Costco (COST.US) Q4 revenue and profit surpass expectations, paid membership growth falls short of forecasts

According to Jinse Finance APP, after the U.S. stock market closed on Thursday, Costco (COST.US) announced its financial results for the fourth quarter of fiscal year 2026 ending August 30. The data shows that Costco's Q4 total revenue increased 11% year-over-year to $95.72 billion, exceeding market expectations; adjusted earnings per share came in at $6.57, also above market forecasts, with tariff refunds contributing $0.15 per share.

The data also shows that during the fourth quarter, membership fee income rose 7% to $1.85 billion, slightly above market expectations. The increase in the number of paid members for the same period was below expectations. The company's share price showed little change in after-hours trading.

This large-scale warehouse retailer, which operates more than 900 stores globally, gains an advantage with its competitive pricing, bulk-packaged goods, and products that are hard to find elsewhere. Its limited selection model—focusing on just a few choices in each category—allows it to respond flexibly and efficiently to tariffs and other macroeconomic challenges.

Executives stated in a Thursday call with analysts that Costco’s gasoline and travel businesses performed well, while household items, small electronics, and beauty products also drove sales growth. Adjusted same-store sales for the quarter grew by 6.7%, surpassing expectations.

Executives noted that the company received $184 million in tariff refunds last quarter, and a similar amount in the current quarter. The company primarily used these refunds to lower prices for items such as meat, produce, beverages, and household goods.

Chief Financial Officer Gary Millerchip stated that in recent months, food inflation remained at a similar level. Some non-food product prices have risen due to higher storage chip costs and increased oil prices caused by the Middle East conflict.

The company said that young consumers continue to join Costco, with the number of members under 40 growing by nearly 60% since the pandemic. This group now accounts for more than 25% of Costco shoppers. CEO Ron Vachris noted that while they initially spend less, growth accelerates over time.

In recent years, Costco has sought to expand its digital operations by partnering with third-party delivery companies such as Instacart, DoorDash, and Uber Technologies. The company’s e-commerce segment is growing faster than others, helping to attract younger shoppers. On a comparable basis, digital sales grew by nearly 20%.

In recent months, consumer confidence has remained weak due to high oil prices and inflation. This has triggered intensified competition, as companies try to attract price-sensitive shoppers with the right product mix. Walmart, Kroger, and Albertsons are using tariff refunds to fund price reduction initiatives.