Costco Wholesale (COST) Q4 2026 earnings review
Costco's members spend more, even as member growth slows
Costco, the membership warehouse club, sold more to the members it already has while adding new ones more slowly. Stripping out gas prices and currency, same-store sales rose about 7%, steady with the past year. Pricier gas lifted reported sales 11%, and a one-off tariff refund flattered profit.
| Same-store sales, excluding gas prices and currency | +6.7% +6.4% a year ago |
|---|---|
| Profit per share, excluding the tariff refund | $6.60 +12.4% from a year ago |
| Paid memberships | 84.1 million +3.8%, down from +6.3% a year ago |
| Warehouses planned for fiscal 2027 | 967 28 net new, after 25 this year |
⚖️ Verdict: 🟢 Bullish
The story got better because existing members renewed more often and spent more, led by the U.S. Renewal rates are back to last year's level, and higher-fee Executive members now make up half the base. The bad news: member growth slowed again, and store openings still run behind plan.
The question now is whether spending by existing members can keep outrunning slower member growth. If upgrades and new stores keep baskets growing, the slowdown matters little; if not, sales growth drifts toward the member rate. The first-quarter member count, and whether the 28 planned openings arrive on time, will tell.
🐂 Bull Case
U.S. Stores Keep Speeding Up
Costco's home market is gaining speed, and it did so against a tougher comparison. U.S. same-store sales, excluding gas prices, grew faster for a third straight quarter. More visits did nearly as much of the work as bigger baskets.
- U.S. same-store sales excluding gas: up 7.2%, from 6.0% a year ago
- U.S. shopper visits: up 3.2%
- U.S. average basket excluding gas: up 3.9%
Longer opening hours began adding about 1% to weekly U.S. sales at the end of June 2025. By our math, this quarter compared against that boost for about nine of its sixteen weeks, and growth still rose.
What to watch: U.S. same-store sales excluding gas in the first quarter of fiscal 2027, the first with the hours boost fully in the base. Holding near 7% would show members are driving the gains; a slide toward 6% would say the extra hours did more of the lifting.
Executive Members Are Now Half the Base
Costco's higher-fee Executive tier keeps growing more than twice as fast as membership overall. They pay a larger fee and do most of the buying.
- Executive members: 42.3 million, up 9.3% by our math
- Share of paid members: 50.3%, from 47.8% a year ago
- Share of sales: 75.6%
- Membership fee income excluding currency: up 7.7%, about twice member growth
What to watch: first-quarter fee income, with the September 2024 fee increase fully out of the base. Growth near 7% would show upgrades carry the line; a slide toward the member rate would mean fewer members left to upgrade.
Renewals Have Stopped Slipping
The renewal-rate worry that ran through last year has eased over two quarters. The U.S. and Canada rate rose to 92.3%, back to its level a year ago, after bottoming at 92.1%. The worldwide rate is back to 89.8%.
Management had warned of further slight declines as online sign-ups, who renew less often, grew as a share of members. Two straight gains say its retention work is holding.
What to watch: the first-quarter renewal rates. Another reading at or above 92.3% would close the issue; a drop back to 92.1% would say the recovery was timing.
Positives this quarter didn't test
Several drivers got no new numbers this quarter. Each has a figure that would move it.
- AI search: triple-digit traffic growth last quarter; a sales figure would size it.
- Pharmacy: top online growth category; a growth rate would size it.
- Gas loyalty: record fuel volumes last quarter; spending by fuel buyers would test it.
- New stores: last year's class hit $192 million in first-year sales; this year's figure will show.
- Kirkland price cuts: walnuts, coffee and pepper; unit volumes would show the payoff.
- Retail media: the Google and YouTube deal has no revenue figure yet.
🐻 Bear Case
Member Growth Fell Below Management's Normal Range
Member growth has now fallen below the range management calls normal. Last quarter it described 4–5% as normal without big new-market openings. Growth then slowed for a fourth straight quarter.
- Paid memberships: 84.1 million, up 3.8%
- Members added in fiscal 2026: about 3.1 million, against about 4.8 million the year before, by our math
- Net new warehouses in fiscal 2026: 25, against 30 in the plan a year ago
Openings are the link. Management ties the biggest sign-up waves to new markets, and openings ran short all year. The new plan of 28 is better, but still below the 30-plus a year management targets.
What to watch: first-quarter member growth. A return toward 4% as openings pick up would support management; another step down would say the base is maturing faster than stores can refresh it.
Canada Has Slowed Three Quarters Running
Canada, Costco's second-largest country by store count, has lost about half its growth rate since the first quarter.
- Same-store sales excluding gas and currency: up 4.6%, from 9.0% in the first quarter
- Shopper visits: up 2.5%, from 5.3% a year ago
- Warehouses opened: five this year, five more planned for fiscal 2027
The materials give no cause. New warehouses pulling sales from nearby stores is one possibility.
What to watch: Canada's first-quarter growth. A floor near 5% would point to new-store overlap; a further slide, to weaker Canadian shoppers.
Without the Refund, Margins Barely Moved
Excluding the one-off tariff refund, the operating margin was about level with a year ago, by our math.
- Store and overhead costs, share of sales: down 0.27 percentage points, but only 0.02 excluding gas
- Inflation-linked inventory charge (LIFO): a 0.11-point drag on gross margin
- Core merchandise margin, excluding the refund: up 0.18 points
Merchandise margins recovered from last quarter's dip. Store wages and overhead barely improved, though management says mid-single-digit growth should shrink them.
What to watch: first-quarter store costs excluding gas. A clear drop would show productivity outrunning wages and healthcare; another near-zero reading makes this the pattern.
Risks this quarter didn't answer
Four concerns from earlier in the year got no new numbers in the release or supplement. Each has a disclosure that would settle it.
- Healthcare costs: the main drag on store costs all year; this quarter's size is not given.
- Delivery partners: Costco widened third-party same-day delivery but gives no cost figure, while rivals build their own fleets.
- Non-food inflation: management flagged pricier plastics and fabrics; category inflation rates are not given.
- Tariff refunds: how much is still owed, and how much goes back into prices, is not disclosed.
👓 Other Themes
Gas and a Tariff Refund Bent the Headlines
Higher gas prices pushed reported same-store sales to 9.4%, against 6.7% without gas and currency. Fuel sells at a thin markup, so it shrinks margin percentages even when fuel profit holds up. Separately, refunds of tariffs paid under an emergency trade law added $0.15 to profit per share, after Costco passed part of them back through lower prices.
💲 Other KPIs
Cash generation grew faster than profit. Operating cash flow minus capital spending rose 19.8% for the year, after 18.2% in fiscal 2025. Capital spending grew 17.0% at the same time. The fourth quarter alone produced $2.49 billion by our math, 30.7% more than a year ago. Supplier payables rising faster than inventory helped.
The cash pile grew by $6.0 billion in the year. Net of $6.2 billion of debt, that leaves $15.1 billion by our math. A year earlier, net cash was $9.5 billion. Buybacks of $848 million only held the share count about level, and $2.25 billion of debt now falls due within a year.
Inventory grew slower than sales, a sign of tight stock control. It rose 6.7%, against full-year net sales growth of 10.1%. Per warehouse, stock rose 3.8% by our math. Suppliers fund more of it: accounts payable equal 117% of inventory, up from 109%.
Sales that begin online grew a little slower for a second quarter. Excluding currency they rose 19.8%, from 20.8% last quarter. Website and app traffic growth cooled to 30%. The measure covers the website, app, travel and delivery partners, and it still runs about three times the company's pace.
🔮 Guidance
New. The plan adds 28 net warehouses in fiscal 2027, up from 25 this year. Most are in the U.S., with five each for Canada and other countries. That still falls short of management's goal of 30 or more a year. The fiscal 2026 plan was trimmed from 944 to 940, and the year still ended one warehouse short.
❓ Key Questions
Is a special dividend coming?
Net cash reached $15.1 billion, and management has called a special dividend the most effective way to return excess cash. Nothing was announced with these results.
Why has Canada slowed three quarters running?
Growth there has roughly halved since the first quarter. Is it new stores pulling sales from older ones, or weaker Canadian shoppers? Five more Canadian warehouses are planned, so the answer matters.
What pushed receivables up 24% in a year?
Receivables rose 23.6%, more than twice the pace of sales. If unpaid tariff refunds sit in that figure, how much is still coming, and how much will go back into prices?
What member growth does the 28-store plan support?
Management called 4–5% member growth normal, and this quarter came in below it. How many sign-ups should next year's openings, especially in new markets, add?
When will store costs fall as a share of sales?
Excluding gas, store and overhead costs barely improved despite steady sales growth. A figure for healthcare cost growth would show whether the pressure is easing.