Wells Fargo Forecasts Costco Special Dividend for Early 2026
Issaquah, Wednesday, 17 December 2025.
Despite recent stock dips, Costco’s $15 billion cash reserves signal a potential payout. Wells Fargo anticipates a special dividend in early 2026, aligning with the retailer’s three-year historical cycle.
Capital Allocation and Dividend History
Market observers are closely monitoring Costco’s capital allocation strategy following the retailer’s decision not to declare a special dividend during its December 2025 reporting period [1][7]. Despite the lack of an immediate announcement, the company maintains a robust balance sheet with a cash pile of approximately $15 billion and low debt levels, providing the liquidity necessary for significant shareholder returns [3]. Investors have come to expect these substantial one-time payouts roughly every three years, a pattern established over the last decade [3]. The company’s history of special dividends includes payments of $7 in December 2012, $5 in January 2015, $7 in April 2017, $10 in November 2020, and most recently, $15 in December 2023 [3]. Given this cadence, a potential announcement in early 2026 would align with the company’s historical cycle of returning excess cash to shareholders [1].
Fiscal Performance Amidst Market Challenges
The speculation regarding a special payout comes as Costco navigates a period of divergence from broader market trends. As of mid-December 2025, Costco’s stock has declined approximately 3.5% year-to-date, significantly underperforming the S&P 500, which has gained roughly 16.1% over the same period [4]. This represents a performance gap of nearly 20 percentage points 19.6, marking one of the retailer’s most challenging relative performances in over two decades [4]. However, fundamental metrics remain solid. In its fiscal first quarter of 2026, reported on December 8, 2025, the company posted net sales of $65.98 billion, an increase of 8.2% from the previous year [4]. Furthermore, earnings per share came in at $4.50, surpassing analyst expectations of $4.28 by roughly 5.1% 5.14 [4].
Analyst Sentiment and Future Outlook
Despite the earnings beat, Wall Street sentiment remains divided regarding the stock’s immediate trajectory. On December 14, 2025, Roth Capital downgraded Costco to “Sell,” setting a price target of $769, citing concerns over decelerating metrics such as same-store sales growth and membership renewals [8]. Analysts noted that while membership fees rose 14% in the recent quarter, renewal rates in the U.S. and Canada saw a slight dip to 92.2% [4][8]. Conversely, the anticipation of a special dividend serves as a potential catalyst for the stock, which was trading at $858.50 in after-hours sessions on December 16, 2025 [7]. While the immediate focus remains on the retailer’s ability to maintain growth momentum, the prospect of a cash distribution in early 2026 offers a tangible upside for patient investors holding through the current volatility [1][3].