Costco Earnings Tonight: Will Tariffs and Thin Margins Crack the $930 Floor?

Costco Wholesale (COST) reports its fiscal fourth-quarter earnings tonight after the close, and expectations are running high for one of the most closely watched retailers in the market. The warehouse club giant, long beloved by investors as a defensive and consistent compounder, faces a tricky setup this quarter. While Costco continues to demonstrate strength in traffic, comps, and membership trends, the stock has weakened in recent months, falling from its June all-time high near $1,067 to the mid-$930s. The decline has created a descending triangle technical setup, one that historically has preceded downside breaks when earnings disappoint. Against that backdrop, the market will be watching not just reported sales—which are already largely known given Costco’s monthly disclosures—but also margin trends, tariff impacts, and management’s forward commentary.

From a consensus standpoint, Wall Street expects fourth-quarter EPS of about $5.81, with Oppenheimer modeling slightly below at $5.70 due to incremental expense headwinds tied to longer executive member store hours.

Costco’s monthly sales disclosures provide a clear roadmap to the reported numbers. For June, net sales rose 8% year-over-year to $26.44 billion. July followed with $20.89 billion, up 8.5% from last year. August capped the quarter with $21.56 billion, an 8.7% increase. Comparable sales were strong: U.S. comps rose 6.1% in August, Canada gained 6.8%, International climbed 6.7%, and e-commerce surged 18.4%. These figures suggest top-line consistency, with acceleration in traffic and ticket growth late in the quarter. However, total traffic growth has moderated to low single digits compared to earlier in the year, meaning

Last quarter’s performance sets the context. In

Investors should focus on margins and tariff commentary as the true earnings drivers. OpCo has highlighted initial headwinds from extended hours and wage investments, while management last quarter warned of a potential $40–50 million LIFO charge if inflation trends persist. Tariff exposure could also weigh on non-foods categories, where Costco faces tough year-over-year comparisons. CEO Ron Vachris has previously described proactive inventory pull-forward to mitigate tariff impacts, but investors will want to hear if this strategy remains effective heading into the holiday season. UBS believes productivity gains and merchandising discipline can offset these headwinds over time, but near-term pressure is difficult to ignore.

Technicals add another layer to tonight’s event. Shares bounced from $930 in July to nearly $997 but failed to break the $1,000 threshold. The stock has since resumed a downward drift, forming a descending triangle with $930 as critical support. Given Costco’s tendency to “preannounce” revenue through monthly sales, a miss or cautious margin outlook could be the catalyst for a break lower. Conversely, any positive surprise on profitability or upbeat commentary on tariffs could stabilize sentiment and reignite the bull case.

Longer-term, Costco continues to expand its footprint globally, with management guiding to 27 new warehouses in fiscal 2025. Kirkland Signature growth, enhanced gas station operations, and digital initiatives remain strategic pillars. For investors, the bull case hinges less on quarterly fluctuations and more on Costco’s consistent execution, high renewal rates, and ability to leverage scale against suppliers and tariffs. But in the near term, the Q4 print is shaping up as a test of just how much cushion the stock’s premium multiple affords in a more volatile macro environment.

Bottom line: Tonight’s Costco report will likely hinge on gross margin performance and tariff commentary rather than revenue. If management signals pressure on profitability or rising expense burdens, shares could retest and possibly break below the $930 support. If, however, they can reassure the market on margins and emphasize long-term levers like productivity, sourcing agility, and digital growth, Costco could reassert its status as a defensive market favorite despite near-term bumps.