Costco's Q4 Earnings Smash Expectations — And Members Are Getting Cheaper Prices

The Numbers, Fast

Costco just wrapped its fiscal Q4 2026, and the warehouse giant is firing on all cylinders. Net income hit $2.998 billion — that's $6.75 per diluted share — on net sales of $93.87 billion, up from $84.43 billion a year ago. Sales rose 11.2%, comparable sales climbed 9.4% (6.7% once you strip out gas prices and currency swings), and digital sales jumped a huge 19.5%. Even foot traffic was up 3.3% worldwide, which tells you people aren't just spending more per trip — they're showing up more often.

Strip out a one-time tariff refund benefit, and core net income still grew 12.3%, with EPS up 12.4%. That's the kind of steady, boring-in-a-good-way growth that's made Costco a favorite among both shoppers and investors for years.

Wait, Tariff Refunds?

Here's the part that's actually interesting: Costco got back $184 million in refunds tied to tariffs originally imposed under the International Emergency Economic Powers Act — $174 million in refunds plus $10 million in interest. CFO Gary Millerchip says that's just over a third of what the company expects to eventually collect, and Costco already received a similar chunk in the first quarter of fiscal 2027.

Instead of pocketing all of it, Costco is doing something classic Costco: reinvesting the majority of those refunds directly into lower prices for members. CEO Ron Vachris confirmed the company used part of the Q4 refund to cut prices in the back half of the quarter on produce, meat, beverages, home furnishings, and hardware — including a price drop on Kirkland Signature walnuts.

Why This Matters to Shoppers

Millerchip put the company's philosophy plainly: "Our goal is to be the first to lower prices where we see opportunities to do so." In an era where most retailers are quietly raising prices and shrinking package sizes, Costco is doing the opposite — turning a government refund into a member discount. That's not just good PR, it's core to the membership model: keep prices low enough that people keep renewing, keep showing up, and keep buying in bulk.

The Bigger Picture

This earnings report checks every box investors and shoppers care about: sales growth, profit growth, rising membership engagement (traffic up, digital sales way up), and a company actively passing savings back to customers rather than banking every dollar. With more tariff refunds expected in the coming quarters, don't be surprised if more price cuts roll out at your local warehouse in the months ahead. For a company built on thin margins and loyal members, that's the whole business model working exactly as intended.