjusting for fuel price fluctuations and currency exchange effects brings that figure to 6.7%. Digital sales experienced robust growth of 19.5%.
Given Costco’s practice of releasing monthly sales data, market participants already possess comprehensive insight into revenue performance ahead of the earnings announcement. The primary unknown centers on operational efficiency and how effectively the company converted sales volume into bottom-line earnings.
Analyst consensus anticipates earnings per share growth of 11.4% and revenue expansion of 10.1% compared to the prior year period. RBC Capital holds a marginally more bullish stance, forecasting adjusted earnings per share of $6.54 versus the Street consensus of $6.50.
Membership Renewal Metrics Under Scrutiny
The more significant storyline for the upcoming earnings release involves membership dynamics. The retailer has witnessed consecutive quarterly declines in renewal rates, sliding from 93.0% in Q2 FY2025 down to 92.1% in Q2 FY2026.
Costco previously acknowledged this trend in late 2024, explaining that members acquired through digital channels have historically exhibited somewhat lower renewal rates compared to in-store signups. Company leadership now suggests the pressure may be abating.
Chief Financial Officer Gary Millerchip characterized renewal rates as having stabilized during the most recent earnings call, though he refrained from providing specific forward-looking guidance on the metric.
While membership fees constitute a relatively modest portion of total revenue, their contribution to profitability is disproportionately significant. During FY2025, the company generated $5.32 billion from membership fees, accounting for approximately 51% of its $10.38 billion in operating income.
The sustained decline in renewal rates across multiple quarters has created headwinds for the stock. COST currently trades roughly 4% below its closing price immediately following the Q3 report and approximately 8% below levels preceding that announcement.
Nationwide Uber Eats Partnership Adds Strategic Dimension
Wednesday brought news that Uber Eats has dramatically expanded its Costco delivery partnership, scaling from 17 states to 48 states across the United States, with coverage now extending to nearly 600 Costco warehouse locations.
The partnership includes promotional incentives for Costco members, offering 50% off the first year of Uber One membership, followed by a 20% discount in years thereafter.
Costco’s membership base totaled 82.90 million as of June 2026, representing a growth rate that decelerated by 4% on a year-over-year basis. The expanded Uber Eats arrangement appears designed to enhance the value proposition for current members while potentially attracting new membership signups.
Research from Edgewater on Tuesday suggested that DoorDash may be exploring the possibility of establishing its own delivery arrangement with Costco, and that the warehouse club could potentially restrict delivery access exclusively to members.
RBC Capital indicated it does not anticipate a significant shift in investor sentiment following the September 24 earnings release. The firm’s $1,000 price objective reflects approximately 40 times its FY2028 adjusted earnings per share projection of $25.00.
Among 21 analysts providing coverage of the stock, 15 maintain Buy ratings, five have Hold recommendations, and one rates it a Sell. The consensus price target stands at $1,090.79.
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