Costco Misses Revenue Estimates in Q4

Costco (NASDAQ:COST) reported fiscal fourth-quarter revenue that missed Wall Street expectations, as reduced spending on high-ticket items and lower gasoline prices impacted the membership-based retailer.

Chief Financial Officer Gary Millerchip noted that consumers are becoming more selective in their spending, particularly seeking deals on items like televisions and home appliances. He highlighted that shoppers are looking for value as economic pressures persist.

Gas prices rose 5.4% during the 16-week period ending September 1, a slower rate compared to the 6.6% increase seen in the previous quarter. Meanwhile, e-commerce sales grew by 18.9%, slightly below the 20.7% growth rate from the prior quarter, despite Costco's ongoing efforts to enhance its online and mobile sales platforms.

Costco's revenue for the quarter edged up nearly 1% to $79.69 billion, falling short of Wall Street's estimate of $79.93 billion. However, the company exceeded expectations in terms of profit, reporting net income of $5.29 per share.

Millerchip also addressed the recent increase in Costco's membership fees—$5 more for "Gold Star" members and $10 more for executive members—which took effect on September 1. He suggested that the fee hike will have a modest impact in the early part of the fiscal year but is expected to boost returns more significantly in the latter half of the year and into fiscal 2026.

He further cautioned that earnings growth in 2025 may not follow a typical linear pattern, with more substantial gains likely to occur in the back half of the year.