After Costco released its latest financial report, the stock price fell. The company's sales in the fourth fiscal quarter increased by 11% year-on-year, and both annual sales and earnings per share also continued to grow. However, membership fee revenue was below market expectations for the third consecutive quarter. Coupled with the fact that the special dividends that investors were looking forward to did not materialize, this became a focal point of market concern.

Full-year performance continues to grow.

The company disclosed that in its latest financial report for the fourth quarter of the fiscal year, Costco achieved a year-on-year increase in sales of 10.1%, reaching $297.2 billion. The annual earnings per share were $20.76, a year-on-year increase of 14%. Earnings per share exceeded analysts' expectations of $20.50, but annual revenue fell short of market expectations of $302.3 billion.

• Annual sales amounted to 297.2 billion US dollars.
• Annual earnings per share are $20.76.
• Fourth-quarter sales increased by 11% year-on-year.

Member fees have fallen short of expectations for three consecutive quarters.

Management mentioned in the financial report that the company is still facing economic pressures. As a result, membership fees were once again lower than Wall Street's forecasts. In the latest quarter, membership fee revenue increased by 7.3% year-over-year to reach $1.5 billion, but this was below the market expectation of $1.8 billion. This is already the third consecutive quarter that this indicator has fallen short of expectations.

On an annual basis, the membership fee revenue of Costco amounted to 5.9 billion US dollars, which is higher than the previous year's 5.32 billion US dollars, representing a year-on-year increase of 10.9%. Although there was growth throughout the year, the quarterly performance was weaker, which dampened market expectations for the high-profit membership business.

Special dividends have not been announced yet.

Another point that disappointed investors is that the company did not announce any special dividends this time. Costco has, for a long time, in addition to regular quarterly dividends, also distributed one-time special dividends from time to time, so this arrangement has always been a topic of market attention.

Currently, Costco pays a regular quarterly dividend of $1.48 per share. Following past trends, the company would typically issue a special dividend about every two years. However, as of now, Costco has not issued a new special dividend for nearly three years, breaking this previous dividend pattern.

Past records show that Costco distributed a special dividend of $5 per share in 2015, $7 per share in 2017, increased to $10 per share in 2020, and further raised it to $15 per share in 2023. Reports mention that, against the backdrop of the company having approximately $20 billion in cash reserves, which is at a historical high, the market generally expected a new round of special dividends.

Additional information:This financial report shows that Costco's sales and profits are still growing, but the membership fee business did not meet expectations, and the absence of special dividends have become the main reasons for the market to be more cautious about its profitability and cash returns.