Key Stats for $COST Stock
- Price Change for $COST stock: 3%
- Current Share Price: $943
- 52-Week High: $1,078
- $COST Stock Price Target: $1,060
What Happened?
Costco (COST) stock climbed 3% yesterday after the warehouse club reported September sales that crushed Wall Street expectations.
The retailer posted net sales of $26.58 billion for the five-week period ending October 5, up 8% from $24.62 billion last year. Total comparable sales grew 5.7%, ahead of the 4.6% analysts expected.
U.S. comparable sales excluding gas prices and foreign exchange rose 5%, beating estimates of 4.2%. International markets performed even stronger, with Canada up 9.3% and other international locations growing 7.5%.
Digital sales continue firing on all cylinders, jumping 26.1% for the month. Costco changed how it reports these numbers starting with this release.
The company now calls it “digitally-enabled” sales, which includes all purchases initiated through a digital device whether fulfilled by a warehouse, distribution center, or through Costco Travel.
Traffic to stores and Costco’s website rose 2.1% globally during September and 1.4% in the U.S. Average transaction size climbed 3.5% worldwide, or 3.8% excluding gas price changes and currency fluctuations.
The company noted that last year’s September numbers got a boost from Hurricane Helene and port strikes that drove abnormal consumer activity. Those events added roughly 2% to U.S. sales and 1.5% worldwide last year. So this year’s growth is even more impressive on an apples-to-apples basis.
By region, the strongest U.S. markets were the Northwest, Midwest, and Los Angeles. Internationally, Korea, Australia, China, and Taiwan led the way.
The Moon Festival and Chuseok holidays shifted timing this year and helped drive strong results in those Asian markets.
Looking at merchandise categories, nonfoods posted high single-digit comparable sales growth. Jewelry, major appliances, and health and beauty all performed well.
Fresh foods grew mid-to-high single digits with meat and bakery leading the way. Food and sundries were up mid-single digits with strength in candy, cooler items, and deli.
See analysts’ growth forecasts and price targets for Costco stock (It’s free!) >>>
What the Market Is Telling Us About Costco Stock
The pop in Costco stock shows investors are relieved the company continues executing despite macro uncertainty. The September results suggest consumers are still shopping at the warehouse club even as economic concerns linger.
The digital sales growth of 26% is impressive and validates Costco’s investments in improving the online shopping experience while adding features like virtual waiting rooms for high-demand items like Pokemon cards.
With roughly 30% of sales coming from outside the U.S., Costco has built a meaningful cushion against domestic economic volatility. The company’s global footprint now includes 914 warehouses across 14 countries.
Costco’s September comps follow fourth-quarter results that beat expectations despite ongoing tariff challenges.
CFO Gary Millerchip said on the recent earnings call that the company is working hard to offset higher tariff costs by introducing Kirkland Signature private-label alternatives, buying more U.S.-made products, and shifting to categories with less tariff exposure.
About a third of Costco’s U.S. sales come from imported goods, so tariffs matter. But the company has proven adept at navigating these challenges without sacrificing the value proposition that keeps members coming back.
Membership growth remains healthy with 81 million paid members at the end of the fiscal year, up 6.3% year over year. Executive memberships grew even faster at 9.3%, now representing 47.7% of paid members and 74.2% of worldwide sales.
The membership fee increase implemented last fall continues providing a tailwind. Membership fee income jumped 14% in the fourth quarter, with the fee increase accounting for less than half that growth. The rest came from new sign-ups and upgrades to executive membership.
However, Costco stock has underperformed the broader market recently, up just over 2% year-to-date compared to the S&P 500’s 12%+ gains. The September sales beat might help close that gap as investors gain confidence the business remains resilient heading into the critical holiday season.
For now, the strong September numbers validate Costco’s strategy of delivering consistent value to members while carefully managing costs and navigating external headwinds like tariffs. That formula keeps working.
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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!