Costco Beats Q4 Estimates, But Tariff Refund and Membership Slowdown Leave Shares Flat

Costco Wholesale posted a clean beat on Wall Street’s revenue and profit estimates for its fiscal fourth quarter, yet the company's shares remained essentially flat in extended trading. Inflation-weary shoppers flocking to warehouse clubs for discount gas and bulk essentials drove the top-line beat, but investors focused instead on a non-recurring tariff refund that inflated reported earnings and a cooling trajectory in membership fee growth.

For the fiscal fourth quarter covering a 16-week period from May to August, Costco Wholesale announced after the U.S. Market close on September 24, U.S. Time, that total revenue reached $95.72 billion. According to Yoshi, a financial planner writing for Note, this figure topped the average LSEG analyst consensus estimate of $94.86 billion. Diluted earnings per share came in at $6.75, surpassing the $6.53 consensus forecast and climbing from the previous year's figure. Net income reached $3.0 billion.

Media additions

However, the headline beat came with a notable catch. As Asktraders reported, $0.15 of that per-share profit stemmed from a non-recurring benefit of tariff refunds received under the IEEPA programme, net of some reinvestment into member pricing. CFO Gary Millerchip noted during a post-earnings call, covered by KSL News, that the company received tariff refunds of $184 million during the quarter. CEO Ron Vachris explained that these refunds were reinvested through price reductions on essentials, meat, beverages, and select non-food items.

Stripping out the one-time tariff refund leaves adjusted earnings per share at $6.60, as highlighted by Ainvest. While this adjusted figure still topped consensus expectations, the margin was much narrower than the headline figures suggested, leading market participants to discount the quality of the beat.

Beneath the strong revenue performance, membership income—the subscription fee model that underpins Costco’s business—revealed a more cautious trend. AskTraders noted that membership income rose 7.3% year-on-year to approximately $1.85 billion, representing the third consecutive quarter of decelerating growth in that revenue line. Total paid membership reached 84.1 million, up 3.8% year-on-year but falling short of consensus expectations of around 85 million. This extended an eighth straight quarter of slowing paid-membership growth.

Despite the slowing subscriber growth rate, engagement metrics displayed resilience. The worldwide renewal rate ticked up to 89.8% from 89.7%, and the U.S. And Canada renewal rate rose to 92.3% from 92.2%. Paid executive members reached a record 42.3 million, up 9.4%, a factor that analysts expect will support renewal rates moving forward.

The broader retail environment played a significant role in driving customer traffic to the warehouse retailer. KSL News reported that persistent inflationary pressures drove consumers to Costco's discount gas stations and warehouses. CFRA analyst Arun Sundaram described it as another well-rounded quarter, noting that comparable sales growth continued to lead big-box peers, driven by balanced traffic and average ticket growth.

Gasoline emerged as a standout sales driver, with CEO Ron Vachris calling it a record year for the division. TD Cowen analyst Oliver Chen observed that Costco gas stations typically sell below market value, drawing in price-sensitive shoppers navigating economic pressures. Furthermore, shoppers consolidated trips by loading up on bulk groceries and essentials in single visits, increasing average basket sizes.

Digital channels also expanded rapidly. E-commerce sales jumped 19.5% during the quarter. Total company comparable sales rose 9.4% on a reported basis, or 6.7% when stripping out gasoline prices and foreign exchange.

Market reactions to the report reflected valuation concerns. As Ainvest detailed, Costco shares trade at approximately 45 times trailing earnings, a rich multiple compared to big-box peers. Because consistent compounding and high expectations are already priced into the stock, a quarter featuring a headline beat propped up by a one-time refund and a decelerating membership fee engine provided little catalyst for shares to advance further. Shares closed the regular session down 0.91% at $896.48 on Thursday, September 24, 2026, and drifted up less than a quarter of a percent in extended trading.

Amid the financial summaries, Costco management also used the earnings call to address popular culture and consumer requests. CEO Ron Vachris confirmed that the iconic food court churro is returning to all U.S. Locations for a limited time starting this month, ending months of social media speculation after the twisted cinnamon-sugar treat was discontinued in 2024, as reported by Yahoo Finance.

Looking ahead, Costco maintains its ongoing expansion strategy without providing formal numerical guidance for sales or profits. Management reported plans to open 30 net new stores per year, targeting 4 in Europe, 5 in Canada, and 1 in Mexico in fiscal 2027. Investors will monitor monthly sales reports released at the beginning of each month, leading up to the fiscal first-quarter earnings report expected in early December, which will provide further clarity on holiday shopping trends and membership trajectory.