Costco Posts 9.5% Revenue Growth, Plans Potential $20 Special Dividend
COST•Costco’s fiscal 35-week revenue rose 9.5% to $197.18B, with digital sales up 21.6% and March net sales climbing 11.3% to $28.41B. Membership fees jumped 13.6% to $1.355B, driving 74.3% executive membership mix, while net margin expanded from 2.56% to 2.94% between 2021-2025.
1. Operational Performance
Costco's revenue rose 9.5% to $197.18 billion through 35 weeks of FY2026, with March net sales up 11.3% to $28.41 billion and digital sales surging 21.6%. Gross margin remained stable at 12.84% from 2021, while operating margin expanded to 3.77% and net margin to 2.94%.
2. Membership Fee Momentum
Membership fees reached $1.355 billion in Q2 FY2026, up 13.6%, powered by last September's fee increase and executive upgrades representing 74.3% of total sales. Worldwide paid memberships hit 82.1 million with a U.S./Canada renewal rate of 92.1%, down gently from 92.8% in Q1 FY2025.
3. Special Dividend Outlook
With approximately $16.22 billion in cash and equivalents and an estimated net surplus of $13 billion after long-term debt and capital expenditures, Costco could fund a special dividend of about $20 per share in late 2026. This would represent a 34% increase over the $6.7 billion distributed in January 2024.
4. Valuation Metrics
At $1,000 per share Costco trades at roughly 46x forward earnings and 32x trailing EV/EBITDA, with a free cash flow yield of 2.1% and a PEG ratio of 4.82. These multiples suggest the market is pricing in sustained double-digit EPS growth and low risk to the business model.
