Costco Wholesale Q4 Earnings Call Highlights

Costco Wholesale Q4 Earnings Call Highlights

Strong fourth-quarter performance: Costco’s net income reached $2.998 billion, or $6.75 per diluted share, while sales rose 11.2% to $93.87 billion. Results included a $0.15-per-share tariff-refund benefit; excluding it, earnings still increased more than 12% year over year.

Growth investments are accelerating: Costco plans to open 33 warehouses in fiscal 2027, targeting 30 net new locations annually, and expects capital expenditures of approximately $7.5 billion. The company also expanded delivery partnerships and reported digitally enabled sales growth of more than 20% for the year.

Membership and pricing momentum remained healthy: Paid executive members grew 9.4% to 42.3 million, total paid members reached 84.1 million, and renewal rates improved. Costco is reinvesting most tariff refunds into lower prices across key categories to reinforce member value.

Costco Wholesale NASDAQ: COST reported fourth-quarter fiscal 2026 net income of $2.998 billion, or $6.75 per diluted share, as sales rose 11.2% and the warehouse club continued to invest in pricing, new locations, digital capabilities and membership growth.

The results for the 16 weeks ended Aug. 30 included a nonrecurring benefit of $0.15 per diluted share from refunds of tariffs imposed under the International Emergency Economic Powers Act, net of partial reinvestment in lower prices for members. Excluding that benefit, net income increased 12.3% from the prior year and diluted earnings per share rose 12.4%, Chief Financial Officer Gary Millerchip said.

Fourth-quarter net sales totaled $93.87 billion, compared with $84.43 billion a year earlier. Comparable sales rose 9.4%, or 6.7% after adjusting for gasoline-price inflation and foreign exchange. Digitally enabled comparable sales increased 19.5%, while traffic, or shopping frequency, rose 3.3% worldwide.

Tariff Refunds Support Price Investments Costco received $184 million in tariff refunds during the quarter, including $174 million in refunds and $10 million in interest. Millerchip said the amount represented a little more than one-third of the total refunds the company expects to receive.

The company has already received a similar amount in the first quarter of fiscal 2027 and intends to reinvest the majority of future refunds in member value. Chief Executive Officer Ron Vachris said Costco used some fourth-quarter refunds to reduce prices in the latter half of the period on produce, meat, beverages, home furnishings and hardware, among other categories.

“Our goal is to be the first to lower prices where we see opportunities to do so,” Millerchip said, citing reductions on Kirkland Signature walnuts, Colombian whole bean coffee, dry facial towels and coarse black pepper.

Responding to an analyst question about the sales impact of those investments, Millerchip said Costco continued to see resilient member spending and comparable sales excluding gas and foreign exchange in the 6% to 7% range. He said the company views the price reductions as returning tariff-related value to members, while adding that non-food sales and travel growth showed members were responding to the company’s assortment and value proposition.

Expansion Targets 30 Net New Warehouses Annually Costco opened 12 warehouses in the fourth quarter, including 10 new U.S. locations, a relocation in Taiwan and its 43rd warehouse in Mexico. For the full fiscal year, the company opened 28 warehouses, including three relocations, resulting in 25 net new buildings and bringing its global warehouse co...