Costco’s latest results show strong sales growth, but two details deserve attention before readers turn the headline into a view of the underlying business: the effect of gasoline prices and currency on comparable sales, and a tariff-related benefit in earnings.
The warehouse retailer reported fourth-quarter net sales of $93.9 billion, up 11.2%, in its September 24 earnings release. The quarter covered 16 weeks ending August 30; the full fiscal year covered 52 weeks. Annual net sales reached $297.2 billion, an increase of 10.1%.
Companywide comparable sales rose 9.4%, or 6.7% after excluding gasoline-price and foreign-exchange effects. Net income was $2.998 billion, equivalent to $6.75 per diluted share, against $2.610 billion and $5.87 a year earlier. A nonrecurring IEEPA tariff refund, partly reinvested in member value, added a net 15 cents per share.
Start with comparable periods and comparable measures
A 16-week fourth quarter should not be casually compared with a retailer’s 13-week quarter using revenue dollars alone. The calendar belongs beside the sales figure whenever results are lined up across companies. The year-on-year comparison within Costco’s own release is the more direct starting point.
The difference between reported and adjusted comparable-sales growth provides a second check. Removing fuel-price and currency effects helps readers examine the comparison on a different basis. It does not mean the adjusted figure captures every possible influence on demand, or that all remaining growth came from more shopping trips.
A useful reading order is total sales first, comparable sales second, then the adjustments and business explanations. That avoids building a conclusion around whichever percentage happens to look most striking. Each measure describes a different part of the same quarter.
Separate a refund from recurring earning power
The tariff refund is another reason to read beyond the earnings-per-share headline. A benefit identified as nonrecurring should be considered separately when thinking about what might repeat in future periods. It should not be treated as evidence that the entire improvement in profit came from that one item.
For a straightforward comparison, keep reported earnings intact and note the disclosed benefit alongside them. That is clearer than silently replacing the reported number with an improvised adjusted measure. Any further adjustment needs its own explanation and consistent treatment of the prior period.
For background on the retailer’s own-label business, our earlier Kirkland Signature feature examines the brand’s development. That history is separate from what this quarter’s financial statements establish.
The questions for the next report
The next useful checks are whether comparable-sales growth continues on the same adjusted basis and how earnings develop without assuming the same refund benefit recurs. Changes in those measures will offer a cleaner comparison than carrying one quarter’s headline rate forward mechanically.
For suppliers and competitors, the release is also a reminder to distinguish sales scale from the reasons sales changed. For investors, it is a set of operating results to examine alongside other information, rather than a prediction of how Costco’s shares should trade.
Illustrative supermarket shopping; not an identified Costco location or Costco members. Photo: Greta Hoffman / Pexels.