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Costco reported strong fourth-quarter results, exceeding Wall Street forecasts for both earnings and revenue, as the warehouse giant continued to attract new members and expand its digital presence. The retailer’s growth was fueled by double-digit gains in membership fees and e-commerce, reflecting the company’s successful strategy to appeal to younger shoppers and enhance convenience.

Financial Highlights

For the fiscal fourth quarter, Costco posted net income of $2.61 billion, or $5.87 per share, up from $2.35 billion, or $5.29 per share, a year earlier. Revenue rose to $86.16 billion, surpassing analysts’ expectations of $86.06 billion, up from $79.7 billion in the prior-year period.

Same-store sales increased 6.4%, excluding gas price and foreign exchange effects, marking the second consecutive quarter of modest deceleration in this metric. Meanwhile, e-commerce sales climbed 13.5% year over year, excluding gas and currency impacts, contributing to a total of $19.6 billion in online sales for the full year, representing slightly over 7% of net sales.

Membership Growth

Costco’s membership fee income rose approximately 14% in the quarter, driven by higher membership numbers, upgrades to Executive-level memberships, and the annual fee increase implemented last fall — the first since 2017. Regular memberships now cost $5 more per year, and premium memberships increased by $10 annually. CFO Gary Millerchip noted that the fee hike contributed to nearly half of the membership income growth this quarter.

Younger consumers are increasingly drawn to Costco’s offerings, with nearly half of new annual sign-ups coming from members under 40, according to the company. This demographic shift reflects Costco’s focus on convenience, digital access, and a broad merchandise selection.

E-Commerce and Digital Innovation

Costco continues to enhance its digital capabilities, introducing faster checkout technology, improved search functions on its website and app, and virtual waiting rooms for high-demand items such as collectible products during peak traffic. These changes are part of a broader effort to increase online engagement and complement its physical stores.

Merchandise Strategy and Inflation Management

CFO Gary Millerchip highlighted that Costco has strategically adjusted its merchandise mix to mitigate tariff pressures. About one-third of U.S. sales come from imported goods, and the company has leaned into Kirkland Signature alternatives, more U.S.-made items, and categories less affected by tariffs, such as health and beauty products.

Inflation for food remained in the low- to mid-single-digit range, while non-food items, primarily imported goods, saw inflation return for the second consecutive quarter.

Store Expansion and Traffic

Costco opened 27 new warehouses, including three relocations, in the quarter and plans to open another 35 locations in the upcoming fiscal year. Global traffic to stores and the website rose 3.7%, while average transaction size increased 2.6%, excluding gas and currency effects.

Fresh food sales, including perishable items, saw high-single-digit growth, led by double-digit gains in meat, while non-food items like jewelry, gift cards, toys, and men’s apparel also posted double-digit increases. Gold bars contributed less to growth as the retailer compares to the prior-year launch period.

Long-Term Performance

Costco’s shares have increased about 180% over the past five years, although the stock has slightly lagged the broader market this year, rising just over 2% compared to the S&P 500’s 12% gain.

With a combination of digital innovation, membership growth, and merchandise strategy, Costco is positioning itself for continued resilience in the competitive retail landscape while maintaining strong connections with both younger and established shoppers.