Costco's FY2026 revenue rose 10.1% to $303.2B and EPS 14.0% to $20.76; Q4 EPS of $6.75 included a $0.15 tariff-refund benefit, and higher gas prices lifted the headline comps.
Revenue
$303.2B
+10.1% YoY
Net income
$9.2B
+13.9% YoY
Diluted EPS
$20.76
+14.0% YoY
Operating margin
3.9%
Overview
Costco closed fiscal 2026 (the 52 weeks ended August 30, 2026) with total revenue of $303.2 billion, up 10.1%, and net income of $9.226 billion, up 13.9%, or $20.76 per diluted share (up 14.0%). Profit grew faster than sales because operating costs grew more slowly than revenue and membership fees, Costco's highest-margin income stream, rose 11.0%.
The fourth quarter, which for Costco is a longer 16-week period, was the strongest of the year: net sales rose 11.2% to $93.9 billion and diluted EPS rose 15.0% to $6.75. Part of that quarter is a one-off. Costco says Q4 included a non-recurring benefit of $0.15 per diluted share from IEEPA tariff refunds (money returned to importers after tariffs imposed under the International Emergency Economic Powers Act were refunded), net of some of that money being passed back to members as lower prices. Without it, Q4 net income grew 12.3% and EPS 12.4%, per the company's supplemental slides.
This analysis is based on the September 24, 2026 earnings release (Exhibit 99.1) and its supplemental slide deck (Exhibit 99.2). The full 10-K, which will carry the detailed segment results and management's discussion, has not been filed yet, so segment profit and management's full explanation of the year are not covered here.
Operating margin is operating income divided by total revenue, i.e. the share of revenue left after paying for the goods sold and running the warehouses, before interest and tax. Costco runs on a thin margin by design: it prices goods close to cost and earns much of its profit from membership fees. In FY2026 the $5.9 billion of membership fees equalled about 51% of operating income.
"Comparable sales" (comps) measure sales growth at warehouses and websites open for more than a year, stripping out the effect of new openings. Costco also reports comps excluding gasoline price changes and foreign-exchange (FX) moves, because pump prices and currency swings can push reported sales up or down without any change in how much members are actually buying.
Fourth quarter (16 weeks)
Metric
Q4 FY2026
Q4 FY2025
YoY Change
Total revenue
$95,723M
$86,156M
+11.1%
Net sales
$93,873M
$84,432M
+11.2%
Membership fee income
$1,850M
$1,724M
+7.3%
Operating income
$3,801M
$3,341M
+13.8%
Operating margin
4.0%
3.9%
+0.1 pts
Net income
$2,998M
$2,610M
+14.9%
Diluted EPS
$6.75
$5.87
+15.0%
Comparable sales, total company
+9.4%
Comparable sales ex gas and FX
+6.7%
Gas prices inflated the headline comp
The gap between the 9.4% reported comp and the 6.7% adjusted comp is almost entirely a U.S. gasoline story. U.S. comps were +10.7% reported but +7.2% excluding gas and FX; Canada (+5.0% vs +4.6%) and Other International (+7.0% vs +6.2%) show much smaller gaps. The slides split the adjusted comp into traffic up 3.3% (more shopping visits) and average ticket up 3.3% (more spent per visit). In the U.S., the reported ticket rose 7.3% but only 3.9% after removing gas and FX. So members were visiting more often and buying somewhat more per trip, but roughly a third of the headline U.S. growth (3.5 of 10.7 points) came from gas prices and FX, mostly fuel, rather than extra purchases.
Higher gas prices also distort the margin percentages. Fuel sells at a very thin margin, so when pump prices rise, fuel becomes a bigger share of sales and pulls the overall percentage down even when the underlying business has not changed:
Gross margin (net sales minus merchandise costs, as a share of net sales) was 11.02%, down 11 basis points (0.11 percentage points) reported, but up 20 basis points excluding gas. On the slides, core merchandise was the main drag reported (-32 bps, -9 bps ex gas); "other businesses" added +23 bps (+32 bps ex gas); a LIFO inventory-accounting charge cost 11 bps; and the tariff-refund item added 9 bps.
SG&A (selling, general and administrative costs, mainly warehouse wages and overhead) fell to 8.94% of net sales, 27 bps better than a year ago reported, but only 2 bps better excluding gas.
The two effects largely cancel out, which is why operating margin still improved. Without the gas distortion, most of the improvement came from gross margin, not from lower costs.
Membership: fee growth slowed in Q4, renewal rates held
Membership fee income rose 7.3% in Q4 (7.7% excluding FX), well below the 11.0% full-year rate, so fee growth slowed as the year ended. The release does not explain the slowdown, and the 10-K should break it down. The base is still growing: paid memberships reached 84.1 million (+3.8%), total cardholders reached 150.4 million (+3.6%), and Executive memberships (the higher-fee tier that earns a reward on purchases) totalled 42.3 million. Executive members account for 75.6% of sales. The renewal rate was 92.3% in the U.S. and Canada and 89.8% worldwide. Costco earns about half its operating income from these fees, so renewal rates are the most important measure of whether the business model is holding up, and they did.
Full year: what drove the numbers
Sales growth came from existing warehouses plus new ones. Net sales rose 10.1% while total comps rose 8.4%. The difference is mostly new warehouses: the count went from 914 to 939 during the year (25 net new: 18 in the U.S., 5 in Canada, 2 in Other International).
Costs grew slower than sales. SG&A was 9.15% of net sales in FY2026 versus 9.25% in FY2025, while gross margin on net sales was roughly flat (11.09% vs 11.12%). Operating income therefore grew 12.5%, faster than revenue.
Below operating income, three smaller items helped. Interest income and other rose to $711M from $589M, as the cash pile grew. The effective tax rate fell to 24.7% from 25.1%. The diluted share count was essentially flat (444.4M vs 444.8M), so buybacks ($848M) mostly offset share issuance to employees and did little to lift EPS. EPS growth of 14.0% therefore reflects real profit growth, not a shrinking share count.
Digital kept outgrowing the warehouses. Digitally-enabled comparable sales rose 20.9% for the year (19.5% in Q4), and the slides report a 30% rise in e-commerce site and app traffic in Q4.
Cash flow and balance sheet
Cash item (FY)
FY2026
FY2025
Operating cash flow
$15,825M
$13,335M
Capital expenditures
$6,435M
$5,498M
Free cash flow (OCF minus capex)
$9,390M
$7,837M
Dividends paid
$2,458M
$2,183M
Share repurchases
$848M
$903M
Cash and equivalents rose to $20.2 billion from $14.2 billion. Capital spending rose 17%, but free cash flow (cash from operations left after paying for new warehouses and equipment) still rose 20%, and Costco kept most of it rather than returning it. Dividends and buybacks together came to $3.3 billion, about a third of free cash flow. $2.2 billion of long-term debt is now due within 12 months (up from $75M a year ago), which the current cash balance covers many times over.
Takeaway: The headline numbers overstate the momentum somewhat. The Q4 comp was helped by higher gas prices and Q4 EPS by a $0.15 tariff-refund windfall. Even after removing both, Costco grew adjusted comps 6.7% with traffic up 3.3%, kept U.S./Canada renewal at 92.3%, and grew underlying Q4 EPS about 12%. The softer spot to watch is membership fee growth, which slowed to 7.3% in Q4 from 11.0% for the full year.
Outlook
Costco does not give earnings guidance. Its one forward-looking figure is expansion: the slides project 967 warehouses by the end of FY2027, 28 more than today (18 in the U.S., 5 in Canada, 5 in Other International), a slightly faster pace than FY2026's 25. That points to continued high capital spending and about 3% annual growth in warehouse count before any comp growth.
Our read: the FY2027 comparisons get harder. The tariff-refund benefit will not repeat, the boost from gas prices will reverse if pump prices fall, and membership fee growth has already started slowing. The underlying drivers (traffic growth of around 3%, high-single-digit ex-gas U.S. comps, U.S. and Canada renewal above 92% and 20%-plus digital growth) support continued high-single-digit to low-double-digit operating profit growth, but not every quarter will beat FY2026's 14% EPS growth. The 10-K (due in early October) should explain the Q4 fee slowdown and give segment-level operating income, and both are worth checking against this read.