EARNINGS RESULTS · Q4 2026

Costco Q4 2026: Revenue Up 11.1%, Operating Margin 3.97%

Results for the quarter ended 2026-08-30 bring the business drivers and cash after investment into focus. Quarterly free cash flow was $2.48 bn. The dated assessment on 2026-10-08 was wait at a reference price of $942.25.

Costco · COSTPublished October 8, 2026Quarter ended August 30, 2026

Q4 2026: What the Quarter Delivered

Revenue: $95.72 bn
Revenue growth YoY: 11.1%
Operating income: $3.8 bn
Operating margin: 4%
Diluted EPS, GAAP: $6.75

Costco reported $95.72 bn of revenue in Q4 2026. Revenue rose 11.1% from the comparable prior-year quarter. Operating profit was $3.8 bn, with an operating margin of 3.97%. Reported diluted EPS was $6.75.

How Revenue Reached Operating Profit

The quarter's revenue and operating result imply an operating margin of 3.97%: $3.97 of operating profit for every $100 of revenue, before interest and tax.

Operating margin measures the share of revenue left after merchandise and operating costs. Costco's latest margin improved against the matching fiscal quarter, showing that growth delivered some benefit beyond higher sales.

What the Reported Earnings Include

Other non-operating income: $0 bn
GAAP net income: $3 bn
Diluted weighted-average shares: 0.44 bn shares

Q4 2026 GAAP net income was $3 bn. Other non-operating income was $0 bn.

Reported net income and diluted earnings per share rose against the matching fiscal quarter. The modest decline in the share count helped per-share results, but the improvement chiefly reflects higher profit rather than a shrinking denominator. Reported earnings are not the same as our modeled recurring earnings. Our valuation starts with consolidated operating profit and applies subjective assumptions for taxes, net interest and shares; those assumptions are not management guidance or reported tax and interest-income figures.

Cash Left After Investment

Operating cash flow: $15.82 bn
OCF less cash PPE purchases, plus PPE sales: $9.38 bn
Quarterly operating cash flow: $4.68 bn
Quarterly cash CapEx: $2.21 bn
Quarterly OCF less cash PPE purchases: $2.48 bn

In Q4 2026, operating cash flow of $4.68 bn less cash capital expenditure of $2.21 bn left $2.48 bn of free cash flow. Operations funded cash investment and left cash after that spending.

Costco's operations generate enough cash to fund substantial property investment and still leave a meaningful surplus. In the latest quarter, operating cash generation increased faster than cash investment, leaving more cash after property purchases than in the matching prior period.

The Verdict Recorded on 2026-10-08

Verdict Invest recorded wait on 2026-10-08, using a reference price of $942.25 dated 2026-10-07. This assessment relates to the Q4 2026 results, with a 12-month horizon and stated validity through 2026-11-07.

Confirmation to watch: Warehouse expansion sustains sales growth while member loyalty remains strong.
Confirmation to watch: Higher sales volumes spread operating costs and support better margins.
Confirmation to watch: Operating cash generation continues to fund property investment and leave substantial cash available.
Risk to this assessment: Weaker member renewals undermine the membership proposition.
Risk to this assessment: Labor or merchandise costs persistently outrun sales growth and erode margins.
Risk to this assessment: Property investment absorbs more cash without corresponding growth in sales and operating profit.