Key Takeaways
- Costco declared a $30 per share special dividend worth about $13.3 billion, double its last special payout, plus a renewed $4 billion buyback through November 2030.
- The payout uses roughly two-thirds of the $20.2 billion in cash and equivalents Costco held at the end of fiscal 2026.
- October net sales rose 12.6%, but gas inflation flatters comparable sales, which rose 7.3% after stripping out gas and currency.
- Costco’s fiscal first-quarter report, expected in mid-December, will show whether membership fee growth is holding up after the December 4 payment.
Costco Wholesale (COST) just declared its largest special dividend ever. On November 10, the board approved $30 per share, payable December 4 to holders of record on November 24.
The total comes to about $13.3 billion. That is double the $15 special Costco declared in December 2023, which cost roughly $6.7 billion.
The board also renewed its $4 billion buyback through November 2030. Under the 2023 program it replaces, Costco had bought back $3.1 billion.
Management had hinted at a special dividend for months, so the size is the real story.
Two-thirds of the cash pile
The math starts with the balance sheet. Costco closed fiscal 2026 on August 30 with $20.2 billion in cash and equivalents, up from $14.2 billion a year earlier.
Here is what the board approved:
- $30 per share, about $13.3 billion in total
- A November 24 record date and a December 4 payment
- A fresh $4 billion repurchase authorization that runs to November 2030
That payout absorbs roughly two-thirds of the year-end cash. And the pile grew quickly…
Cash rose $6 billion in a single year, so the board had plenty of room. Meanwhile, the regular $1.47 quarterly dividend continues alongside the special.
TIKR tracks 40 analysts on Costco. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Costco, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Costco’s Analyst Ratings
Sales are refilling the drawer
The cash keeps coming because the warehouses keep getting busier. Fiscal 2026 net sales grew 10.1% to $297.2 billion, while membership fees rose to $5.91 billion from $5.32 billion.
Fourth-quarter EPS climbed to $6.75 from $5.87. That figure included a $0.15 one-time benefit from IEEPA tariff refunds, but the underlying gain was still solid.
The new fiscal year started even faster. October net sales jumped 12.6% to $24.50 billion, and sales for the first nine weeks rose 12.8%.
However, gas prices are doing part of that work. Total comparable sales rose 11.1% in October, yet only 7.3% after stripping out gas and currency. Digitally enabled sales grew 22.5%.
Profit has compounded steadily for years, and fiscal 2026 extended the run.
Net income reached $9.2 billion, up 13.9% from $8.1 billion. That growth lets Costco pay out cash while still adding warehouses, and it now runs 945 of them.
The premium behind the payout
Why choose a dividend over heavier buybacks? CFO Gary Millerchip said on the May earnings call that, at the current valuation, a special dividend is “typically the most effective way to return excess cash.”
In other words, management doesn’t seem eager to buy its own stock at this price. The old program took about three years to spend $3.1 billion, so this payout dwarfs it.
So where does the multiple sit against other big retailers?
Costco still trades at a steep premium to Walmart and BJ’s Wholesale on forward earnings, although it sits below its early 2025 peak.
That premium leaves little room for slippage. Fourth-quarter membership fees rose to $1.85 billion from $1.72 billion, slower than the 11.1% full-year pace. Tariff refunds also won’t repeat forever.
My take: The $30 payout shows a business generating more cash than its expansion plans can absorb. It also reads as a quiet signal that management views the stock as fully priced, and I’d take that hint seriously. I’d want fee growth to steady before paying today’s premium.
The next checkpoint is the fiscal first-quarter report, expected in mid-December. It will show whether fee growth stabilizes and how much gas is still propping up comparable sales.
So what is Costco stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Costco could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
