Costco Reports Fiscal Q4 Revenue of $95.7 Billion and $6.75 EPS, Including 15 Cents From Tariff Refunds

Fifteen Cents That Explain a Flat Stock

Costco beat Wall Street on both lines this quarter. Net income hit $2.998 billion, or $6.75 a share, up from $5.87 a year earlier^[1][2]. Revenue, including membership fees, reached $95.72 billion^[3]. Analysts had penciled in earnings of about $6.52 to $6.55 a share^[3][4]. Costco cleared that easily.

And yet the stock barely moved after the report landed on September 24^[6]. That's the puzzle at the center of this story. A company beats expectations on nearly every measure, and investors shrug. The reason sits inside a single number: 15 cents.

That's how much of the quarter's profit came from a one-time tariff refund, not from selling more stuff^[1]. Strip it out, and Costco still beat forecasts, earning $6.60 a share against a roughly $6.52 consensus^[1][3]. But some analysts, using a different comparison, say the "real" beat shrank to just 7 cents^[13]. Which number is the true one depends on which forecast you're comparing against — and that ambiguity is part of why the market reaction was so muted.

Where the Money Actually Came From

The refund traces back to a Supreme Court ruling from February 20, 2026, which found that tariffs President Trump imposed under a 1977 emergency-powers law, called IEEPA, were unlawful^[9][10]. Once that ruling stood, companies that had been paying those tariffs became eligible to get some of that money back.

Here's the mechanism that matters: a tariff is paid to U.S. Customs by whoever is legally the "importer of record" — the company that brings the goods into the country^[9]. When a court strikes the tariff down, the refund goes to that importer. In Costco's case, that's Costco.

But the tariff's cost likely didn't stay with Costco the first time around. It probably got passed on to shoppers already, folded into higher prices spread across thousands of items^[9][10]. So the refund goes to the importer by law, even though the person who arguably felt the original cost was the customer at checkout. That gap between who paid and who gets paid back is the entire dispute driving a lawsuit now working through federal court in Illinois.

Costco got $184 million in refunds this quarter — $174 million in refunded tariffs plus $10 million in interest^[5][8]. The company says that's a bit more than a third of what it expects to eventually collect^[5][8]. In other words, more one-time gains like this one are probably still coming.

The Fight Over Who the Money Belongs To

Costco's answer to "what did you do with the refund" is that it lowered prices. CEO Ron Vachris said the company used the money to cut prices in the back half of the quarter on produce, meat, beverages, home furnishings and hardware^[5]. That fits how Costco has always described its business: thin markups, low prices, and profit built mainly from membership fees, which brought in $1.85 billion in the quarter alone^[1][4]. Cutting prices with refund money isn't a departure from that model — it's the model working as advertised, and it also gives members a reason to keep renewing.

A proposed class action filed in Illinois federal court sees it differently. The plaintiffs argue that shoppers already paid for those tariffs through higher shelf prices, so a government refund plus unchanged past prices amounts to what their filing calls a "double recovery" for Costco^[9][10]. Lower prices going forward, they say, help only future shoppers — an "indeterminate group," in the lawsuit's words — not the specific people who already overpaid^[10]. Costco has asked the court to dismiss the case, and that motion was still pending as of the reporting here^[9][11].

Both sides have a real claim. Costco followed the law: the refund is legally its money, and passing savings forward through prices is exactly what its membership pitch promises. The plaintiffs have a real grievance too: if you paid more for groceries because of a tariff, a discount on next month's chicken doesn't put that money back in your pocket. The case hasn't been decided, and it's still at the motion-to-dismiss stage — a long way from any ruling on the merits^[11].

The Number Investors Actually Watch

Market-focused outlets zeroed in on a different figure: comparable sales, which measure how much revenue came from stores open at least a year. Costco's headline comparable-sales growth was 9.4%^[3]. But strip out swings in gas prices and currency exchange rates, and that number drops to 6.7%^[3].

Here's why that adjustment matters. Costco sells a lot of gasoline, and when pump prices rise, its sales figures rise too — even if the same number of people are shopping there. Currency swings do something similar for stores overseas: a weaker or stronger dollar can make foreign sales look bigger or smaller without any real change in business. Investors treat the adjusted 6.7% figure as the truer read on growth, and CFO Gary Millerchip noted that number has held steady in a 6%-7% range for about a year^[6]. Steady is fine, but at a stock that already trades at a premium, "in line with trend" doesn't move the needle much either way^[6][12].

Some analysts also flagged that membership fee growth, up 7.3% to $1.85 billion, has slowed for three straight quarters^[4][12]. Costco points out that renewal rates in the U.S. and Canada held at 92.3%, a sign the underlying relationship with members hasn't frayed^[4][5].

A Press Release, a Retweet, and a Wrong Number

Coverage of the earnings themselves was thin outside financial media. No major U.S. general-news outlet appears to have run an original earnings story; most coverage outside the financial press instead centered on the Illinois lawsuit, filed months earlier^[9][10]. The Chicago Sun-Times led with the plaintiffs' framing, running a headline saying Costco shoppers "deserve" a cut of the refund^[9]. Fox Business had covered the same lawsuit earlier, in more procedural terms, focused on the legal claim and Costco's pricing pledge^[10].

Financial outlets took the opposite tack, treating the tariff refund as the headline event rather than a footnote. Bloomberg's headline read "Costco Posts Strong Quarterly Profit on Tariff Refunds" — accurate that the refund helped, though it arguably overstates how much of a $6.75 result came from 15 cents of one-time gain^[7]. One aggregator, Taiwan-based BigGo Finance, ran a headline claiming net income "jumps 12.3% to $2.61B" — but $2.61 billion was last year's net income, not this year's. Costco's actual figure, $2.998 billion, was about 15% higher^[14].

What's Still Open

Roughly two-thirds of the tariff refunds Costco expects haven't arrived yet, so more one-time bumps — or more price cuts — are likely in upcoming quarters^[5][8]. The company is also pressing ahead on growth apart from any of this, planning 33 new warehouse openings in fiscal 2027, including five relocations, for a net addition of 28 stores^[5]. That's up from 25 net new locations the prior year.

The bigger open question won't be answered in an earnings release. It sits with a federal judge in Illinois, who hasn't yet ruled on whether the shoppers who arguably paid for a tariff have any legal claim to a refund that the law says belongs to the retailer^[9][11].