Meet the 6 Categories That Drove Costco’s 19.5% Digitally Enabled Sales Comps in Its Latest Quarter.

After-hours trading was lively in Costco Wholesale (NASDAQ:COST) following Thursday's market close. The company released its fourth-quarter and full-year results for fiscal 2026, and investors transacting in the retailer's stock seemed evenly split between bears and bulls. The shares were essentially trading sideways late that evening.

Frame No. 4 was a good one for Costco. An area where its performance really stood out was digital sales. Let's evaluate the quarter generally, and then explore what made digital such a star during the period.

Image source: Getty Images.

Double-digit improvements

In the quarter, Costco earned $95.7 billion in revenue, up a meaty 11% year over year. This comprised net sales of almost $93.9 billion (also up 11%) and membership fees paid by its shoppers totaling nearly $1.9 billion. The latter figure grew by 7%, which is notably lower than in recent quarters.

Total comparable sales rose by 6.7% when excluding the impact of volatile gasoline prices and foreign exchange. Breaking this down by region, adjusted "comps" at the company's U.S. warehouses grew by 7.2%, those in Canada advanced 4.6%, and the "other international" stores sat between the two with growth of 6.2%.

Net income under generally accepted accounting principles (GAAP) also headed north. It rose by nearly 15% to just under $3 billion, or $6.75 per share.

Like a raft of other U.S. businesses, however, the company benefited from tariff refunds received in the quarter (per a Supreme Court decision, the Trump administration had to compensate companies like Costco that paid the aggressive tariffs the president imposed last year). The refunds, net of management's reinvestment into its business, amounted to $0.15 per share. Stripping out the $0.15 from the full $6.75 earnings per share (EPS) figure and comparing it to last year's number results in a more organic growth rate of 12%.

Regardless, both headline metrics beat the consensus analyst estimates. Costco-following prognosticators were collectively modeling just under $94.9 billion on the top line, and EPS of $6.55.

The power of digital

Circling back to comparable sales, Costco's figure for its digital commerce surged 19.5% higher, which rises to 19.8% when adjusted for foreign exchange (but not for gasoline, as of course that isn't sold online). Without digital, those overall company comps would have been notably less impressive.

The retailer is something of an outlier in its industry, as it remains very focused on its brick-and-mortar stores. Yet even with that strong shop-in-person culture, its members are whipping out their phones and firing up their browsers to get Costco products shipped to their doors.

Somewhat frustratingly, management doesn't provide exact dollar amounts for digital sales. What it does present is information on where that commerce is directed, and that's enlightening. So in the order presented by the company, these are the top six digital sales categories:

• Pharmacy
• Home furnishings
• Small electronics
• Hardware
• Housewares
• Domestics (home textiles, bedding, curtains, towels, etc.)

Basically, what I think we're seeing here is a dividing of the Costco shopping experience, with members treating in-person as basically a grocery store or supermarket visit (we do like to test the avocados and see how the ground beef looks, after all). Digital, meanwhile, is reserved for larger items that might be harder to haul out of the warehouses, or more occasional purchases like medicines, electronics, or sets of towels.

Lofty expectations

It seems that investors were hoping for a more blowout quarter from Costco. After all, it routinely produces fundamental growth rates that are high by retail industry standards and often beats analyst projections. To a degree, the company's elevated share price and comparably high valuations justify this expectation.

Personally, I'd be more bullish on Costco's future, particularly given how well it performed in the digital space. Keep in mind that this is a company that, unusually for its industry, hardly toots its horn at all about online commerce. Even with that near-complete absence of hype, members are logging in and doing some of their shopping online. I can see that being a long-term driver of growth as the proportion of younger, digital-native shoppers grows within the membership ranks.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.