Blog — 6 Oct, 2026
Behind the Earnings Call: Costco Q4 2026
By Janya Goel
An analysis of Costco's Q4 2026 earnings call across analyst expectations, transcript sentiment, retail factors and workforce data.
Overview
Costco reported fourth-quarter fiscal 2026 revenue of $95.7 billion, net income of $3.0 billion, and diluted earnings per share of $6.75.
Visible Alpha consensus estimates prior to the release were $94.8 billion for revenue, $2.9 billion for net income, and $6.52 for diluted EPS.
A headline beat tells you what happened, but not why or what comes next. By combining earnings call commentary, consensus estimates, retail factor signals and workforce analytics, this analysis builds a fuller picture of the quarter than any single source can provide.
Financial performance and consensus
Powered by Visible Alpha Estimates
Net sales for the fourth quarter rose 11% year over year to $93.87 billion, while membership fee income reached $1.849 billion, up 7.3% and still benefiting from the 2024 fee increase.
Against consensus, Costco delivered a modest upside. Revenue, net income and diluted EPS came in ahead of Visible Alpha estimates by 0.9%, 3.4% and 3.5% respectively.
The beat was driven by stronger-than-expected comparable sales in the US and international markets, while Canada and membership fees landed slightly below expectations. Forward estimates for 2027 and 2028 have moved higher.
Costco: Visible Alpha consensus expectations, Q4 2026 earnings surprise, and forward revisions
Data compiled Sep. 29, 2026. e = estimate; PreQ = prequarter; EPS = earnings per share. Arrow reflects the change in current vs. PreQ expectations. Tan (↑): current estimates higher than PreQ; Gray (↓): current estimates lower than PreQ. Source: Visible Alpha, a part of S&P Global Market Intelligence. © 2026 S&P Global.
Membership and renewals
Costco ended the quarter with 84.1 million paid members, up 3.8%, and 150.4 million cardholders, up 3.6%. Paid executive members rose 9.4% to 42.3 million, an all-time high for executive penetration. Renewal rates improved to 92.3% in the US and Canada and 89.8% worldwide.
Management framed membership quality and engagement, spanning executive penetration, gas engagement and digital engagement, as the primary driver of sustained sales growth.
Costco opened 28 warehouses in fiscal 2026 (25 net new) to reach 939 worldwide, and plans 33 more in fiscal 2027 as it works toward a run rate of 30 net new warehouses a year over the next five to ten years.
What the earnings call revealed
Powered by ProntoNLP Transcript Analytics
ProntoNLP surfaces business event scores, sentiment and rising trends from the call, turning hours of commentary into structured, granular insight
Customer behavior
Shoppers stayed resilient and increasingly young, with a notable rise in traffic from AI search.
- Worldwide traffic and shopping frequency increased 3.3%, while average ticket rose 5.9%.
- The membership base continues to skew younger, with members under 40 now making up more than a quarter of the total base, up nearly 60% since COVID.
- Executives described members as resilient, being thoughtful about everyday spending while remaining willing to splurge on discretionary items that offer strong value.
- Shopping habits are shifting toward healthier packaged foods and protein items.
- Traffic originating from AI search grew triple digits for a second consecutive quarter and showed the highest conversion rate of any channel, though it remains a small base overall.
Sales strategy
The strategy balances growth in the member base with growth in spend per member, backed by expansion and digital investment.
- Costco continues to expand into new US markets alongside international growth in Europe, Canada and Mexico, with a pipeline planned for Asia and Australia in fiscal 2028.
- Digital and personalization investments drove triple-digit growth in sales from personalized initiatives, and Costco discontinued its Costco Next marketplace in favor of integrating those items directly into its own app and website.
- Third-party delivery partnerships, such as Instacart, are viewed as largely incremental to the core business and tend to attract younger members seeking faster delivery.
Product
Kirkland Signature anchors the value proposition, while non-food and ancillary businesses led growth.
- Kirkland Signature offers savings of 15% to 20% versus national brands, with new launches including matcha powder, silver bars, pretzel sandwiches and ultrafiltered milk, plus targeted price cuts on items like walnuts, coffee and black pepper.
- Non-food was the standout category with mid-to-high single-digit comparable sales growth, led by gold and jewelry, home furnishings, housewares, small electrics and health and beauty.
- Pharmacy sales grew nearly 20%, supported by GLP-1 programs and expanding digital pharmacy tools.
- Ancillary businesses including gas, pharmacy and travel all grew faster than the company's overall growth rate.
Risks and headwinds
Management pointed to several pressures on the outlook.
- Tariff uncertainty remains a concern, and Costco continues to make investments to absorb tariff costs and protect member pricing.
- Overall inflation is running in the low single digits but is uneven across categories, with persistent pressure in beef, resins, steel, and flour offset by deflation in eggs, dairy, and butter.
- Non-food inflation ticked up due to higher memory costs in consumer electronics and gas/petroleum items tied to volatility from the conflict in the Middle East, and management said the outlook remains difficult to predict.
- The supply chain experienced minor disruptions from recent typhoons in Asia and Panama Canal delays linked to El Niño, and the company is watching freight costs closely amid higher fuel prices.
- Changes in GLP-1 drug pricing continue to pose a headwind to pharmacy economics, though the company believes it has offset this impact through higher volume and added member value.
Rising Trends from ProntoNLP
Retail factor signals
Powered by Alpha Signals Retail Factors
Costco ranked in the first quintile of the US retail universe across many indicators, and the call commentary lines up closely with the factor data. US same-store sales growth of 6.5% supports its top percentile rank, while short interest of 1.2%, noted by management, is consistent with its top quintile position. The 28 new warehouse openings keep its store location attractiveness ranking high, and management's description of positive market sentiment, citing record renewals and strong performance despite inflation, aligns with the favorable short sentiment rank.
Headcount Analytics
- Combined headcount across all Costco entities has eased 2.6% over the past 21 months - but turnover has been cut in half (7.8% → 3.8%), leaving a leaner, more tenured workforce behind (average tenure 4.74 years across all roles, up from 4.12 years in Dec-24).
- Not all markets are moving the same direction - Costco's UK holding entity has shed 16.5% of its workforce in 21 months, while Australia sits rock-steady, essentially flat (see chart).
About the datasets
ProntoNLP
ProntoNLP leverages advanced Natural Language Processing, using Large Language Models trained on S&P content to transform how users interact with market data. Clients can better understand market trends, access unique insights and data-driven recommendations, and get granular insight at the event and sentiment level without reading through the full document. Unlike general AI tools such as ChatGPT, which offer broad conversational capabilities, ProntoNLP is built specifically for market analysis and financial insights, delivering more accurate and relevant information tailored to industry needs.
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Visible Alpha Estimates
The Visible Alpha Estimates dataset includes forecasts, assumptions, and logic from full working sell-side models. This deep consensus data provides a quick understanding of the sell-side view on a company or industry at an unprecedented level of granularity, timeliness, and interactivity.
Alpha Signals Retail Factors
This is a suite of factors designed to generate excess return employing general signals alongside key industry specific measures. We score stocks on attributes including same store sales, store growth and operating strength, among others. Performance & attribution results are based on S&P Global’s Retail universe (avg ~270 US names)
Headcount Analytics
The Headcount Analytics dataset provides a comprehensive view of a company's workforce composition, trends, and metrics. It includes detailed insights into over 220 million employees worldwide, with monthly updates since 2010 covering more than 5.5 million entities. The dataset features geographic distribution of headcount data, employee tenure, and talent flow, enabling users to assess the operational structure of companies.