Costco Q4 FY2026 Earnings: Comparable Sales and EPS Rise
Costco reported fiscal Q4 2026 net sales of $93.873 billion, up 11.2% year over year, with diluted EPS rising to $6.75, bolstered by a non-recurring $0.15-per-share tariff refund. Profit grew faster than revenue as disciplined SG&A expenses offset a slight contraction in merchandise spread. Total comparable sales rose 9.4%, led by strong U.S. and digital growth, while operating cash flow expanded significantly to $15.825 billion for the full fiscal year. Key risks include the non-recurring nature of the tariff benefit, sensitivity to external currency and fuel factors, and merchandise costs outpacing net-sales growth.
Costco (NASDAQ: COST) reported fiscal Q4 2026 net sales of $93.873 billion, up 11.2% year over year, while diluted EPS rose to $6.75 from $5.87. Net income increased 14.9% to $2.998 billion, supported by comparable-sales growth and a non-recurring $0.15-per-share benefit from IEEPA tariff refunds after partial reinvestment in member value.
Core Earnings Data
Profit grew faster than revenue in Costco’s 16-week quarter ended August 30, 2026. Merchandise costs increased 11.3%, slightly faster than net sales, but SG&A expense rose by a slower 7.9%, helping operating income advance 13.8% and operating margin improve modestly.
| Metric | Q4 FY2026 | Q4 FY2025 | YoY Change |
|---|---|---|---|
| Net sales | $93.873 billion | $84.432 billion | +11.2% |
| Membership fees | $1.850 billion | $1.724 billion | Approximately +7.3% |
| Total revenue | $95.723 billion | $86.156 billion | Approximately +11.1% |
| Operating income | $3.801 billion | $3.341 billion | Approximately +13.8% |
| Operating margin | Approximately 4.0% | Approximately 3.9% | Approximately +9 basis points |
| Net income | $2.998 billion | $2.610 billion | Approximately +14.9% |
| Diluted EPS | $6.75 | $5.87 | Approximately +15.0% |
The tariff-refund benefit was non-recurring and contributed $0.15 to diluted EPS after Costco reinvested part of the refunds in increased member value.
Business and Comparable-Sales Performance
Total comparable sales increased 9.4% on a reported basis and 6.7% after excluding gasoline-price and foreign-exchange effects. The 2.7-percentage-point gap shows that those external factors provided a net benefit to the reported companywide growth rate, while the digitally enabled channel remained Costco’s fastest-growing category.
| Q4 Comparable-Sales Category | Reported Growth | Adjusted Growth* |
|---|---|---|
| U.S. | 10.7% | 7.2% |
| Canada | 5.0% | 4.6% |
| Other International | 7.0% | 6.2% |
| Total company | 9.4% | 6.7% |
| Digitally enabled | 19.5% | 19.8% |
*Adjusted growth excludes changes in gasoline prices and foreign-exchange rates.
The U.S. remained the strongest geographic market on both reported and adjusted measures. Canada posted the slowest adjusted growth at 4.6%, while other international markets grew 6.2% after adjustment.
Profitability, Cash Flow, and Balance Sheet
Costco’s merchandise spread—net sales less merchandise costs—was $10.342 billion, compared with $9.395 billion a year earlier. As a percentage of net sales, that spread declined slightly to approximately 11.0% from 11.1%. Slower SG&A growth offset that pressure, allowing the operating margin calculated against total revenue to rise modestly.
The release provides cash-flow data for the full 52-week fiscal year rather than Q4 alone. Fiscal 2026 operating cash flow increased to $15.825 billion from $13.335 billion, while property and equipment additions rose to $6.435 billion from $5.498 billion. On that basis, operating cash flow less capital expenditures was approximately $9.390 billion, up from approximately $7.837 billion.
Year-end cash and cash equivalents reached $20.207 billion, compared with $14.161 billion a year earlier. Short-term investments totaled another $1.094 billion, while current and long-term debt totaled approximately $6.162 billion. Merchandise inventories rose 6.7% to $19.324 billion, below the fiscal year’s 10.1% net-sales growth rate.
Risks Investors Should Watch
- The tariff-refund benefit will not recur: The $0.15-per-share contribution increased reported Q4 EPS, so future comparisons will not have the same support.
- Reported comparable sales benefited from external factors: Adjusted total comparable-sales growth was 6.7%, below the reported 9.4%, leaving reported growth sensitive to gasoline prices and currency movements.
- Merchandise costs slightly outpaced net sales: Merchandise costs rose 11.3% against 11.2% net-sales growth, producing a small contraction in the merchandise spread as a percentage of sales.
Summary
Costco closed fiscal 2026 with double-digit Q4 net-sales growth, broad comparable-sales gains, and digitally enabled growth near 20%. Profit rose faster than revenue as slower SG&A growth offset modest merchandise-margin pressure, although EPS received a non-recurring tariff-refund benefit. The main items to monitor are adjusted comparable-sales growth, merchandise cost trends, and profitability after the one-time benefit rolls out of the comparison.
This article may include AI-generated content that is human-reviewed, which is for reference and general information purposes only and does not constitute investment advice.
Recommended Articles
Comments (0)
Click the $ button, enter the symbol, and select to link a stock, ETF, or other ticker.