Latest quarter

Costco reported Q4 FY2026 revenue of $95.7 billion, up 11.1% from $86.2 billion a year earlier. The company’s revenue, as the consensus counts it, was $95.7 billion versus consensus revenue of $94.8 billion, and its adjusted EPS, as the consensus counts it, was $6.60 versus $6.48; revenue and adjusted EPS were above the consensus.

Costco reported diluted EPS of $6.75, up 15.0% from $5.87 in Q4 FY2025. The company said the quarter’s EPS included a $0.15 per-share non-recurring benefit from tariff refunds, net of partial reinvestment in member value. Membership fee income was $1.8 billion in Q4 FY2026, according to Costco.

Costco reported gross margin of 12.7%, down 0.2 percentage points from a year earlier, while operating margin was 3.97%, up 0.1 percentage points. The company reported free cash flow of $2.5 billion, up 30.7% from $1.9 billion a year earlier. Costco did not provide quarterly financial guidance against which to assess the reported results.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Ron Vachris said Costco opened 12 warehouses in the fourth quarter and ended fiscal 2026 with 939 warehouses worldwide. He said the company plans 33 warehouse openings in fiscal 2027, including five relocations, and continues to target 30 net new warehouses annually. Vachris said new markets bring more member sign-ups, while infill locations have a quicker sales and profitability maturity curve.

On demand, Vachris said fiscal-year performance extended across warehouses, ancillary businesses and digital platforms. He said gasoline, pharmacy and travel grew faster than Costco’s overall growth rate, while digitally enabled sales exceeded $33 billion for the year. Millerchip said Q4 comparable sales rose 9.4%, or 6.7% after adjusting for gasoline-price inflation and foreign exchange, with worldwide shopping frequency up 3.3% and average ticket up 5.9%.

Millerchip said membership-fee income rose 7.3% to $1.849 billion in the quarter, with higher executive-member penetration and base-member growth contributing. He said Costco ended the quarter with 84.1 million paid members and 42.3 million paid executive members, while the U.S. and Canada renewal rate was 92.3% and the worldwide rate was 89.8%. When analysts asked about member growth, Millerchip said Costco does not give guidance for particular membership metrics, though he described recent growth as more typical given new-member sign-ups and normalization in renewal rates.

On pricing and margins, Vachris said the company used some tariff refunds for price reductions on everyday food and non-food items. Millerchip said the company received $184 million in fourth-quarter refunds and expects to reinvest most future refunds in member value. He said reported gross margin declined 11 basis points, while the rate excluding gasoline inflation increased 20 basis points; he also cited a $152 million LIFO charge, compared with $43 million a year earlier. In response to questions on product costs, Vachris said timing varies by commodity and that Costco works with suppliers to keep prices down.

Millerchip said capital expenditure was $6.4 billion in fiscal 2026 and Costco plans approximately $7.5 billion in fiscal 2027, primarily for warehouse openings and supply-chain spending. He said the company expects the rate of capital-expenditure growth to slow beyond fiscal 2027.

Guidance

Costco said it plans approximately $7.5 billion of capital expenditure in fiscal 2027. The company said its fiscal 2027 warehouse plan is 33 openings, including five relocations, as it builds toward 30 net new warehouses per year. Costco said it expects capital-expenditure growth to slow beyond fiscal 2027 after three years of outsized growth.