Costco reported fiscal fourth-quarter net income of $2.998 billion, or $6.75 a diluted share, up from $2.610 billion, or $5.87 a diluted share, a year earlier. Part of the gain came from what the company called a non-recurring benefit: tariff refunds tied to a Supreme Court ruling earlier this year.
The numbers
For the 16 weeks ended Aug. 30, 2026, net sales rose 11.2% to $93.9 billion from $84.4 billion. Comparable sales for the quarter were up 9.4% (6.7% excluding gasoline prices and foreign exchange). Operating income rose 13.8% to $3,801 million from $3,341 million. For the full fiscal year, net sales reached $297.2 billion, up 10.1%, and net income was $9.226 billion, or $20.76 a diluted share, up from $8.099 billion, or $18.21 a diluted share, a year earlier.
The tariff refund
Costco said in its results release that the fourth quarter “was positively impacted by a non-recurring benefit of $0.15 per diluted share from IEEPA tariff refunds received in the quarter, less partial reinvestment of those refunds in increased member values.”
The refunds trace back to a Supreme Court ruling. In Learning Resources, Inc. v. Trump, decided Feb. 20, 2026, by a 6-3 vote, the Court held that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. U.S. Customs and Border Protection has said it will issue validated refunds of duties paid under that law pursuant to court order, processed through a CBP system called CAPE, with refunds generally issued 60 to 90 days after an application is accepted. Costco’s release did not disclose a dollar figure for the refund it received, and none is used here.
On the company’s conference call, Chief Executive Ron Vachris said the reinvested refund dollars went predominantly toward price reductions on a number of items in the second half of the quarter.
Without the refund
Excluding the benefit, net income rose 12.3% and earnings per share rose 12.4%, Chief Financial Officer Gary Millerchip said on the company’s conference call. He said Costco received $184 million in the fourth quarter — $174 million in refunds and $10 million in interest — a little more than a third of the total refunds it expects, and that it had already received a similar amount in the first quarter of fiscal 2027, with most of it to be reinvested in member value.
Members and fees
Membership fee income rose to $1,850 million in the quarter from $1,724 million a year earlier, an increase of about 7.3%. For the full year, membership fees totaled $5,907 million, up from $5,323 million, an increase of about 11.0%.
Millerchip also said paid membership reached 84.1 million, up 3.8%, with 150.4 million cardholders, up 3.6%. Paid Executive memberships, which carry a higher fee and a rewards cap, rose 9.4% to 42.3 million. Renewal rates were 92.3% in the U.S. and Canada and 89.8% worldwide, each up 0.1 percentage point from the prior quarter.
Costco last raised its fees on Sept. 1, 2024: the Gold Star and Business membership went to $65 from $60, the Executive membership to $130 from $120, and the Executive reward cap to $1,250 from $1,000.
Where sales grew fastest
Digitally-enabled comparable sales grew fastest of any channel Costco reports, up 19.5% for the quarter (19.8% adjusted) and up 20.9% for the full year (20.7% adjusted). Among regions, the U.S. led with 10.7% (7.2% adjusted), ahead of other international markets at 7.0% (6.2%) and Canada at 5.0% (4.6%).
Costco ended the quarter operating 939 warehouses, including 647 in the U.S. and Puerto Rico, 115 in Canada and 43 in Mexico. The company also reported cash and cash equivalents of $20.2 billion as of Aug. 30, 2026, up from $14.2 billion a year earlier.
What’s next
Costco’s release gave no financial forecast for fiscal 2027. On the conference call, Chief Executive Ron Vachris said the company plans to open 33 warehouses in fiscal 2027, five of them relocations, and Millerchip said it plans about $7.5 billion in capital spending, up from $6.4 billion in fiscal 2026.