Costco Wholesale (NASDAQ:COST) has long been a terrific investment, delivering superior returns no matter when you bought the stock. Whether you bought shares a year ago, a decade back, or even at the turn of the millennium, the stock’s consistent outperformance stems from its membership-driven model that fosters loyalty and steady revenue.
Beyond share price gains that often double the broader market, Costco has rewarded investors through reliable dividends. For the past 21 years, it has raised its quarterly payout annually, building a track record of financial discipline. Even more enticing, the company has periodically issued hefty special dividends, turning a good investment into an exceptional one by accelerating total returns.
On Thursday, Dec. 11, Costco will report its fiscal first quarter 2026 results. Can investors expect another special dividend then?
A Rare Off Year for Costco’s Stock
Despite its phenomenal success, Costco’s shares have faltered in 2025, down more than 2% year-to-date while the S&P 500 has surged 17%. This marks one of the stock’s worst performances against the index in over two decades — it hasn’t performed so poorly since 2002. The divergence underscores a change: after a blistering 39% gain in 2024 (compared to a 25% gain by the benchmark index), Costco entered the year with sky-high expectations, trading at a price-to-earnings ratio exceeding 50 — well above peers like Walmart (NYSE:WMT) or Target (NYSE:TGT).
Several factors explain the retailer’s struggle. First, slowing comparable-store sales growth suggests a mild consumer spending pullback. Fiscal 2025’s fourth quarter saw revenue rise 8%, but comp sales growth slowed to 5.8% from earlier highs, with November’s figures dipping to 6.9% company-wide. Analysts point to inflation-weary consumers trading down or delaying big-ticket buys, despite Costco’s value-oriented focus.
Second, last year’s membership fee hike that added $5 to Gold Star members and $10 to the Executive tier, juiced Q4 fees by 14% but it sets up tough year-over-year comparisons this time around.
Third, the stock’s premium valuation leaves little room for error; earnings growth of 9% to 11% annually for the next five years can’t fully justify the multiple when tech giants offer faster expansion at lower multiples.
A Steady but Not Spectacular Outlook
Analysts remain cautiously optimistic for the upcoming quarter. Consensus forecasts call for earnings of $4.27 per share and revenue of $67.15 billion, implying 11% and 8% growth, respectively, from last year.
These figures build on November’s preliminary sales of $23.64 billion, up 8.1%, with ex-fuel comps at 6.4%. Management hasn’t issued explicit Q1 guidance, but during the Q4 earnings conference call, executives emphasized warehouse expansions, with 35 new locations planned for fiscal 2026, including five relocations, to drive membership renewals above 90%.
They also highlighted e-commerce growth and international momentum, though U.S. traffic softened slightly. Overall, Wall Street expects a solid beat, but any hint of further comp slowdown could pressure shares.
Odds of a Special Dividend Check
Costco’s special dividends have been a highlight, typically every three years but with flexibility. Here is the history:
| Date |
Special Dividend Amount |
Company Performance before Announcement |
| December 2023 |
$15 per share |
Solid performance on strength of membership gains |
| November 2020 | $10 | Strong performance fueled by pandemic-driven essential goods demand |
| April 2017 | $7 | Despite broader retail pressures, its own comps were robust |
| January 2015 | $5 | Strong domestic and international comps growth amid warehouse expansion |
| December 2012 | $7 |
Reflects a recovery after the recession and consistent membership growth |
.Table by author. Source: Costco SEC filings.
The three-year cadence suggests we may be early, but past announcements also coincided with a company performance that was usually better than average — double-digit sales gains and positive stock momentum.
Today’s softer comps and flat shares should temper any potential enthusiasm for a special dividend announcement, though Costco’s $15 billion cash pile and low debt provide it with flexibility. If Costco handily beats Q1 estimates, an announcement is possible, but I wouldn’t count on it.
Key Takeaway
The historical record, Costco’s current underperformance, and comp headwinds make a special dividend unlikely. Still, with shares near 2025 lows and a forward P/E of 40 indicating the stock is a relative bargain, scooping up this dividend stalwart now remains a smart long-term play.
Costco has a solid competitive moat, and patient investors have always been rewarded.
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