Costco Wholesale Corporation

Strong quarterly + full-year momentum (with tariff impact mostly “given back” to members) - Q4 FY26 (16 weeks ended Aug 30): Net income $2.998B ($6.75/diluted), up 12.3% excluding a nonrecurring $0.15/diluted benefit from IEEPA tariff refunds. - Net sales: $93.87B, up 11.2% YoY; comps +9.4% (and +6.7% excluding gas price inflation + FX). Excluding gas entirely (and adjusting for FX): comps +6.7%. - Traffic + “basket” strength: Traffic/frequency +3.3% worldwide; ticket +5.9% worldwide (and +3.3% excluding gas/FX). - Surprising/important: Management emphasized that excluding gas, underlying comps remain robust; nonfood strength and ancillary growth offset volatility in gas and supply chain inputs.

Tariff refunds: material, nonrecurring, and reinvested—creating near-term earnings noise - Q4 tariff refunds received: $184M total ($174M refunds + $10M interest), about 1/3 of total expected. - Reinvestment strategy: Company says it reinvested most of the received dollars via price reductions across everyday produce, meat, beverages, and some nonfoods (home furnishings/hardware) in the second half of the quarter. - Outlook: They expect similar refunds already received in Q1 FY27 and plan to keep reinvesting “most” of future amounts. - Investor risk to track: Tariff refunds and reinvestments are nonrecurring and will continue to affect FY27 quarterly earnings comparability (company plans to disclose the net impact each quarter).

Membership: executive penetration and renewals improving; total membership growth slowing is a watch item - Paid members: 84.1M total paid (+3.8% YoY); 150.4M cardholders (+3.6% YoY). - Executive members: 42.3M (+9.4% YoY)—record high executive penetration (management views this as a key quality/loyalty driver). - Renewal rates: U.S./Canada 92.3% (+10 bps QoQ), Worldwide 89.8% (+10 bps). - What management said about the “spread” concern: They believe narrowing growth vs. spend is partly normalization and that renewals + younger/digital-driven cohorts should stabilize over time. - Good: Higher executive mix generally supports higher spend per member and higher renewal rates.