Costco Q4 2026 Earnings Analysis

More earnings analysis: https://betafinch.com Groups: RETAIL (https://betafinch.com/groups/RETAIL) ────────── WELCOME TO BETA FINCH, YOUR AI-POWERED EARNINGS BREAKDOWN ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, where we take the numbers straight from the source and translate them into something you can actually use. I'm Alex. JORDAN: And I'm Jordan. Today we're digging into Costco's fiscal fourth quarter and full-year 2026 results. ALEX: And before we get going, our standard reminder — this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions. JORDAN: Okay, let's get into it, because there's a lot here. Costco just closed out fiscal 2026 with over 10% top-line sales growth for the year, and Q4 net sales came in at $93.87 billion — up 11.2% year over year. ALEX: And comparable sales were up 9.4% overall, 6.7% once you strip out gas price inflation and foreign exchange. That's actually been a pretty steady band for them — Gary Millerchip, the CFO, mentioned that 6-7% range has held for basically a full year now. JORDAN: Right, and net income was $2.998 billion, or $6.75 a share. But here's a wrinkle — that includes a one-time $0.15 per share benefit from IEEPA tariff refunds. Strip that out, and net income and EPS were still up a healthy 12.3% and 12.4% respectively. ALEX: The tariff refund story is worth pausing on. Costco got $184 million back in Q4 — that's about a third of what they expect total — and instead of just banking it, they plowed a chunk of it back into member value. Price cuts on everyday stuff: produce, meat, beverages, even home furnishings and hardware. JORDAN: Which is very on-brand for Costco. CEO Ron Vachris basically said it outright — when they see lower prices, they see an opportunity. And it's not just talk; they're planning to keep reinvesting the majority of future tariff refunds the same way into fiscal 2027. ALEX: Let's talk membership, because that's always the metric everyone obsesses over. Executive members hit an all-time high — 42.3 million, up 9.4% year over year. Total paid membership was 84.1 million, up 3.8%. JORDAN: But an analyst on the call — Scot Ciccarelli from Truist — pushed on this pretty hard. Membership growth has been slowing for eight straight quarters. Gary's answer was essentially: this is more of a normalization than a red flag. New sign-ups are still growing, renewal rates ticked up to 92.3% in the U.S. and Canada, and the real story is quality over raw headcount — more executive members, more gas engagement, more digital engagement, all of which correlate with higher spend and stickier loyalty. ALEX: The under-40 member cohort is a big part of that story too. It's grown nearly 60% since COVID and now makes up more than a quarter of Costco's total membership base. They spend less initially, but the expectation is they mature into higher-value members over time. JORDAN: Now, on the ancillary business side — gas, pharmacy, and travel were the real stars. Gas had a record year, with comps up in the mid-30s, and Costco says it saved members over $3.2 billion at the pump versus market average pricing. ALEX: Pharmacy grew nearly 20%, even absorbing headwinds from Medicare pricing changes on drugs, partly thanks to GLP-1 programs and their fertility program driving double-digit script growth. And travel — vacation packages, cruises, car rentals — all grew double digits. There was this incredible anecdote about a member booking a 154-night cruise for over $218,000 and getting an $8,800 shop card back. JORDAN: That's a wild flex for what's supposed to be a value retailer, but it kind of shows the range Costco's operating in right now — from Kirkland walnuts down four bucks a bag to six-figure cruise bookings. ALEX: Let's touch on digital, because there wa This episode includes AI-generated content.