Costco's Big Day Has Arrived! Expect Management to Address a Controversial New Perk That Has Some of Its 79.6 Million Paying Members in an Uproar.

Key Points

• Costco Wholesale is set to lift the hood on its fiscal fourth-quarter operating results after the closing bell on Sept. 25.

• Beyond reported sales and earnings per share (EPS), investors should pay close attention to management's commentary on e-commerce growth and the impacts of inflation.

• Most importantly, expect management to justify its reasoning behind a new perk for its top tier of cardholders.

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For most investors, earnings season is the pinnacle of each quarter. This is the six-week period where most S&P 500 companies lift their proverbial hoods and give investors an up-close look at their operating performance. There's arguably no better way to gauge the health of American businesses and the stock market than from the operating results of its most-influential businesses.

But not every important business unveils its earnings results during this six-week time frame. Though only a few dozen companies are set to report their operating results this week, none will pack more of a punch than retail colossus Costco Wholesale (NASDAQ: COST), which is slated to announce its fiscal fourth quarter results after the closing bell today, Sept. 25.

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While most folks home in on the headline figures, such as quarterly revenue and earnings per share (EPS), there are far bigger questions and issues that need addressing from Costco's latest quarter and moving forward, including a controversial new perk that's left some of its 79.6 million paying members divided.

Image source: Costco Wholesale.

Costco prepares to lift the hood on its all-important fiscal fourth quarter

The good news for investors is that Costco tends to be relatively transparent with its operating results. It publishes monthly comparable-store sales data, which allows Wall Street analysts and investors to really narrow down what to expect in the latest quarter.

During the fiscal fourth quarter, ended Aug. 31, 2025, same-store sales excluding foreign currency movements and changes in gasoline prices rose 6.4% globally, with e-commerce sales continuing their theme of rising by a double-digit percentage (up 13.5%). Both figures are impressive when taking into account prevailing economic uncertainty at the moment.

E-commerce has turned into a particularly intriguing growth driver for Costco. App downloads have been on the rise, with high-value items (e.g., gold bars, TVs, and laptops) and personalized recommendations driving increased traffic. Expect Costco's management team to tout their efforts to expand digital sales logistics to meet this steady uptick in demand.

Something else investors would be wise to pay attention to is Costco's efforts to fight back against inflation.

Arguably the primary lure of Costco's warehouses is their value proposition. The company lures consumers with low prices on basic need goods, such as groceries and toiletries, which commonly undercut local shops and national grocery chains. Buying products in bulk helps to reduce Costco's per-unit cost and maintains its razor-thin margins on these popular/foot-traffic-driving products.

Management commentary on the inflationary impact of President Donald Trump's tariff and trade policy will be worth paying attention to. It's possible that even with inflationary pressures working against Costco on one end, inflationary concerns may be boosting foot traffic given the value proposition it offers its paying members.

But perhaps the elephant in the room for Costco's fiscal fourth-quarter conference call and fiscal 2026 guidance will be statements made about the implementation of its newest perk, which has some of its domestic paying members in an uproar.

Costco's newest perk is a necessary evil that'll boost its bottom line and enhance member loyalty

Changes are part of the member experience with Costco. Over the last year, the company increased annual fees for Gold Star and Business members by $5 to $65, with Executive cardholders seeing their annual fees rise by $10 to $130. The company has also cracked down on non-member purchases by requiring members to scan their card or a digital QR code before entering its warehouses.

Image source: Getty Images.

But the perk that's reverberated throughout the U.S. market is the Sept. 2 implementation of special shopping hours for Executive cardholders. Though Costco announced this first-of-its-kind change in June, it wasn't firmly put into effect until after the Labor Day holiday. Moving forward, Executive members have the store to themselves from 9 a.m. to 10 a.m. on weekdays and Sundays, and from 9 a.m. to 9:30 a.m. on Saturdays.

As you might imagine, this move has irritated many of its U.S. Gold Star and Business members. But keeping its Executive cardholders happy is paramount to Costco's success.

Based on the company's fiscal third-quarter data, 37.6 million of its 79.6 million global paying members were Executive cardholders. But these members totaled 73.1% of net sales. Executive cardholders tend to be highly loyal to the Costco ecosystem and are going to do whatever they can to get the most out of their $130 annual membership fee.

Even with Executive cardholders earning 2% back annually, up to $1,250, and receiving up to a $10 credit per month on qualifying online orders exceeding $150, these concessions are worth it for the company. Membership fees lead to a sizable chunk of Costco's profits, and they provide a healthy buffer when it comes to its razor-thin margins on groceries and other basic need items.

Despite ongoing criticism from some domestic cardholders, look for management to defend its decision to implement this special privilege for its Executive members and potentially provide guidance on how many Gold Star/Business cardholders it expects to upgrade to Executive status in the upcoming year.

Membership renewal rates for Executive cardholders will be especially important over the next year given heightened concerns about inflation and/or a U.S. recession, and the recent backlash Costco has faced over its new shopping-hours policy.

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.