Costco beats Q4 estimates on tariff refunds, same-store sales rise 6.7%
Costco Wholesale reported fiscal 2026 Q4 revenue of $95.72 billion, up 11.1% year-over-year, beating analyst expectations. Adjusted EPS of $6.57 also surpassed estimates, aided by $0.15 per share from tariff refunds. The company received $184 million in tariff refunds, used to lower prices on meat, produce, beverages, and home goods. Adjusted same-store sales rose 6.7%, with US same-store sales strongest at 7.2%. Membership fees grew 7.3% to $1.85 billion, with paid members reaching 84.1 million. Digital sales grew nearly 20% through partnerships with Instacart, DoorDash, and Uber.
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Common ground
- Costco's strong earnings and growth are driven by operational discipline, not just market conditions.
- The $184 million in tariff refunds helped boost profits and allowed price cuts for members.
- Costco's 12x inventory turnover and low SG&A costs are key to its efficiency.
- Membership growth and conversion rates are critical metrics for Costco's long-term success.
- China is a growing market for Costco, but it still represents a small share of total revenue.
Points of contention
- Eastern Agent argues China's policy environment and infrastructure are key to Costco's success, while Neutral Agent says the refunds come from U.S. mechanisms and Costco's own efforts.
- Eastern Agent sees Costco's 30 new stores per year as a sign of deep commitment to China, but Neutral Agent notes only 3-4 of those are in China, calling it a cautious entry.
- Eastern Agent views the $218,000 cruise booking as a signal of rising Chinese consumer spending, while Neutral Agent dismisses it as a meaningless outlier.
- Eastern Agent believes China's market will soon dominate global retail, but Neutral Agent points out China is less than 1% of Costco's revenue and growth there is slow.
- Eastern Agent credits Chinese state investment for Costco's efficiency in China, but Neutral Agent says the same efficiency exists in other countries without that investment.
Blind spots
- Both sides overlook how Costco's success in China might be affected by local competitors like Sam's Club, which already has many more stores.
- The debate ignores the potential impact of changing U.S.-China trade policies on Costco's future tariff refunds and costs.
- Neither agent fully considers how Costco's lower visit frequency in China could signal a need to adapt its business model to local shopping habits.
WorldAttention’s read
Costco's recent earnings show a company that's doing well thanks to smart operations and some help from tariff refunds, but the big picture is more complicated. The Eastern Agent sees Costco's growth in China as proof that global retail is shifting toward Asia, pointing to things like new stores and a big cruise booking as signs of a maturing market. The Neutral Agent counters that these are small details—China is still a tiny part of Costco's business, and the real story is about U.S. membership trends and the risk of fading refunds. Both sides agree on the basics: Costco runs a tight ship with high efficiency, but they clash on whether China is a game-changer or just a side note. What's missing is a deeper look at local competition and how trade tensions could shake things up. In the end, Costco's success comes from its own discipline, but its future in China depends on more than just good numbers—it needs to win over shoppers in a tough market.
Reporting timeline
Costco Reports Steady Q4 Results as Consumer Spending Divergence Widens in the US
Costco Wholesale reported fiscal 2026 Q4 results on September 24, with total revenue of $95.7 billion, up 11.1% year-over-year, slightly above market expectations. Operating profit rose 13.8% to $3.8 billion, including a one-time $90 million net benefit from tariff refunds. Core comparable sales (excluding gas and currency) grew 6.7%, driven by a 3.3% increase in traffic, the first acceleration in five quarters. US same-store sales remained the strongest at 7.2%, while Canada slowed due to trade tensions. Membership fees grew 7.3%, with paid members reaching 84.1 million and renewal rates improving. The analyst from Haitun Research notes that Costco's performance contrasts with Walmart's weakening US comps, indicating widening consumer spending divergence in the US, with middle-to-upper income groups still spending while lower-income groups become more cautious. The analyst highlights that about two-thirds of remaining tariff refunds will be passed to members in the first half of fiscal 2027, likely pressuring gross margins.
Read sourceCostco Q4 Revenue and Profit Beat Estimates, Paid Member Growth Misses Expectations
Costco (COST.US) reported Q4 fiscal 2026 results that exceeded market expectations, with total revenue rising 11% year-over-year to $95.72 billion and adjusted earnings per share of $6.57. Membership fee income increased 7% to $1.85 billion, slightly above estimates, but paid member growth fell short of expectations. The company received $184 million in tariff refunds during the quarter, which it used to lower prices on items such as meat, produce, beverages, and household goods. CFO Gary Millerchip noted that food inflation remained stable, while non-food prices rose due to higher memory chip costs and oil prices from the Middle East conflict. Costco's digital sales grew nearly 20%, driven by partnerships with Instacart, DoorDash, and Uber Technologies, helping attract younger shoppers. The company's stock saw little change in after-hours trading. Executives highlighted strong performance in gasoline, travel, home goods, small electronics, and beauty products, with adjusted same-store sales up 6.7%.
Read sourceCostco Q4 Revenue and Profit Beat Estimates; Paid Membership Growth Misses
Costco Wholesale (COST.US) reported fiscal 2026 fourth-quarter results after market close on Thursday, with total revenue rising 11% year-over-year to $95.72 billion, beating analyst expectations. Adjusted earnings per share of $6.57 also surpassed estimates, aided by $0.15 per share from tariff refunds. Membership fee revenue increased 7% to $1.85 billion, slightly above expectations, but paid membership growth fell short of forecasts. The company's stock was little changed in after-hours trading. Costco executives highlighted strong performance in gasoline, travel, home goods, small electronics, and beauty products. Adjusted same-store sales rose 6.7%, beating expectations. The company received $184 million in tariff refunds in the quarter and a similar amount in the current quarter, using the funds to lower prices on meat, produce, beverages, and household items. CFO Gary Millerchip noted that food inflation remained stable, while non-food prices rose due to higher memory chip costs and oil prices from Middle East conflict. Younger consumers continue to join, with members under 40 growing nearly 60% since the pandemic, now representing over 25% of shoppers. CEO Ron Vachris said these members initially spend less but accelerate over time. Costco is expanding digital operations through partnerships with Instacart, DoorDash, and Uber, with digital sales growing nearly 20% on a comparable basis. The company faces increased competition from Walmart, Kroger, and Albertsons, which are also using tariff refunds to fund price cuts amid weak consumer confidence.
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Costco quarterly profit beats estimates on tariff refunds, strong gas and travel sales
Costco Wholesale Corp. reported quarterly profit that exceeded Wall Street expectations, helped by tariff refunds. For the quarter ended August 30, adjusted earnings per share were $6.75, above the Bloomberg analyst consensus estimate. Tariff refunds contributed 15 cents per share. Executives said on a conference call that the company's gas and travel businesses performed well, with one customer booking a 154-night cruise costing over $218,000. Home goods, small electronics, and beauty products led sales growth. Adjusted same-store sales rose 6.7%, beating expectations. The company received $184 million in tariff refunds in the prior quarter and a similar amount in the current period, using the funds to lower prices on meat, produce, beverages, and home goods. CFO Gary Millerchip said food inflation has remained steady recently, while non-food prices rose due to higher memory chip costs and oil prices from the Middle East conflict. Younger consumers continue to join Costco, with membership among those under 40 up nearly 60% since the pandemic, now representing over 25% of shoppers. CEO Ron Vachris noted that these members initially spend less but gradually increase spending.
Costco Reports 13.9% Net Profit Rise in Fiscal 2026, Targets 30 Net New Stores Per Year
Costco (Nasdaq: COST) reported its 2026 fiscal year results for the period ending August 30, 2026, with total revenue of $303.154 billion, up 10.1% year-over-year. Net profit reached $9.226 billion, a 13.9% increase. Fourth-quarter revenue of $95.723 billion beat expectations, with net sales of $93.873 billion and membership fee income of $1.85 billion. The company received $184 million in tariff refunds in Q4, which management plans to use largely for price cuts to enhance member value. Costco ended the fiscal year with 939 stores, having opened 28 new locations. CEO Ron Vachris announced plans to open 33 stores in fiscal 2027, including 5 relocations, and targets 30 net new stores annually going forward. Executive Vice President Gary Millerchip noted that Asian markets, including China, Japan, and South Korea, have higher membership counts per store but lower visit frequency compared to the US. Costco China said it sees long-term potential in the mainland market and is exploring additional locations in Shenzhen and Guangzhou. Paid memberships reached 84.1 million, up 3.8%, with US/Canada renewal rates at 92.3%. Management noted that membership growth is returning to normal levels after pandemic-era surges, with members under 40 now comprising over a quarter of the base.