Costco (COST) Stock Falls Despite Earnings Win: What’s Behind the Muted Response?

Key Takeaways

• The warehouse retailer reported fiscal Q4 earnings of $6.75 per share, surpassing the analyst consensus of $6.54.
• Quarterly revenue jumped 11% compared to last year, reaching $95.7 billion and exceeding the $94.9 billion projection.
• Annual earnings increased 14% to $20.78 per share, while yearly revenue totaled $303.1 billion.
• Membership fee revenue has decelerated for three consecutive quarters, raising investor concerns.
• Shares dropped 1% on Thursday, closing at $896.48, and remain 18% off the 52-week peak.

Costco Wholesale delivered results that exceeded Wall Street forecasts for its fiscal fourth quarter, yet the market response was surprisingly tepid. Shares slipped 1% on Thursday, settling at $896.48, and showed minimal movement in subsequent trading.

Costco Wholesale Corporation, COST

The membership warehouse chain posted earnings of $6.75 per share for the period ending August 30. This figure surpassed the $6.54 consensus estimate compiled by FactSet analysts.

Quarterly revenue climbed 11% from the prior year to $95.72 billion, outpacing the anticipated $94.97 billion. Net sales, which constitute the majority of total revenue, expanded to $93.87 billion compared to $84.43 billion in the same quarter last year.

COSTCO $COST Q4’26 EARNINGS HIGHLIGHTS

Total Revenue: $95.7B (Est. $94.86B) ; +11% YoY
EPS: $6.75 (Est. $6.53) ; +15% YoY
Oper Income: $3.8B (Est. $3.74B) ; +14% YoY
Net Income: $3.0B (Est. $2.9B) ; +15% YoY

Other Q4 Metrics:
Quarter: 16-week Q4
Net… pic.twitter.com/eityBOW2Lo

— Wall St Engine (@wallstengine) September 24, 2026

Looking at the complete fiscal year, earnings advanced 14% to $20.78 per share. Total annual revenue grew 10% to $303.1 billion, likewise exceeding projections.

Comparable store sales increased 9.4% during the quarter. The United States delivered the strongest performance with 11% growth, while international markets posted 7% gains and Canada saw 5% increases.

Digital-enabled comparable sales surged nearly 20%. When excluding fluctuations from gasoline prices and foreign exchange rates, adjusted same-store sales rose 6.7% across the company.

Membership Revenue Deceleration

The company has now experienced slowing membership fee revenue growth for three consecutive quarters, a development that has drawn scrutiny from market analysts. UBS analyst Michael Lasser acknowledged “solid profitability management” while highlighting the deceleration as a primary concern for investors moving forward.

This represents a departure from the pricing leverage Costco has historically relied upon. The retailer has maintained its iconic $1.50 hot dog and soda combination unchanged, and implemented price reductions on multiple Kirkland Signature products in June.

Despite these pricing strategies, same-store sales growth has remained robust, climbing 8.8% in June, 8.9% in July, and 8.4% in August. The company attributed August’s modest softening to a calendar shift related to Labor Day.

Fuel Sales and Tariff Refunds Impact Results

CEO Ron Vachris highlighted gasoline sales as a standout performer. He noted that elevated prices stemming from conflict in Iran drove increased member traffic to Costco’s fuel stations, which achieved record annual performance.

“Our gas business has had a record year, driven by members seeking value in Costco’s top tier gasoline in the face of rising prices,” Vachris explained during Thursday’s investor call. He further noted that the percentage of U.S. member households purchasing fuel from Costco reached an unprecedented high in fiscal 2026.

Tariff refunds also influenced quarterly results. The company collected $184 million in refunds and channeled the majority of these proceeds into reduced prices across categories including produce, meat, beverages, and select home products.

CFO Gary Millerchip indicated that this refund accounts for slightly more than one-third of the total amount the company anticipates receiving in the current quarter. He emphasized that Costco intends to continue directing most of these funds toward competitive pricing.

“Our members continue to show resilience in their spending, and they show a willingness to spend in discretionary areas where they’re seeing exciting new items at great value,” Millerchip stated.

Year-to-date, Costco shares have appreciated 4%, though they trade 18% below the 52-week closing high of $1,094.32 reached in May. That previous peak preceded an earnings disappointment and membership growth concerns that unnerved investors.

During fiscal 2026, Costco launched 28 new warehouse locations, including three relocations. The company has outlined plans to open 33 additional sites in fiscal 2027, with five relocations included, maintaining its strategic objective of approximately 30 net new warehouses annually.