Costco beat expectations and is putting tariff refunds and its own savings into lower member prices, while resin, chips, and oil get more expensive. Your item has to earn its spot at a lower price.
Net sales were $93.87B, up 11.2%. Without the one-time tariff refund gain, EPS grew 12.4%. On the September 24 call, Gary said adjusted comp has held in the 6 to 7% range for about a year. Costco does not give guidance. Shares closed down 0.9% that day and edged up after hours.
Costco has now received roughly two thirds of the tariff refunds it expects, and most of that money is going into lower member prices. Kirkland is cutting too. Know where your item sits against Kirkland and its neighbors before one of them drops.
jump to read →Costco spelled out which costs are rising and which are falling. A request tied to a rising cost, with the numbers and your own offsets, is the one that gets heard. If your inputs are on the falling list, expect the buyer to ask for a lower cost. Volume can help build either case.
jump to read →AI search traffic grew triple digits again and converts better than any other source. Costco is rewriting product data so AI reads it right, which makes accurate names, specs, pack sizes, ingredients, certifications, and photos matter more than ever.
jump to read →Uber Eats and DoorDash now cover the US, and Costco has discontinued Costco Next. App shoppers judge your item by its photo, name, and pack size, and brands that sold on Costco Next should confirm where their items land.
jump to read →Protein and fiber staples like sardines, tuna, meat snacks, and edamame grew strongly, and so did premium finds like K-beauty and saunas. The strongest pitch leads with whichever story your item truly fits.
jump to read →Costco plans 33 openings in FY27, 28 of them net new: about 18 in the US, 5 in Canada, and 5 abroad. Volume can map which openings fall in your regions.
jump to read →Costco turns every saving into a lower price, and Kirkland is how it holds the line when vendors ask for more.
Costco received $184M in tariff refunds in Q4 ($174M plus $10M interest), a little over a third of what it expects. A similar amount has already arrived in Q1 FY27. Costco put most of it into lower prices on produce, meat, beverages, home furnishings, and hardware, including non-food lines hit hardest by the original tariffs. One analyst put that at about $100M. Ron said unit growth on those items has been "fantastic." The refunds go to Costco, not to brands, and Costco will report the net effect every quarter. The one-time gain added $0.15 to earnings per share.
| Kirkland price cuts | Was | Now | Drop |
|---|---|---|---|
| Walnuts | $13.79 | $9.99 | −28% |
| Colombian Whole Bean Coffee | $21.99 | $19.99 | −9% |
| Coarse Black Pepper | $6.99 | $5.99 | −14% |
| Dry Facial Towel | $19.99 | $18.99 | −5% |
New Kirkland items: Japanese Matcha Green Tea Powder (12 oz), 1 oz Silver Bars, Pretzel Sandwiches, and Ultra-Filtered Lactose-Free 2% Milk. Costco says Kirkland saves members at least 15 to 20% against the national brand.
We continue to see some great Kirkland items that we're introducing out in the marketplace that are really very good tools for us to continue to fight back on lower pricing.
Ron Vachris · CEO
Overall inflation is steady in the low single digits. Costco sees vendor price changes 30 to 90+ days out, sooner for freight- and resin-driven items. Gary's goal: "the first to lower prices where we see opportunities." Typhoons in Asia and Panama Canal delays caused minor shipping disruptions, but inventory is in good shape.
More members now meet your item as data: an AI answer or a delivery-app tile. That listing is your packaging.
AI search traffic, from Gemini, Anthropic, and OpenAI, converts better than any other source. It is led by appliances and electronics, and the membership itself is a top find. Costco buys no paid digital ads, so it relies on accurate data to show up. Personalization in email and online product placement now touches 10% of Costco.com orders, and sales from it grew triple digits. The top online growth categories were pharmacy, home furnishings, small electrics, hardware, housewares, domestics, and health and beauty.
Delivery: Uber Eats grows from 17 states to all of the US, DoorDash expands across the US, and Instacart continues in the US and Canada. All three average under an hour. Their users skew younger, and the sales are mostly extra trips. Furniture and appliance delivery fell from 4 to 5 weeks to 3 to 4 days, and most same-day orders arrive within 45 minutes.
Costco discontinued Costco Next. Its most popular items and brands move into the main app and site. Costco says the change is not material.
There's a lot of work going on in the teams right now to work with those large language models to identify how we can continue to clean up and update our data and our product pages so that our value continues to show up transparently in that environment.
Gary Millerchip · CFO
Members are careful on staples and still splurge when the value is clear. Both moods are selling.
Ron feels "very good about the buying lineup" for the holidays. And the Food Court churro returns to all US locations for a limited time starting in September.
Executive members drive three quarters of sales, and gas, prescriptions, and travel keep all members coming back.
Members under 40 have grown nearly 60% since COVID and are now over a quarter of the base. They spend less at first and grow into higher spenders, peaking around ages 40 to 55. Membership growth is leveling off, which Gary called "probably more typical," and a year with big Asia openings could lift it. Fee income rose 7.3%, or 7.7% excluding currency and 6.8% excluding currency and the fee increase, and this was the last quarter lifted by the 2024 fee increase.
Reasons to visit: gas saved members $3.2B this year versus average pump prices, and a record share of US member households bought it. Costco expanded 26 of its busiest stations, and gas buyers visit more often. Pharmacy grew on GLP-1 and fertility programs and pay-ahead prescriptions, now over a third of scripts in many US locations. Script counts grew double digits, more than offsetting lower drug prices. A new SCAN Health partnership adds Medicare Advantage benefits. Travel sent 750K+ members on cruises, up 16%, including one 154-night, $218,000 trip whose traveler will earn an $8,800 shop card.
While these younger members start out spending a little less with us, over time, they grow into higher spending members.
Ron Vachris · CEO
Strip out gas and currency and sales grew 6.7%, the same 6 to 7% pace all year. Plan around that.
| Region | Comp | Ex gas, FX | Traffic | Ticket (ex) |
|---|---|---|---|---|
| United States | +10.7% | +7.2% | +3.2% | +7.3% (+3.9%) |
| Canada | +5.0% | +4.6% | +2.5% | +2.5% (+2.1%) |
| Other International | +7.0% | +6.2% | +4.5% | +2.4% (+1.7%) |
| Total | +9.4% | +6.7% | +3.3% | +5.9% (+3.3%) |
The quarter ran 16 weeks, ending August 30, 2026, and Ron Vachris and Gary Millerchip led the call. Costco grew sales over 10% for the year and gained market share. Higher gas prices added about 3 points to Q4 sales. Margin: core-on-core margin rose 18 bps excluding the tariff refunds and the price cuts they funded, driven by supply chain savings, better fresh labor productivity, and strong non-food sell-through. Fresh, non-foods, and food and sundries all improved. Healthcare and liability costs are still rising, and Costco is in year two of a three-year labor agreement.
| Warehouses | FY26 End | FY27 (est.) | Net New |
|---|---|---|---|
| United States | 647 | 665 | +18 |
| Canada | 115 | 120 | +5 |
| Other International | 177 | 182 | +5 |
| Total | 939 | 967 | +28 |
Q4 had 12 openings, 11 net: 10 in the US, including Mansfield, TX and Stone Mountain, GA, plus Mexico's 43rd and a relocation in Taiwan. FY27's 5 international net new are about 4 in Europe and 1 in Mexico, and new US markets include Buffalo, NY and Lawrence, KS. Asia and Australia follow in FY28. New markets bring more new members, while infill locations reach full sales faster. Capital spending growth should slow after FY27.
Ex gas, FX removes gas price swings and currency. Core-on-core is margin on core merchandise measured against core sales only. Measured against total sales, core margin was down 32 bps reported and 9 bps ex-gas, because gas, online, and pharmacy grew faster. LIFO is an inventory accounting charge, $152M in Q4 versus $43M a year ago, and a little over $200M for the year, about 1.5% inflation.
How Costco talks growth: low single = +1 to 3%, mid single = +4 to 6%, high single = +7 to 9%, low double = +10 to 13%, mid-teens = +14 to 16%, high 20s = +27 to 29%, mid 30s = +34 to 36%, triple digits = +100% or more.
