Costco Wholesale reported fourth-quarter fiscal 2026 results that topped Wall Street expectations, driven by double-digit comparable-store sales growth and continued momentum in its digital and ancillary businesses.
Earnings per share came in at $6.75, exceeding consensus estimates of $6.55 by 3.1%. The result included a non-recurring benefit of $0.15 per diluted share from tariffs refunded under the International Emergency Economic Powers Act, raising total tariff-related income to $184 million in the quarter—slightly more than a third of all refunds expected for fiscal 2026. Excluding that benefit, the year-ago period saw EPS of $5.87.
Total net sales rose 11.2% to $93.87 billion from $84.43 billion a year earlier, though the figure missed the $94.85 billion consensus read. Comparable sales rose 9.4% on a reported basis and 6.7% excluding the effects of gas price inflation and foreign exchange. Digitally enabled comparable sales jumped 19.5% reported, or 19.8% adjusted for currency, with digitally enabled sales surpassing $33 billion overall.
Membership data reinforced the retailer's stickiness. Total paid memberships reached 84.1 million globally, up 3.8%, while paid executive memberships grew 9.4% to 42.3 million. The worldwide renewal rate climbed 10 basis points to 89.8%, and the U.S.-Canada renewal rate rose to 92.3%. Memberships among those under 40 have expanded nearly 60% since the pandemic and now account for more than a quarter of the base.
Gross margin rate fell 11 basis points to 11.02%, though it widened 20 basis points when excluding the impact of rising gas prices. Selling, general and administrative expenses as a rate declined to 8.94% from 9.21% a year earlier. Net income rose 12.3% excluding the tariff-refund benefit to $2.998 billion from $2.61 billion. Membership fee income increased 7.3% to $1.849 billion.
Traffic worldwide grew 3.3%, and average ticket rose 5.9%, or 3.3% adjusting for gas and currency effects. The company said its agile, item-driven pricing model continues to support market-share gains.
On ancillary businesses, U.S. member households purchasing fuel from Costco hit an all-time high, with savings to members exceeding $3.2 billion versus average pump prices. The pharmacy segment grew sales nearly 20% with double-digit prescription growth, and the company announced a new partnership with SCAN Health Systems for Medicare Advantage benefits. Over 750,000 members were booked on cruises, up 16%, according to management.
Digital fulfillment partnerships broadened during the quarter: Uber Eats expanded from 17 states to nationwide coverage, DoorDash added U.S. markets, and Instacart operations continued across the United States and Canada. Chief Financial Officer Gary Millerchip said sales originating from AI search activity—through platforms such as Gemini, Anthropic and OpenAI—grew at triple-digit rates.
Costco opened 12 warehouses in the quarter, bringing its global footprint to 939. For the full fiscal year, 28 stores were opened net of three relocations. Looking ahead, the company plans to open 33 warehouses in fiscal 2027, including five relocations, with a longer-term target of roughly 30 net new units annually over the next five to ten years. New U.S. markets cited include Buffalo, New York, and Lawrence, Kansas. Capital spending is expected to rise to about $7.5 billion in fiscal 2027 from $6.4 billion.
Shares closed down 0.91% at $896.48 in regular trading before adding 0.26% to $898.80 in after-hours activity. The stock's 52-week range stands between $844.06 and $1,096.50, and it trades at a P/E of 45.23 and a PEG ratio of 3.55.
CEO Ron Vachris said the results reflected a "deepening of member loyalty" and a larger share of wallet, while emphasizing Costco's commitment to being first to lower prices where opportunities arise. The company employs approximately 355,000 workers worldwide.
