Costco's Membership Fee Boost Is About to Run Out
Thursday's report may be the last to get much lift from Costco's 2024 fee hike, and membership fees make up about half its operating income.
Costco Wholesale, a major U.S. retail chain, is set to release its fiscal 2026 fourth-quarter results on Thursday, Sept. 24, after the markets close. While investors have been aware since early September that the company's net sales for the period were $93.9 billion, up 11.3% year-over-year, the focus now turns to Costco's profitability.
The company's membership fees, which were raised in September 2024, are nearing the end of their impact on the financial report, potentially making this the last quarter where they significantly contribute to operating income. Gross margin, membership fee income, and earnings were not disclosed in the monthly reports, but are now revealed in the full quarterly results.
This is significant as membership fees accounted for roughly half of Costco's operating income in fiscal 2025. Despite the positive sales growth, the stock price remains a concern, trading at around $899 per share, which is approximately 45 times earnings. This high valuation is predicated on the earnings line, rather than the sales line.
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