Key Takeaways
- Costco’s fourth quarter earnings announcement is scheduled for September 24, with quarterly revenue already disclosed at $93.9 billion, representing an 11.3% annual increase
- The warehouse retailer’s membership renewal percentages have shown consecutive quarterly declines, reaching 92.1% in the second quarter of fiscal 2026, though executives indicate stabilization
- The company significantly broadened its delivery collaboration with Uber Eats, jumping from coverage in 17 states to 48, encompassing approximately 600 warehouse facilities
- RBC Capital retained its Sector Perform assessment with a $1,000 share price objective, forecasting fourth quarter earnings per share of $6.54
- Analyst community consensus leans toward Moderate Buy, with mean price projections around $1,090, suggesting approximately 21% appreciation potential
The wholesale giant is approaching its fourth quarter financial disclosure scheduled for September 24 with several developments already in motion. Shares traded near $903 on Wednesday, posting modest gains following announcements regarding the broadened Uber Eats collaboration.
Costco Wholesale Corporation, COST
Fourth quarter revenue reached $93.9 billion, marking an 11.3% year-over-year advancement. Comparable warehouse sales increased 9.4%, or 6.7% excluding gasoline and currency fluctuations. E-commerce and digitally facilitated transactions surged 19.5%.
Given that Costco discloses monthly sales data, market participants already possess substantial visibility into top-line performance before the official earnings announcement. The outstanding question centers on margin efficiency and bottom-line conversion.
Street expectations indicate earnings per share growth of 11.4% alongside revenue expansion of 10.1% compared to the prior year period. RBC Capital maintains a marginally higher forecast, anticipating adjusted EPS of $6.54 versus the $6.50 consensus estimate.
Membership Retention Takes Center Stage
The more critical element for the upcoming earnings release involves membership metrics. Renewal percentages have experienced gradual erosion across multiple consecutive quarters, declining from 93.0% in the second quarter of fiscal 2025 to 92.1% in the corresponding period of fiscal 2026.
Costco previously acknowledged this trend in late 2024, attributing it to historically lower renewal patterns among digitally acquired cardholders. Company leadership now indicates the downward pressure is moderating.
Chief Financial Officer Gary Millerchip characterized renewal percentages as having reached a plateau during the most recent quarterly conference call, though he refrained from providing explicit forward guidance.
While membership fee revenue represents a relatively modest share of total sales, it delivers outsized profitability. In fiscal 2025, Costco collected $5.32 billion in membership dues, accounting for approximately 51% of the company’s $10.38 billion operating profit.
The ongoing renewal rate deterioration has created headwinds for the stock. COST currently trades roughly 4% below its initial post-third quarter closing price and approximately 8% beneath pre-earnings levels from that period.
Wednesday brought news that Uber Eats dramatically scaled its Costco delivery arrangement from 17 states to 48, bringing nearly 600 warehouse locations onto the delivery platform.
The partnership includes promotional incentives where qualifying Costco cardholders receive 50% off their initial year of Uber One membership, followed by 20% discounts in years thereafter.
Total Costco membership count stood at 82.90 million as of June 2026, representing a 4% year-over-year deceleration in growth rate. The Uber Eats expansion strategy appears designed to enhance existing membership value propositions while potentially attracting new subscribers.
Analysis from Edgewater Research released Tuesday suggested that DoorDash may pursue its own delivery arrangement with Costco, and indicated the retailer might restrict delivery platform access exclusively to paid members.
RBC Capital indicated it does not anticipate significant sentiment shifts following the September 24 financial release. The firm’s $1,000 target valuation reflects approximately 40 times its fiscal 2028 adjusted earnings per share projection of $25.00.
Among 21 sell-side analysts tracking the security, 15 maintain Buy ratings, five recommend Hold positions, and one rates it a Sell. The average target price stands at $1,090.79.
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