Costco Wholesale Corp. (NASDAQ: COST) delivered robust earnings in its fourth quarter, demonstrating resilient market share gains and double-digit earnings growth despite macroeconomic uncertainties.
Telsey Advisory Group analysts, led by Joseph Feldman, reiterated their Outperform rating on Costco with a $1,100 price forecast, following the company’s stronger-than-expected fiscal fourth-quarter results.
The analysts highlighted that the adjusted EPS of $5.87 surpassed both their estimate of $5.84 and the FactSet consensus of $5.80, driven by 8.1% sales growth to $86.2 billion and a six-basis-point expansion of the operating margin to 3.9%.
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Feldman and team pointed to robust core comparable store sales of 6.4%, with strength across the U.S., Canada, and international markets, and noted that expanded club hours for Executive members have boosted U.S. sales by roughly 100 bps since late June.
Regarding membership trends, the analysts acknowledged that fee income increased 14% to $1.7 billion. However, renewal rates softened by 40 basis points to 89.8% globally and 92.3% in the U.S. and Canada. .
They attributed this decline to lower online renewals and lapping of a digital promotion, adding that renewal rates could face further pressure in the near term.
Looking forward, the brokerage expects Costco to remain a profitable share gainer, supported by planned club expansion of more than 30 net openings in fiscal year 2026, continued strength in Kirkland Signature products, sharp pricing, and data-driven digital enhancements.
Analysts noted that, while the tariff environment remains fluid, Costco has effectively managed the impact through its global sourcing capabilities and strong vendor relationships.
They said that the company has proactively consolidated its purchasing efforts, relocated production facilities, and adjusted its assortment.
The brokerage raised its fiscal 2026 EPS forecast to $20.12 from $20.09 and now projects fiscal 2027 EPS of $22.14, citing margin leverage and steady comparable store sales growth.
In another research note, Bank of America’s Robert F. Ohmes reiterated a Buy rating on Costco, with a price forecast of $1,095 based on 52 times its fiscal 2027 EPS estimate of $21.
Bank of America projects fiscal 2026 EPS of $19.70, supported by fee increases and 30 planned warehouse openings. In the longer term, EPS is expected to reach $22.15 by fiscal year 2028.
Price Action: COST shares were trading lower by 2.05% to $923.95 at last check Friday.
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