Costco Beats Market Expectations as Shoppers Seek Value

2026-09-25 companies

Issaquah, Friday, 25 September 2026.
Costco reported strong fourth-quarter earnings, beating Wall Street estimates with $95.7 billion in revenue. Results were boosted by resilient consumer spending and $184 million in tariff refunds.

Fiscal Fourth-Quarter Performance

Costco Wholesale Corporation (NASDAQ: COST) released its fiscal fourth-quarter results on 24 September 2026, reporting total revenue of $95.72 billion [2]. This figure surpassed the FactSet estimate of $94.97 billion [1]. Earnings per share (EPS) reached $6.75, exceeding the expected $6.54 [1]. The results cover the 16-week period ending 30 August 2026 [5]. Net income for the quarter was $2.998 billion, compared to $2.610 billion in the prior year [5]. This represents a year-over-year increase of 14.866 percent [5]. A portion of this performance was aided by a non-recurring benefit of $0.15 per diluted share from IEEPA tariff refunds [7]. Excluding this benefit, net income growth remained robust at 12.3% [7].

Consumer Spending and Inflation Dynamics

Comparable sales grew 9.4% year-over-year, or 6.7% when adjusted for gas and foreign exchange [4]. Management described inflation as running in the low single digits, noting specific pressures in beef and petroleum-based products [2]. Conversely, items such as eggs and dairy experienced deflation during the period [2]. Membership fee revenue increased 7.3% year-over-year to $1.5 billion [6]. The worldwide renewal rate stood at 89.8%, with higher retention in the U.S. and Canada at 92.3% [7]. Digitally-enabled sales accounted for approximately 10% of total revenue, growing 19.5% year-over-year [2].

Warehouse Expansion and Capital Allocation

As of the end of the fiscal year, Costco operated 939 warehouses globally [5]. The company plans to open 28 net new warehouses in fiscal year 2027 [2]. Capital expenditures for property and equipment totaled $6.435 billion for the fiscal year [5]. Future plans include reaching 1,000 total warehouses by fiscal year 2029 [2]. Management indicated that stock buybacks are not attractive at current valuations, preferring special dividends to return excess cash [2].

Market Reaction and Investor Outlook

On 24 September 2026, Costco stock closed at US$896.48, reflecting a 0.91% decrease [1]. Traders had anticipated a potential move of up to 3% in either direction following the earnings release [3]. Analysts remain largely bullish, with a mean target suggesting significant upside potential [3]. The growth rate for membership revenue declined for a third-straight quarter despite the fee increase [6]. Investors are closely watching membership growth as a key indicator of future performance [3].

Sources

Retail Trends Costco Earnings