Costco Plans $7.5 Billion in 2027 Spending, 33 Warehouse Openings

Key Facts

Costco plans about $7.5 billion in capital expenditure in fiscal 2027 and aims to open 33 warehouses during the year. Five of those openings are relocations, so the plan would add 28 locations on a net basis if completed as announced. The higher budget follows roughly $6.4 billion of capital spending in fiscal 2026. Management tied the increase to a larger warehouse development pipeline and continued supply-chain investment. For holders of COST, the pace and quality of execution matter as much as the size of the spending commitment.

Additions to property and equipment totaled $6.435 billion in the fiscal year ended August 30, 2026, versus $5.498 billion a year earlier. Operating activities generated $15.825 billion of cash, compared with $13.335 billion in the prior year. Cash and equivalents stood at $20.207 billion at the fiscal year-end. The comparison shows investment rising alongside cash generated by the existing business. Capital spending nevertheless uses cash before new warehouses make their full contribution to sales and profit, making opening dates and subsequent performance central to the plan's economics.

Costco operated 939 warehouses worldwide at the end of fiscal 2026. Its earnings supplement estimates 967 at the end of fiscal 2027, a net increase of 28. Gross openings and growth in the network are different measures because a relocated warehouse requires investment without adding another site to the count. A relocation may improve a site's capacity or fit with its market, while an entirely new location can extend the reach of memberships and sales. Investors therefore need to assess network growth and returns from new sites, not the number of opening events alone.

Management's fiscal 2027 plan includes 4 openings in Europe, 5 in Canada and 1 in Mexico. Costco is also working toward a longer-run pace of about 30 net openings a year. The geographic mix matters because the time required to build a stable sales base can vary with the market and the nearby pool of members. It also shows that the program extends beyond the company's domestic network. Comparing completed openings with net additions will give a clearer account of progress than measuring the gross target in isolation.

The investment case rests on Costco's membership model, low prices, high sales volume and rapid inventory turnover. A new warehouse requires spending upfront, followed by enough members and repeat purchases to cover its costs and earn a return. Supply-chain investment can serve a larger network and support warehouse and digital sales as usage grows. More space does not automatically produce a matching increase in profit; the outcome depends on how efficiently that space is used. Membership growth and sales at established locations therefore provide essential checks on the value of expansion.

Fiscal fourth-quarter net sales provide a demand baseline: they reached $93.873 billion in the 16 weeks ended August 30, 2026. That compares with $84.432 billion in the corresponding period a year earlier, an increase of 11.2%. The increase includes contributions from a larger network as well as established locations, so it cannot by itself measure future returns on new spending. Growing sales at both new and existing sites would make the higher investment easier to absorb. Slower demand at established sites would place more of that burden on the openings.

Membership-fee revenue rose to $1.850 billion in the fourth quarter from $1.724 billion a year earlier. Costco had 84.1 million paid members, up 3.8% from the prior year. Renewal rates stood at 92.3% in the United States and Canada and 89.8% worldwide. These measures matter to expansion because a new warehouse needs to turn wider geographic reach into continuing memberships, not just an initial burst of sales. Renewals support recurring fee revenue, while members' spending determines how much operating return the additional space can produce.

Comparable sales rose 9.4% in the fourth quarter, or 6.7% excluding gasoline-price and currency effects. The regional increases were 10.7% in the United States, 5.0% in Canada and 7.0% in other international markets. Digitally enabled comparable sales increased 19.5%. The difference between reported and adjusted comparable sales shows why underlying demand deserves attention apart from fuel and exchange-rate movements. Digital growth also makes supply-chain capacity relevant to the spending plan, because that capacity supports sales beyond the traditional warehouse visit.

Diluted earnings reached $6.75 a share in the fourth quarter, compared with $5.87 a year earlier. The latest figure included a nonrecurring $0.15-a-share benefit from tariff refunds after partial reinvestment in member value. Excluding that benefit leaves $6.60 a share, a more useful base for judging the recurring business's capacity to support investment. Reported gross margin narrowed to 11.02% from 11.13% a year earlier. Separating recurring performance from temporary items is important when assessing whether higher spending can produce durable earnings growth.

COST closed at $896.48 on September 24, 2026, according to EL7 data, after trading between $895.26 and $909.43 during the session. It had closed at $904.70 on September 23, putting the spending announcement alongside a decline in the subsequent session. A single day's move cannot isolate the effect of spending guidance from the earnings report or broader market conditions. For shareholders, the question is whether net additions and membership growth will earn an adequate return on the cash invested. Investors taking either side of the stock can track fiscal 2027 execution alongside sales at existing locations.

During fiscal 2027, actual warehouse openings and capital outlays will be the direct tests of management's plan. Reaching the targeted net addition while maintaining comparable-sales and membership-fee growth would support the case that a larger network is finding demand. Delayed openings or weaker underlying sales would extend the time needed to recover the investment. Investors can also watch whether supply-chain spending accommodates digital and warehouse growth without eroding returns. Those measures connect the capital budget to observable operating results rather than treating the budget itself as a result.