Costco Earnings Preview: Can Membership Growth Push COST Stock Higher?

Key Takeaways

• Costco will release its fiscal fourth-quarter 2026 results after the US market closes on September 24.
• Wall Street expects earnings of approximately $6.55 per share and total revenue near $94.6 billion.
• Costco has already reported fourth-quarter net sales of $93.9 billion, up 11.3% year over year, with adjusted comparable sales increasing 6.7%.
• Membership fee income, paid-member growth, Executive Membership upgrades and renewal rates will be critical for COST stock.
• Costco’s premium valuation means strong sales may not be enough unless earnings, margins or membership figures exceed expectations.

Costco Wholesale is preparing to report fiscal fourth-quarter earnings after the closing bell on Thursday, September 24, with investors looking beyond headline sales growth to determine whether the warehouse retailer’s membership business can restore momentum in COST stock.

The company has already disclosed strong fourth-quarter sales, but membership growth has slowed from unusually elevated levels. With Costco shares trading around $898 and roughly 18% below their record high, the earnings report could determine whether investors view the recent pullback as an opportunity or evidence that the stock’s premium valuation remains difficult to justify.

When Is the Costco Earnings Date?

Costco is scheduled to release its fiscal fourth-quarter 2026 earnings on September 24. The company’s earnings presentation is listed for 1:15 p.m. Pacific Time, or 4:15 p.m. Eastern Time, shortly after regular US trading ends.

The report will cover the 16-week quarter and 52-week fiscal year that ended on August 30.

Wall Street expects Costco to report:

Bank of America analyst Christopher Nardone expects earnings of $6.52 per share, slightly below the consensus forecast. Oppenheimer has also suggested that the current estimate may present a demanding hurdle.

Costco earned $5.29 per diluted share in the corresponding quarter last year. Reaching the consensus estimate would therefore represent earnings growth of approximately 24%.

Costco Has Already Reported Strong Fourth-Quarter Sales

Investors will not have to wait for the earnings report to assess Costco’s top-line momentum.

The company reported fourth-quarter net sales of $93.9 billion, an increase of 11.3% from $84.4 billion one year earlier. Full-year net sales rose 10.2% to $297.3 billion.

Reported comparable sales increased 9.4% during the quarter. Excluding changes in gasoline prices and foreign exchange rates, comparable sales grew 6.7%, including:

• US comparable sales growth of 7.2%
• Canadian comparable sales growth of 4.6%
• Other international comparable sales growth of 6.2%
• Digitally enabled comparable sales growth of 19.8%

August sales provided another positive signal. Net sales increased 9.9% to $23.7 billion, while adjusted companywide comparable sales rose 5.4%. Costco estimated that the later timing of Labor Day reduced August sales growth by slightly less than 0.75 percentage points.

The figures indicate that Costco continues to attract traffic despite higher interest rates, uneven consumer confidence and pressure on household budgets. Its focus on groceries, fuel and competitively priced everyday products has helped the company remain resilient while discretionary retailers face more volatile demand.

However, sales growth alone may not determine the stock’s reaction. Much of the quarterly revenue is already known, shifting attention toward profitability and membership metrics.

Membership Growth Will Be the Most Important Signal

Costco’s membership program is central to its business model. Annual fees generate predictable, high-margin revenue that allows the company to maintain low merchandise markups and reinforce customer loyalty.

In the fiscal third quarter, membership fee income increased 10.7% year over year to $1.37 billion. Excluding currency movements and the effect of Costco’s previous membership-price increase, fee income still grew approximately 7%.

The company ended the quarter with 82.9 million paid members, up 4.1% from a year earlier, and 149 million total cardholders. Paid Executive Memberships rose more rapidly, increasing 9.6% to 41.2 million.

Executive members are particularly valuable because they typically visit Costco more frequently and spend more than standard members. Continued upgrades could therefore support both fee income and comparable sales.

Renewal rates will also receive close attention. Costco’s US and Canadian renewal rate stood at 92.2% in the third quarter, while the worldwide rate was 89.7%. Both figures remain exceptionally high for the retail industry.

The concern is that paid-membership growth has moderated. Management previously described annual growth of 4% to 5% as a more normal pace when Costco is not entering a major new market.

Online sign-ups also tend to renew at slightly lower rates than customers who join inside a warehouse. Costco has responded with targeted digital communications and retention campaigns, but investors will want evidence that these initiatives are producing measurable improvements.

For COST stock, the strongest combination would be accelerating paid memberships, sustained Executive upgrades and stable or improving renewal rates.

Can Digital Growth Support Costco’s Expansion?

Digital commerce has emerged as another important part of Costco’s growth story.

Digitally enabled comparable sales increased 19.8% on an adjusted basis during the fourth quarter after rising 20.8% in the previous quarter. Website and mobile-app traffic increased 37% during fiscal Q3, while management said personalized recommendations had contributed nearly $5 billion in e-commerce sales.

Same-day delivery, pharmacy services and online product discovery are helping Costco engage younger customers without abandoning its warehouse-based model. The company has also reported rapidly rising traffic from AI-powered search platforms, although that channel remains relatively small.

Investors will look for evidence that digital sales can expand without creating excessive fulfillment costs or weakening merchandise margins. Costco’s traditional model benefits from customers visiting warehouses, purchasing in bulk and transporting goods themselves. Greater reliance on delivery may generate additional sales but can also increase operating expenses.

Margins Could Determine the Stock’s Reaction

Costco deliberately operates with thin retail margins, making even small changes important to earnings.

The company’s reported gross margin fell 21 basis points year over year to 11.04% in the third quarter. Excluding gasoline inflation, however, gross margin improved by one basis point.

Margins on core merchandise weakened as Costco reduced prices on several food and Kirkland Signature products. Higher transportation and energy costs also created pressure.

The central question is whether Costco can balance three priorities:

• Maintaining its reputation for low prices
• Protecting merchandise margins
• Funding wage, healthcare, logistics and expansion costs

A decline in oil prices could reduce transportation pressure, but tariff uncertainty remains a risk for imported products. Costco has historically used its purchasing scale, limited product selection and supplier relationships to control costs more effectively than many traditional retailers.

Management’s commentary on food inflation, imported merchandise and consumer behavior may be more influential than the reported EPS figure.

Could Costco Announce Another Special Dividend?

A potential special dividend represents an additional catalyst.

Costco last declared a $15-per-share special dividend in December 2023, which was paid in January 2024. Analysts have suggested that the company’s strong cash generation and balance sheet could support another distribution.

A payment offering a similar percentage yield at Costco’s current share price could approach $22 per share, although the company has not confirmed that a special dividend is under consideration.

An announcement would probably support COST stock even if quarterly earnings only meet expectations. However, investors should not assume that the board will authorize a payment alongside the earnings release. Costco has historically announced special dividends irregularly rather than according to a fixed schedule.

Costco Stock Faces a High Valuation Bar

Costco shares currently trade near $898, giving the company a market capitalization of approximately $399 billion. The stock is valued at roughly 45 times trailing earnings, a substantial premium to the broader retail sector and the S&P 500.

That valuation reflects Costco’s high renewal rates, recurring membership revenue, steady store traffic and defensive characteristics. It also creates a demanding earnings setup.

A modest EPS beat may not be sufficient to drive a sustained rally if paid-member growth slows, renewal rates decline or management warns about margins. Conversely, stronger-than-expected membership income or a special dividend could reassure investors that Costco’s long-term earnings power remains intact.

The potential post-earnings scenarios include:

Can Membership Growth Push COST Stock Higher?

Membership growth can lift COST stock, but investors will probably require more than a stable renewal rate.

The strongest bullish signal would be an acceleration in paid memberships accompanied by continued double-digit growth in fee income and Executive Membership upgrades. If those figures are combined with resilient margins and optimistic expansion commentary, the earnings report could provide the foundation for a recovery.

Costco enters the announcement with strong comparable sales, nearly 20% digital growth and a business model that continues to attract value-conscious consumers. The challenge is that those strengths are already reflected in a premium valuation.

The September 24 report will therefore be less about whether Costco remains a strong retailer and more about whether membership growth, operating leverage and future expansion can produce earnings fast enough to justify the current price of COST stock.

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