Overview
Costco Wholesale
COST · NASDAQQ4 FY2026Retail · Membership Warehouse Clubs
Since the Report + 7.4%
Revenue grew 11.1% year over year, EPS beat the estimate by 3.1%; the stock rose 2.9% in its first reaction.
- RevenueQ4
- $95.72B
- ▲ 11.1% YoY · 0.9% Above Estimate
- EPSGAAP · Ex-Refund $6.60
- $6.75
- Estimate $6.55 · 3.1% Beat
Verdict
BUYCostco beat expectations in the fourth quarter with $95.7 billion in revenue and $6.75 in earnings per share; the beat was 0.9% on revenue and 3.1% on earnings. Most of the earnings surprise came from a one-time $0.15 tariff refund, yet the stock closed the next session up 2.9%. The next thing to watch is gross margin excluding gas as the refunds are reinvested in prices.
Close on Report DaySep 24
$922.77▲ 2.9%Report-Day Move
- Market Cap(Today)
- ≈ $439 B
- 1Y Return(At Report)
- − 2%
- P/E(At Today's Price · $20.76 · Trailing 12M)
- 47.7
- PEG(Next Twelve Months)
- 5.25
- Net Margin(Trailing 12M)
- 3.0%
Earnings Summary
In 30 Seconds- Costco beat Q4 estimates with $95.7B in revenue and $6.75 EPS, topping expectations by 0.9% on revenue and 3.1% on earnings.
- Most of the earnings beat came from a one-time $0.15 tariff refund; excluding it, EPS of $6.60 was only 0.8% above estimates.
- Shares fell as much as 1.5% the next session, then closed up 2.9%, helped by 7.3% growth in membership fee income.
The Numbers
Comparable Sales
9.4%
Ex-Gas and FX 6.7%
Renewal Rate (US-Canada)
92.3%
QoQ +0.1 Pt · Worldwide 89.8%
Gross Margin
11.02%
YoY −11 Bps · Ex-Gas +20 Bps
Stock Reaction
▲ 2.9%
Close to Close · Intraday Low −1.5%
Quarterly Revenue ($ Billion)
86.16
Q4 25 · $86.2 B
67.31
Q1 26 · $67.3 B · QoQ − 21.9%
69.60
Q2 26 · $69.6 B · QoQ + 3.4%
70.53
Q3 26 · $70.5 B · QoQ + 1.3%
95.72
Q4 26 · $95.7 B · QoQ + 35.7% · YoY + 11.1%
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26
Q1 FY27 Company Guidance
- Capex 20277.5 billion
No Revenue or EPS Guidance · 2026: 6.4416.6% YoY Increase ▲
- Net New Warehouses 202728 sites
33 Openings, 5 Relocations · FY26: 2512% YoY Increase ▲
Company-Specific Metrics
Membership Fee Income
$1.85 B
▲ 7.3% YoYPress Release
Warehouse Count
939 warehouses
Press Release
Metrics come only from the company's own filings; each one names the document it was taken from.
“Our gas business has had a record year driven by members seeking value in Costco Wholesale's top-tier gasoline. We reinvested some of these dollars to give value back to our members. This was predominantly through price reductions on a number of items.”
- Record Year in Gas
- Refunds Reinvested in Price
- 33 New Warehouses in 2027
Summary and Review
Summary
Costco reported $95.72 billion in revenue for the 16-week fourth quarter ended August 30. That is up 11.1% year over year. The market expected $94.85 billion, so the 0.9% beat sits in the in-line zone. GAAP earnings per share came in at $6.75, beating the $6.55 estimate by 3.1%. The revenue gate is in line and the earnings gate is open. The company gives no financial guidance, so the third gate does not count. Comparable sales rose 9.4%, or 6.7% excluding gas and FX.
The stock closed report day down 0.9% at $896.48. It first spiked to $910 after hours, then settled up 0.2%. The next day it fell as low as $883.10 intraday, or −1.5%. The reason was the mix of earnings: EPS excluding the refund was $6.60, only 0.8% above the estimate. The picture turned during the session. The stock closed up 2.9% at $922.77. In the morning the market read this report as a refund story. By the close it read it as a stability report.
In the decision table, one gate is in line and one is open. That means the 70-79 band and a buy. We put the score at the low end of the band, 71. Reported gross margin contracted 11 basis points year over year. The earnings beat also leans heavily on the refund. The membership side, however, is solid: fee income rose 7.3% and the US-Canada renewal rate rose to 92.3%. The stock is down 2.4% over one year and trades 16% below its 52-week high.
Full Review
Strong revenue, with a push from gas.
Net sales were $93.87 billion. That is up 11.2% year over year. Including membership fees, total revenue reached $95.72 billion. Comparable sales rose 10.7% in the US, 5.0% in Canada and 7.0% in other international markets. In the US, the gain excluding gas and FX was 7.2%. Excluding gas and FX, the total gain was 6.7%. Gasoline explains most of the gap. Price per gallon rose and volumes hit a record. Gas comparable sales grew in the mid-30s percent. Digitally enabled sales rose 19.5%. The jump in the chart needs careful reading. The fourth quarter lasts 16 weeks, the other three quarters 12 weeks. So the meaningful comparison is year over year for the same quarter, not between columns. Full-year revenue was $303.15 billion, up 10.1%.
The earnings beat came from tariff refunds.
GAAP EPS was $6.75. That is up 15.0% from $5.87 a year earlier. Net income was $3.0 billion, up 14.9%. Full-year EPS was $20.76, up 14.0%. But this figure contains a one-time item. The company received $184 million in tariff refunds during the quarter, including $10 million of interest. The release says the refunds added $0.15 to EPS. Excluding the refunds, EPS was $6.60. That is 0.8% above the estimate and 12.4% above last year. So core earnings growth is healthy, but most of the beat is the refund. CEO Ron Vachris said part of the refunds went back to members through price cuts. CFO Gary Millerchip said most of the remaining refunds will be reinvested the same way.
Margin: expanded excluding gas.
Gross margin was 11.02%. That is 11 basis points lower than a year ago. Last year the rate was 11.13%. This contraction is not a sign of weakness. Gas is a low-margin item and its share of sales grew. Excluding gas, gross margin expanded 20 basis points year over year. SG&A was 8.94% of net sales. Management described the impact of higher fuel prices on freight as "manageable." The real question now is the refund reinvestment. The company is turning refunds into price cuts. In the short run that means giving up margin. In return, member traffic and basket size grow. Members were reported to be consolidating trips, with larger baskets. How this price investment will show up in margin once refunds end is still unclear.
The membership model is still the core.
Membership fees are the backbone of Costco's profit. Fee income was $1.85 billion this quarter. That is up 7.3% year over year. Fee income covers nearly half of the quarter's operating income. Paid members rose to 84.1 million, up 3.8%. Executive members, who pay a higher fee, number 42.3 million. This group is more than half of paid members. The US and Canada renewal rate was 92.3%. That is up 0.1 point from the prior quarter. The worldwide rate was 89.8%. New members who sign up online were known to renew at lower rates. This quarter's small uptick suggests that drift has at least stopped. The fee increase effect is now behind. Future fee growth must come from member count and Executive upgrades.
Next quarter, watch one line.
The company gives no revenue or earnings guidance. It only shares its investment plan. It plans 33 openings in fiscal 2027, including 5 relocations and 28 net new. The total warehouse count will rise from 939 to 967. Capital spending will be about $7.5 billion. That is 16.6% above $6.44 billion in 2026. According to the earnings call, a similar amount of refunds is arriving in the first quarter. The rule for readers is simple. Next quarter, watch the change in gross margin excluding gas. If it stays above zero, the company is reinvesting refunds in price while protecting margin. If it falls below zero, this quarter's earnings beat was just the refund. The second gauge is the US-Canada renewal rate. A drop below 92.3% would revive the member quality question.
Looking Ahead
Strengths and Risks
5 Strengths · 5 RisksStrengths
5- Comparable sales rose 9.4%, or 6.7% excluding gas and FX, with growth in all three regions.
- Membership fee income rose 7.3% year over year to $1.85 billion.
- The US-Canada renewal rate rose 0.1 point from the prior quarter to 92.3%.
- Gross margin excluding gas expanded 20 basis points despite reinvesting refunds in prices.
- Digitally enabled sales grew 19.5% and were one of the growth drivers.
Risks
5- Most of the earnings beat came from a one-time tariff refund worth $0.15 per share.
- Once refunds end, price investment could pressure margins.
- Part of sales growth comes from high gas pricesİf prices fall, headline growth slows.
- The worldwide renewal rate of 89.8% remains well below the US-Canada rate.
- Capital spending rises 16.6% to $7.5 billion, which could squeeze free cash flow.
What to Watch
4- September sales results come in early October and will show comparable sales momentum.
- Q1 FY27 results are expected in December 2026; the market expects $4.86 per share.
- Most remaining tariff refunds are planned to be reinvested in price cuts.
- Fiscal 2027 plans call for 33 openings and about $7.5 billion in capital spending.
Upcoming Earnings
To Understand This