Costco’s Bull vs Bear Case Ahead of Q4 Earnings Tonight

That wraps up our initial coverage of Costco’s Q4 results. Thank you for stopping by!

Costco’s cash generation soared in fiscal 2026, with operating cash flow reaching $15.83 billion, up nearly 19% from $13.34 billion last year. This came even as spending on property and equipment increased to $6.44 billion.

Costco ended the year with $20.21 billion in cash, up more than $6 billion from $14.16 billion a year earlier. The company also returned capital to shareholders, spending $848 million on share repurchases and $2.46 billion on dividends during the year.

Costco reported $6.75 in diluted EPS, up 15% from $5.87 a year ago and ahead of the $6.53 Wall Street consensus. But part of that growth came from a one-time benefit.

The company said IEEPA tariff refunds added $0.15 per share to Q4 earnings, after accounting for some of the refunds Costco reinvested into increased value for members.

Excluding that benefit, EPS would have been roughly $6.60, still enough to clear Wall Street’s estimate. Net income increased nearly 15% to $3.00 billion.

Costco finished fiscal 2026 with another quarter of strong growth. Net sales increased 11.2% to $93.9 billion, while total company comparable sales rose 9.4%. Excluding gasoline prices and foreign exchange, comparable sales increased 6.7%.

The standout was digitally enabled sales, which climbed 19.5% reported and 19.8% adjusted. U.S. comparable sales rose 10.7%, or 7.2% after adjusting for gas and currency movements.

Costco just reported fiscal fourth-quarter earnings, with shares initially up about 1% following the report. The warehouse retailer delivered beats on both the top and bottom lines.

• Revenue: $95.72 billion vs. $94.89 billion expected
• EPS: $6.75 vs. $6.53 expected

Quick Read:

• Costco beat EPS estimates by 3.4%, with earnings per share growing roughly 15% year over year.
• Revenue increased 11.1% year over year, coming in nearly $1 billion ahead of Wall Street expectations.
• The initial reaction is positive, with $COST shares popping about 1% immediately after the release.

Investors will now be watching membership trends, margins, and management’s fiscal 2027 commentary on the earnings call.

Costco reports fiscal fourth-quarter earnings after the bell, with Wall Street expecting $94.85 billion in revenue and $6.53 in EPS. Those numbers would cap fiscal 2026 with another period of double-digit growth.

Costco’s Q3 report largely met expectations but still sent shares tumbling 3.91%. This time around, investors will be watching core-on-core margins closely, particularly for any impact from gasoline prices and other factors outside Costco’s underlying retail business.

Beyond the headline numbers, membership fee income and renewal trends remain key indicators of the strength of Costco’s model. Investors will also be listening for updates on tariff refund timing and management’s planned pace of new warehouse openings heading into fiscal 2027.

Costco still trades at roughly 45x earnings, while the consensus analyst price target of $1,069 implies around 18% upside. Any meaningful deterioration in core margins or spending trends, however, could put pressure on Costco stock heading into the new fiscal year.