Sep 24, 2026 earnings call — Tariff refunds and membership-driven growth
Costco reported net sales of $93.87 billion for Q4, up 11.2% year-over-year.
Revenue $93.9B (est $95.0B) · EPS $6.75 (est $6.54)
Key quotes
"Our current plan is to open another 33 warehouses in fiscal year 2027, of which 5 are relocations as we build towards our goal of opening 30 net new warehouses per year."
"As shared in our earnings release, we received some initial tariff refunds in the fourth quarter, and we reinvested some of these dollars to give value back to our members."
"Traffic to our site from AI search grew triple digits for the second consecutive quarter and continues to show the highest conversion rate of all site traffic."
Analyst Q&A 14
price reinvestment and sales effect
Q (Michael Lasser · UBS): Why did you reinvest about $100 million into price and has it moved monthly sales? Should we expect a return to historic same-store sales growth?
A: They said members remain resilient and are spending on discretionary items where they see value. They view the price reinvestments as giving tariff refunds back to members and focused them on everyday and some nonfood items. Sales excluding gas were in the 6% to 7% range and nonfood was the best performing category.
"We also saw, as Ron mentioned in his comments, strong growth in travel as well, which I think is a good indicator of where there's great value, our members are really embracing that proposition that we're offering." — Gary Millerchip (CFO)
membership growth quality
Q (Simeon Gutman · Morgan Stanley): The spread between membership growth and unit growth is narrowing. Is that a concern or just noise if member spend keeps rising?
A: They said new member sign-ups grew in fiscal 2026 despite cycling a strong 2025 and without major Asia openings. They highlighted record executive membership penetration, younger members under 40, and strong renewal rates as signs of higher-quality membership and future spend growth.
"we exit fiscal year 2026 with a record high executive penetration, as I mentioned, record high guest engagement, record high digital engagement." — Gary Millerchip (CFO)
assortment after tariffs
Q (Charles Grom · Gordon Haskett): How long did the tariff-driven assortment changes last and how is the assortment for the holiday season?
A: They said the tariff impact was largest in the first and second quarters and eased in the third quarter. They feel very good about the holiday buying lineup and the quality goods coming, citing strong nonfood sales as a precursor to returning to this business.
"It really was most impactful the first, second quarter, died off a little bit in the third quarter that we got back to a little bit more normalcy." — Ron Vachris (CEO)
reversing slower membership growth
Q (Scot Ciccarelli · Truist): Membership growth has slowed for 8 quarters. What will reverse that trend and when might it happen?
A: They said new member sign-ups continue and growth now looks more like a normalization as younger digitally engaged members mature through the base. Executive penetration and future big openings in Asia could accelerate headline membership growth, but current growth and quality metrics are acceptable.
"I think for us, when we look at the balance of the business, we feel good around where the membership growth rate is today." — Gary Millerchip (CFO)
vendor price increase visibility
Q (John Heinbockel · Guggenheim): What visibility do you have on vendor price increases and how do you use substitutability and Kirkland Signature to respond?
A: They said visibility on supplier price changes varies by commodity and ranges from short notice to about 90 days. They work with vendors, use Kirkland Signature items to fight pricing pressure, and buyers continually focus on reducing prices and managing commodity-driven increases.
"So it's anywhere from 30 days to 90 days plus." — Ron Vachris (CEO)
AI and agentic commerce impact
Q (Rupesh Parikh · Oppenheimer): How is Costco positioned as agentic commerce and AI usage evolves?
A: They said it's early but encouraging: members are using AI to search and they see triple-digit growth in sales originating from large language model searches. They plan to improve digital data and product pages so Costco's curated assortment and value show up transparently in AI search results.
"we're seeing triple-digit growth in terms of the sales that we're seeing originate from that search activity on the different large language models, the AI tools that are out there for members." — Gary Millerchip (CFO)
younger members and club experience
Q (Corey Tarlowe · Jefferies): Do younger, digitally savvy members change how the club should be oriented in 3–5 years?
A: They said younger members often sign up digitally, so Costco is improving digital experiences and personalization. But the warehouse remains central as the place that creates the treasure-hunt experience and drives loyalty; combining warehouse and digital enhances engagement and frequency.
"but the warehouse continues to be hugely important to the value that we offer for members to create a differentiated experience." — Gary Millerchip (CFO)
international membership differences
Q (Kelly Bania · BMO): How do member households in Asia compare to the U.S. and how does that affect membership math?
A: They said Asian warehouses often have many more members per warehouse but those members visit less frequently, while U.S. warehouses have fewer members who spend more per member. Openings in Asia can boost membership counts but may lower sales-per-member averages, so they focus on quality and engagement.
"in many cases, we're going to see a much higher number of members per warehouse, but they often visit less frequently." — Gary Millerchip (CFO)
inflation details and LIFO charge
Q (Gregory Melich · Evercore): Can you unpack food and nonfood inflation and explain the large LIFO charge in the quarter?
A: They said cumulative inflation across merchandising is running in the low-single digits and is relatively stable. Nonfood inflation rose mainly due to memory costs and petroleum-related items; the LIFO charge reflected late-year inflation in those categories and equates to about 1.5% inflation on year-end U.S. inventory.
"we feel like inflation currently is running in the low-single digits, and it's relatively stable overall from what we've seen in prior quarters." — Gary Millerchip (CFO)
consumer strength across categories
Q (Gabriella Garr · TD Cowen): How strong is the consumer now across income groups and what about price elasticity after value investments?
A: They said members remain resilient and buy both value everyday items and premium discretionary items when they see great value. Examples include strength in nonfoods like tires and appliances and in fresh premium items like USDA Prime and Wagyu, showing both value-seeking and willingness to spend on quality.
"our members are very resilient, and they continue to show a willingness to spend on discretionary items where they see that there's exciting new items that are offering great value to them." — Gary Millerchip (CFO)
younger member maturity and third-party fulfillment
Q (Katharine McShane · Goldman Sachs): How does spending mature for younger members and how much incremental lift from third-party fulfillment?
A: They said younger members are often smaller households with lower incomes and tend to peak in spending around ages 40–55. Executive penetration and gas usage are associated with higher spend. Third-party platforms tend to be incremental, adding choice and additional shopping trips rather than pulling from existing Costco loyalty.
"younger members, generally speaking, as you might imagine, are a smaller household." — Gary Millerchip (CFO)
future grocery inflation outlook
Q (Christopher Horvers · JPMorgan): Will grocery inflation inflect higher in the next 3–6 months given eggs normalizing and oil pressures?
A: They said predicting inflation is difficult due to Middle East uncertainty and possible tariff changes. Recent quarters show relative price stability, and their strategy is to find cost savings and efficiencies to offset commodity pressures and preserve member value, rather than forecast precise inflation moves.
"I think for us, it's -- as you might expect, we think it's difficult to predict what's going to happen with inflation." — Gary Millerchip (CFO)
third-party delivery as long-term solution
Q (David Bellinger · Mizuho): Is third-party delivery the final delivery solution for Costco or will it require new investments for faster service?
A: They said they are comfortable with current digital and delivery improvements: big and bulky delivery times have fallen from weeks to days and most same-day deliveries are done within 45 minutes. These services are incremental, often used by younger members, and complement regular club visits rather than replace them.
"The majority of these deliveries are done within 45 minutes, if that was what the customer wants." — Ron Vachris (CEO)
SG&A pressure and GLP-1 drug impact
Q (Christopher Nardone · BofA): Are any SG&A cost buckets under pressure and are GLP-1 drug price cuts hurting sales now or could next year be worse?
A: They said SG&A showed a bit of leverage in the quarter and they don't see a major headwind now, though general liability and health care costs have grown faster and could affect leverage if trends worsen. On GLP-1s, they experienced an impact but found ways to offset it and drive more value, increased script count, and top-line sales through their health care programs.
"we feel like we found ways to both offset those impacts and also drive more value for our members and drive increased script count as well as top line sales." — Gary Millerchip (CFO)