Costco Wholesale Corporation

For the 16 weeks ended August 30, Costco reported net sales of $93.87 billion, up 11.2% from $84.43 billion a year ago. Net income was $2.998 billion, or $6.75 per diluted share. Excluding a nonrecurring $0.15 per-share benefit from IEEPA tariff refunds, net income and EPS were up 12.3% and 12.4%, respectively, versus $2.61 billion and $5.87 last year. Comparable sales rose 9.4%, or 6.7% adjusted for gas price inflation and FX; digitally enabled comparable sales rose 19.5%. Gross margin rate was 11.02%, down 11 basis points year over year, and SG&A was 8.94%, down 27 basis points. Membership fee income increased to $1.849 billion, up $125 million or 7.3%. For fiscal 2027, Costco plans approximately $7.5 billion in capex and about 33 warehouse openings, including 5 relocations.

Ron Vachris emphasized Costco’s broad-based operating strength, saying the business performed exceptionally well across warehouses, ancillary businesses, and digital platforms, with top-line growth above 10% and market share gains driven by member loyalty and value. He highlighted expansion plans, including new U.S., Europe, Canada, Mexico, and Asia/Australia opportunities, and said the company sees significant runway for warehouse growth. His tone was confident and upbeat, especially around member engagement, younger members, and the ability to reinvest tariff refunds into lower prices.

Gary Millerchip provided the main financial detail: Q4 net income of $2.998 billion, EPS of $6.75, and an $184 million tariff refund inflow in the quarter, of which $174 million was refunds and $10 million interest. He said gross margin was 11.02% versus 11.13% last year, with core-on-core margins up 18 bps excluding tariff refund effects, while SG&A improved to 8.94% versus 9.21%. He also noted interest income rose to $209 million from $169 million, capex was $2.21 billion in Q4 and $6.4 billion for the year, and fiscal 2027 capex is expected to be about $7.5 billion, driven by warehouse growth and supply chain investment.

Analysts pressed on whether tariff-refund-driven price cuts are boosting sales enough, and management said the underlying comp trend remains very strong at 6% to 7% excluding gas and FX, with nonfood sales and travel showing particularly strong response. Questions about slowing membership growth were answered with a focus on quality metrics: executive penetration, younger member growth, and renewal rates were all cited as positives even if headline growth is normalizing. Management also addressed inflation, saying it remains low-single digits but is hard to predict because of oil and tariff uncertainty, and said third-party delivery and AI-driven traffic are still early but increasingly incremental.