Costco Wholesale released its fourth-quarter fiscal 2026 results on Thursday, exceeding Wall Street forecasts for revenue, earnings, and comparable sales. Revenue for the August quarter rose 11.1% year over year to $95.72 billion, ahead of LSEG projections of $94.86 billion.

Adjusted earnings per share (EPS) increased 15% to $6.75 during the 16-week period. This figure included a 15-cent benefit from tariff refunds, following a February Supreme Court decision that deemed President Donald Trump's emergency levies unconstitutional. Excluding this one-time benefit, net income growth would have been 12.3%, compared to 14.9% as reported.

Comparable sales rose 9.4% in the fiscal fourth quarter, surpassing FactSet expectations of 9%. The increase was driven by a 3.3% rise in traffic and a 5.9% increase in average ticket size. On an adjusted basis, which removes the effects of foreign exchange and gasoline prices, comparable sales grew 6.7%, with ticket size up 3.3% from the same period last year.

Digital comparable sales increased 19.5%, or 19.8% on an adjusted basis. Traffic to Costco’s e-commerce platform and app rose 30% compared to the prior-year period. Site visits originating from AI search grew by triple digits for the second straight quarter and demonstrated the highest conversion rate among all traffic sources. Searches for the Costco membership were among the top results generated by AI tools.

Membership fee income advanced 7.3% to $1.85 billion, slightly below FactSet estimates of $1.86 billion. Paid memberships reached 84.1 million, reflecting 3.8% growth year over year. This marked a slowdown from 4.1% in the third quarter, 4.8% in the second, and 5.2% in the first quarter of fiscal 2026. Executive tier memberships climbed to 42.3 million, a record high.

The global membership renewal rate rose to 89.8%, up from 89.7% in each of the previous three quarters. In the U.S. and Canada, the renewal rate increased to 92.3%, compared to 92.2% in the prior quarter. "Renewal rates showed improvements again this quarter, with the increasing executive penetration likely to help improve those rates in the future," CEO Ron Vachris said. "We continue to see significant opportunities for new warehouse growth," he said.

He noted demographic changes in the membership base. "Growth in new member signups through digital channels and younger members also continued. Looking over a longer time horizon, our member base under 40 has grown nearly 60% since Covid, increasing our total penetration of members under 40 to more than a quarter of our total base. While these younger members start out spending a little less with us, over time, they grow into higher spending members," he said.

Members under 40 now represent more than 25% of Costco’s total membership. Gross margin declined 11 basis points year over year to 11.02%. When adjusted for gas price inflation, gross margin improved by 20 basis points. Operating margins were higher compared to the same period last year.

CFO Gary Millerchip commented on artificial intelligence’s role in customer acquisition. "While starting from a low base relative to other channels, AI continues to grow in its influence on how our members are searching for products. Traffic to our site from AI search grew triple digits for the second consecutive quarter, and continues to show the highest conversion rate of all site traffic. Interestingly, the Costco membership is also among the top items originated from AI searches, indicating that there is a strong positive sentiment around the value of our membership coming from these sources," Millerchip said.

Vachris highlighted fuel savings for members. "In fiscal year 26, we saw the penetration of U.S. member households that purchased gas reach an all-time high. During the fiscal year, we estimate we saved our members over $3.2 billion versus the average price at the pump in markets where we operate," he said. U.S. member households buying gas achieved an all-time high penetration rate in fiscal year 2026.

Twelve new warehouses opened during the quarter, or 11 when excluding a relocation in Taiwan. For the full fiscal year 2026, the company opened 28 new warehouses, or 25 when excluding three relocations. Costco operates 939 locations globally.

We continue to see opportunities for new warehouse growth, Vachris said. The company plans to open 28 new warehouses in 2027 and relocate five. New market opportunities have been identified in Buffalo, New York, and Lawrence, Kansas.

Costco shares closed at $896.48 on Thursday. The stock was down 18% from its peak closing value on May 19. Shares rose less than 0.25% in extended trading that day.

Why It Matters

Costco’s results reflect sustained consumer spending amid broader economic uncertainty. The company surpassed revenue and earnings forecasts while expanding its membership base, signaling continued demand for its warehouse model. The rise in executive tier memberships to a record 42.3 million suggests members are increasingly valuing the premium offering, which could support future renewal rates.

The Supreme Court’s ruling on tariffs provided a clear financial benefit, illustrating how legal decisions can impact corporate earnings. The decision invalidated President Donald Trump’s emergency levies, enabling tariff refunds industry-wide, estimated at $168 billion across all importers. For Costco, this translated into a $0.15 per-share benefit.

The retailer’s emphasis on digital engagement, especially through AI search traffic, shows adaptation to evolving consumer habits. With AI-driven site visits growing by triple digits and achieving the highest conversion rate, Costco is using emerging technologies to maintain competitiveness.

What's New

Additional details emerged in later reporting on Costco’s financial performance and strategy. Gross margin declined by 11 basis points year over year to 11.02% in the fourth quarter of fiscal 2026, but rose by 20 basis points when adjusted for gas price inflation. As of the end of the fourth quarter, 84.1 million paid memberships were active, representing 3.8% year-over-year growth, with executive tier memberships reaching 42.3 million.

A February 2026 Supreme Court ruling that found President Donald Trump’s emergency levies unconstitutional allowed Costco to receive IEEPA tariff refunds, contributing a non-recurring $0.15 per diluted share benefit to fourth-quarter earnings. This benefit reduced the company’s net income growth from 14.9% to 12.3% when excluded. Costco plans to open 28 new warehouses in 2027 and relocate five, continuing its expansion after opening 28 new locations in fiscal 2026, or 25 excluding relocations.

How Sources Differ

Different sources provided varying levels of detail on Costco’s financial results. One reported that gross margin fell 11 basis points year over year to 11.02% in the fourth quarter of fiscal 2026, but increased by 20 basis points when adjusted for gas price inflation. Another source noted the IEEPA tariff refunds contributed a $0.15 per-share non-recurring benefit to fourth-quarter earnings, reducing net income growth from 14.9% to 12.3% when excluded.

There was also a discrepancy in detail depth. One source included specifics on gross margin and gas price adjustments. Another simply stated that Costco Wholesale reported fourth-quarter fiscal 2026 results on Thursday, without including those margin figures in the initial report.