Costco Wholesale (COST)
Market Price (3/5/2026): $1006.62 | Market Cap: $446.9 BilSector: Consumer Staples | Industry: Consumer Staples Merchandise Retail
Costco Wholesale (COST)
Market Price (3/5/2026): $1006.62Market Cap: $446.9 BilSector: Consumer StaplesIndustry: Consumer Staples Merchandise Retail
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
| Attractive cash flow generationCFO LTM is 15 Bil, FCF LTM is 9.0 Bil | Trading close to highsDist 52W High is -4.3% | Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 40x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 30x, P/EPrice/Earnings or Price/(Net Income) is 54x |
| Low stock price volatilityVol 12M is 22% | Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is -2.2% | |
| Megatrend and thematic driversMegatrends include E-commerce & Digital Retail, Experience Economy & Premiumization, Automation & Robotics, Health & Wellness Trends, Show more. | Key risksCOST key risks include [1] a heavy dependence on membership fee income for profitability and [2] global supply chain disruptions that threaten its low-price value proposition. |
| Attractive cash flow generationCFO LTM is 15 Bil, FCF LTM is 9.0 Bil |
| Low stock price volatilityVol 12M is 22% |
| Megatrend and thematic driversMegatrends include E-commerce & Digital Retail, Experience Economy & Premiumization, Automation & Robotics, Health & Wellness Trends, Show more. |
| Trading close to highsDist 52W High is -4.3% |
| Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 40x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 30x, P/EPrice/Earnings or Price/(Net Income) is 54x |
| Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is -2.2% |
| Key risksCOST key risks include [1] a heavy dependence on membership fee income for profitability and [2] global supply chain disruptions that threaten its low-price value proposition. |
Qualitative Assessment
AI Analysis | Feedback
1. Costco reported exceptional first-quarter fiscal 2026 earnings and robust comparable sales growth.
The company announced its Q1 fiscal 2026 results on December 11, 2025, revealing net sales growth of 8.2% to $65.98 billion for the twelve weeks ended November 23, 2025. Diluted earnings per share (EPS) reached $4.50, surpassing analyst estimates of $4.28 by 5.2%. This strong performance was driven by a 6.4% increase in company-wide comparable sales and a significant 20.5% surge in digitally-enabled sales.
2. The company demonstrated sustained strong monthly sales performance, particularly in digital channels, despite broader retail stagnation.
Costco continued its positive momentum with strong monthly sales figures throughout the period. In December 2025, net sales rose 8.5% to $29.86 billion, with comparable sales increasing 7.0% and digital sales growing 18.9%. This trend continued into January 2026, with net sales climbing 9.3% to $21.33 billion and digitally-enabled sales jumping 34.4%. This occurred while overall U.S. retail sales in December 2025 were flat, defying economists' predictions for growth, indicating Costco's resilience in a challenging retail environment.
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Stock Movement Drivers
Fundamental Drivers
The 10.3% change in COST stock from 11/30/2025 to 3/4/2026 was primarily driven by a 7.6% change in the company's P/E Multiple.| (LTM values as of) | 11302025 | 3042026 | Change |
|---|---|---|---|
| Stock Price ($) | 912.34 | 1006.74 | 10.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 275,235 | 280,391 | 1.9% |
| Net Income Margin (%) | 2.9% | 3.0% | 0.6% |
| P/E Multiple | 50.0 | 53.8 | 7.6% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | 10.3% |
Market Drivers
11/30/2025 to 3/4/2026| Return | Correlation | |
|---|---|---|
| COST | 10.3% | |
| Market (SPY) | 0.3% | 4.1% |
| Sector (XLP) | 9.8% | 48.7% |
Fundamental Drivers
The 7.0% change in COST stock from 8/31/2025 to 3/4/2026 was primarily driven by a 4.3% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 8312025 | 3042026 | Change |
|---|---|---|---|
| Stock Price ($) | 940.70 | 1006.74 | 7.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 268,776 | 280,391 | 4.3% |
| Net Income Margin (%) | 2.9% | 3.0% | 1.5% |
| P/E Multiple | 53.2 | 53.8 | 1.1% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | 7.0% |
Market Drivers
8/31/2025 to 3/4/2026| Return | Correlation | |
|---|---|---|
| COST | 7.0% | |
| Market (SPY) | 6.5% | 2.6% |
| Sector (XLP) | 8.6% | 48.0% |
Fundamental Drivers
The -3.5% change in COST stock from 2/28/2025 to 3/4/2026 was primarily driven by a -11.9% change in the company's P/E Multiple.| (LTM values as of) | 2282025 | 3042026 | Change |
|---|---|---|---|
| Stock Price ($) | 1042.89 | 1006.74 | -3.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 258,805 | 280,391 | 8.3% |
| Net Income Margin (%) | 2.9% | 3.0% | 1.1% |
| P/E Multiple | 61.1 | 53.8 | -11.9% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | -3.5% |
Market Drivers
2/28/2025 to 3/4/2026| Return | Correlation | |
|---|---|---|
| COST | -3.5% | |
| Market (SPY) | 16.3% | 39.4% |
| Sector (XLP) | 6.9% | 57.9% |
Fundamental Drivers
The 116.6% change in COST stock from 2/28/2023 to 3/4/2026 was primarily driven by a 53.5% change in the company's P/E Multiple.| (LTM values as of) | 2282023 | 3042026 | Change |
|---|---|---|---|
| Stock Price ($) | 464.88 | 1006.74 | 116.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 231,028 | 280,391 | 21.4% |
| Net Income Margin (%) | 2.5% | 3.0% | 16.3% |
| P/E Multiple | 35.1 | 53.8 | 53.5% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | 116.6% |
Market Drivers
2/28/2023 to 3/4/2026| Return | Correlation | |
|---|---|---|
| COST | 116.6% | |
| Market (SPY) | 79.3% | 44.0% |
| Sector (XLP) | 30.2% | 53.1% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| COST Return | 52% | -19% | 49% | 40% | -5% | 17% | 183% |
| Peers Return | 28% | -21% | 22% | 34% | 0% | 9% | 81% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -0% | 81% |
Monthly Win Rates [3] | |||||||
| COST Win Rate | 75% | 50% | 75% | 50% | 50% | 67% | |
| Peers Win Rate | 65% | 40% | 62% | 68% | 50% | 73% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 33% | |
Max Drawdowns [4] | |||||||
| COST Max Drawdown | -17% | -26% | -1% | -2% | -7% | -1% | |
| Peers Max Drawdown | -6% | -30% | -9% | -5% | -17% | -4% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -1% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: WMT, AMZN, TGT, HD, KR. See COST Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 3/4/2026 (YTD)
How Low Can It Go
| Event | COST | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -31.5% | -25.4% |
| % Gain to Breakeven | 46.0% | 34.1% |
| Time to Breakeven | 566 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -13.6% | -33.9% |
| % Gain to Breakeven | 15.8% | 51.3% |
| Time to Breakeven | 119 days | 148 days |
| 2018 Correction | ||
| % Loss | -22.2% | -19.8% |
| % Gain to Breakeven | 28.5% | 24.7% |
| Time to Breakeven | 101 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -48.5% | -56.8% |
| % Gain to Breakeven | 94.2% | 131.3% |
| Time to Breakeven | 701 days | 1,480 days |
Compare to WMT, AMZN, TGT, HD, KR
In The Past
Costco Wholesale's stock fell -31.5% during the 2022 Inflation Shock from a high on 4/7/2022. A -31.5% loss requires a 46.0% gain to breakeven.
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About Costco Wholesale (COST)
AI Analysis | Feedback
- Amazon Prime for discounted bulk goods in a giant physical store.
- A membership-only Walmart for bulk goods.
- Sam's Club for groceries and general merchandise.
AI Analysis | Feedback
- Groceries & Fresh Food: A vast selection of fresh produce, meats, dairy, baked goods, frozen foods, and pantry staples, often sold in bulk.
- Electronics: Televisions, computers, cameras, home theater systems, and other consumer electronic devices.
- Home Goods & Appliances: Furniture, small and large kitchen appliances, bedding, bath items, kitchenware, and outdoor living products.
- Apparel & Jewelry: Clothing, shoes, accessories, and fine jewelry including diamonds, watches, and precious metals.
- Health & Beauty Products: Over-the-counter medications, vitamins, supplements, personal care items, and cosmetics.
- Automotive & Tires: A selection of tires, car batteries, and automotive accessories.
- Memberships: Annual fees providing exclusive access to warehouse shopping, discounted fuel, and other member-only services.
- Gasoline Stations: Discounted fuel services available at many warehouse locations.
- Pharmacy Services: Dispensing of prescription medications, over-the-counter drugs, and health consultations.
- Optical Services: Eye exams, prescription eyeglasses, contact lenses, and sunglasses.
- Food Courts: Providing low-cost hot dogs, pizzas, beverages, and other snacks for members and their guests.
- Travel Services: Discounted vacation packages, cruises, rental cars, and hotels exclusively for members.
- Business & Other Services: Offerings like bottled water delivery, payment processing, and digital photo printing for businesses and members.
AI Analysis | Feedback
Costco Wholesale (symbol: COST) primarily sells directly to its members, which include both individual consumers and small businesses. It operates on a membership-based model, offering a wide array of products in bulk quantities at competitive prices.
Given that Costco sells primarily to individuals and small businesses rather than large corporate customers, its major customer categories can be described as follows:
-
Individual and Household Consumers: This is the largest segment of Costco's customer base, comprising individuals and families who purchase goods for their personal and household consumption. These members are attracted to Costco for its bulk savings, quality products, wide selection (including groceries, electronics, home goods, and apparel), and competitive pricing on everyday essentials and specialty items.
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Small Business Owners and Operators: This category includes entrepreneurs, small business owners, and managers who utilize their Costco membership to procure supplies, inventory, and equipment for their commercial operations. Costco caters to this segment with specific product assortments, larger pack sizes, and dedicated "Business Centers" in some locations, addressing needs for offices, restaurants, convenience stores, and other small enterprises.
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Ron Vachris
President and Chief Executive Officer
Ron Vachris became President and Chief Executive Officer of Costco Wholesale Corporation in January 2024, becoming only the third CEO in the company's history. He began his career with the Price Club, Costco's predecessor, in 1982 as a forklift driver while attending Glendale Community College to study business. Over his 40-year tenure with the company, he steadily advanced through various roles, including warehouse operations, merchandising, regional management, and real estate. Before becoming CEO, Vachris served as President and Chief Operating Officer from February 2022 to January 2024. His career demonstrates a pattern of internal advancement within the same organization.
Gary Millerchip
Executive Vice President and Chief Financial Officer
Gary Millerchip was appointed Executive Vice President and Chief Financial Officer of Costco, effective March 15, 2024. He brings extensive retail and finance experience to Costco, having served as Senior Vice President and Chief Financial Officer at The Kroger Co. since April 2019. Millerchip spent 15 years at The Kroger Co. and, prior to that, more than 20 years in banking, most recently with the NatWest Group (formerly Royal Bank of Scotland) in the U.K. He also served as Chief Executive Officer of Kroger Personal Finance starting in July 2010. He earned a Bachelor of Arts in Financial Services from Birmingham City University and a Master of Business Administration from the University of Warwick - Warwick Business School.
Claudine Adamo
Executive Vice President, COO - Merchandising
Claudine Adamo serves as the Executive Vice President, COO - Merchandising at Costco Wholesale Corporation. She began her career at Costco in 1982 in security at the Kirkland location, which involved greeting members at the door. Adamo worked her way through various roles, including regional office work, before becoming an Executive Vice President of merchandising, overseeing all merchandise sold by the organization.
Patrick J. Callans
Executive Vice President, Administration
Patrick J. Callans is the Executive Vice President of Administration at Costco Wholesale. He started at Costco Wholesale in an unspecified role.
Russell D. Miller
Executive Vice President, Chief Operating Officer
Russell D. Miller holds the position of Executive Vice President, Chief Operating Officer at Costco Wholesale Corporation.
AI Analysis | Feedback
The public company Costco Wholesale (COST) faces several key risks to its business model and financial performance.
- Intense Competition: Costco operates in a highly competitive retail environment, facing challenges from other warehouse clubs such as Sam's Club and BJ's Wholesale Club, as well as traditional supermarkets, big-box retailers, and rapidly expanding online retailers like Amazon and Walmart. This intense competition can lead to reduced market share, pricing pressure, and lower profitability for Costco.
- Dependence on Membership Income: A significant portion of Costco's profitability is derived from its membership fees, which are described as its "secret weapon" and a steady stream of revenue. The company's financial performance relies heavily on maintaining high membership renewal rates and continued membership growth. Risks include potential saturation in mature markets like the U.S. and Canada, challenges in international expansion, or a decline in renewal rates, which could significantly impact net income.
- Supply Chain Disruptions: Costco's business relies on an efficient global supply chain to maintain its low-price strategy and product availability. Disruptions to this supply chain, which have been highlighted by events like the COVID-19 pandemic, can lead to increased costs for merchandise, reduced availability of products, and negative impacts on Costco's ability to offer competitive prices and maintain profitability.
AI Analysis | Feedback
The accelerating penetration of e-commerce, particularly by Amazon (including Amazon Fresh and Whole Foods), into the grocery and bulk goods market. This competition challenges Costco's value proposition by offering comparable products at competitive prices with superior online convenience and delivery options, potentially eroding the distinct advantage of a physical warehouse club membership for many consumers. While e-commerce has been present, the substantial increase in consumer adoption of online grocery shopping, significantly accelerated by recent global events, and Amazon's continued strategic investments in its grocery fulfillment and delivery infrastructure represent an intensifying and emerging threat to Costco's established model.
AI Analysis | Feedback
Costco Wholesale (symbol: COST) operates as a membership-only warehouse club offering a wide array of products and services. The addressable markets for its main offerings span several significant retail sectors.
Addressable Markets for Costco Wholesale:
-
Warehouse Clubs: This is the most direct addressable market for Costco's business model.
- Global: The global Warehouse Clubs Market was valued at approximately USD 667.81 billion in 2025 and is projected to reach USD 997.23 billion by 2033, growing at a Compound Annual Growth Rate (CAGR) of 5.14%. Another estimate valued the global Warehouse Clubs Market at USD 1.6 trillion in 2024, projected to reach USD 2.4 trillion by 2032 with a CAGR of 5.2%.
- U.S.: The U.S. Warehouse Clubs & Supercenters market size was estimated at USD 768.3 billion in 2025, having grown at a 3.1% CAGR between 2020 and 2025. Another source indicated total revenue for Warehouse Clubs & Supercenters in the U.S. was $769.9 billion in 2024.
-
Overall Retail Market (General Merchandise): Costco operates within the broader retail industry, selling groceries, electronics, home goods, and other general merchandise.
- Global: The global retail industry market is valued at USD 27.26 trillion in 2025 and is forecast to reach USD 36.91 trillion in 2030, with a CAGR of 6.25%. Worldwide retail sales are projected to total $31.3 trillion in 2025, with projections indicating they will exceed $37 trillion by 2030.
- U.S.: U.S. retail sales are projected to total $7.45 trillion in 2025. The U.S. retail market was valued at USD 5127.42 billion in 2024 and is expected to reach USD 6189.29 billion by 2034, with a CAGR of 1.90%.
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Food & Grocery Retail Market: Groceries, fresh produce, meat, and bakery items are significant product categories for Costco.
- Global: The global food & grocery retail market size was valued at USD 11,932.5 billion in 2023 and is projected to reach USD 14,781.1 billion by 2030, growing at a CAGR of 3.2% from 2024 to 2030. Another estimate placed the global grocery market value at approximately USD 3.87 trillion in 2024, projected to grow to around USD 6.13 trillion by 2034 with a CAGR of 4.70%.
-
Pharmacy Market: Costco operates pharmacies within its warehouses.
- Global: The global pharmacy market size was valued at USD 2,051.5 billion in 2023 and is projected to grow to USD 3,886.3 billion by 2032, exhibiting a CAGR of 7.4% during the forecast period. The global pharmaceutical market size is calculated at USD 1.77 trillion in 2025 and is predicted to exceed USD 3.03 trillion by 2034, with a CAGR of 6.15%.
- U.S.: The U.S. pharmacy market size reached USD 643.4 billion in 2024 and is expected to reach USD 905.8 billion by 2033, exhibiting a growth rate (CAGR) of 3.87%. The U.S. retail pharmacy market is estimated to increase from US$ 609.2 billion in 2025 to US$ 818.0 billion by 2032, recording a CAGR of 4.3%.
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Optical Market: Costco offers optical centers for eyeglasses, contacts, and optometrist services.
- U.S.: The U.S. optical industry achieved a total market value of $68.3 billion in 2024. The U.S. optical market was valued at approximately USD 66 billion in 2023.
-
Gasoline Market (Retail Fuel): Many Costco warehouses include gas stations.
- Global: The global retail fuel market size was valued at approximately USD 4.5 trillion in 2023 and is projected to reach around USD 6.8 trillion by 2032, growing at a CAGR of 4.7%. The global gasoline market size reached USD 129.5 billion in 2024 and is projected to reach USD 145.7 billion by 2033, exhibiting a CAGR of 1.38%.
- North America: North America dominated the gasoline market in 2024.
AI Analysis | Feedback
Costco Wholesale Corporation (COST) is expected to drive future revenue growth over the next two to three years through several key strategies:
- New Warehouse Expansion: Costco has aggressive plans for expanding its global footprint. The company intends to open a significant number of new warehouses annually, targeting both domestic and international markets. For instance, Costco planned to open 27 new warehouses in fiscal year 2025 (including three relocations, resulting in 24 net new buildings) and 35 new warehouses by August 2026 (including five relocations for a net addition of 30 stores). This expansion strategy aims to capture new markets and increase its customer base.
- Membership Fee Increases and Growth: A significant driver for Costco's revenue is its membership fees. The company raised its annual membership fees by $5, effective September 1, 2024, which is expected to bolster future revenue. Additionally, Costco continues to demonstrate strong membership growth, with paid household members increasing by 7.6% year-over-year in Q1 fiscal year 2025, and high worldwide renewal rates, consistently around 90%.
- E-commerce Growth: Costco is investing in its online platform to enhance the digital shopping experience for members, including improvements in logistics and delivery services. The company has reported significant increases in e-commerce sales, with digitally-enabled comparable sales surging 16.6% in October 2025. This focus includes expanding product offerings available online.
- Growth of Kirkland Signature Private Label: Costco continuously expands its Kirkland Signature product line, offering high-quality items at competitive prices. This strategy not only drives sales but also strengthens brand loyalty among members, representing approximately 33% of U.S. sales.
- Expansion of Ancillary Businesses and Services: Costco operates various ancillary businesses such as pharmacies, optical centers, food courts, gas stations, and tire installation centers. These services, along with offerings like business delivery, travel, and the "Costco Next" curated marketplace, contribute to overall revenue growth and enhance member value.
AI Analysis | Feedback
Share Repurchases
- Costco's Board of Directors reauthorized a common stock repurchase program of up to $4 billion in January 2023, set to expire in January 2027. This program replaced a previous $4 billion authorization (adopted in 2019) under which approximately $1.4 billion had been utilized.
- The company's annual share buybacks were $700 million in 2024 and $676 million in 2023.
- Share repurchases amounted to $280 million for the period ending August 31, 2025.
Share Issuance
- Costco's shares outstanding were 0.445 billion in 2025, marking a 0.01% increase from 2024.
- In 2024, shares outstanding were 0.445 billion, a 0.07% increase from 2023.
- As of October 1, 2024, the number of common shares outstanding was 443,073,537.
Outbound Investments
- In June 2022, Costco acquired the remaining equity interest in its Taiwan operations from its former joint venture partner.
Capital Expenditures
- Costco's capital expenditures have shown a consistent increase, reaching $5.498 billion for fiscal year 2025 (TTM), $4.71 billion in 2024, $4.323 billion in 2023, and $3.891 billion in 2022.
- For fiscal year 2025, capital expenditures are expected to be approximately $5 billion, with plans to open 29 new warehouses.
- The company plans to open 35 new warehouses in fiscal year 2026 and continues to prioritize investments in technology, remodels, and manufacturing facilities to support growth.
Latest Trefis Analyses
Trade Ideas
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Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 172.31 |
| Mkt Cap | 406.7 |
| Rev LTM | 223,290 |
| Op Inc LTM | 16,093 |
| FCF LTM | 8,349 |
| FCF 3Y Avg | 11,295 |
| CFO LTM | 16,206 |
| CFO 3Y Avg | 16,062 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 5.9% |
| Rev Chg 3Y Avg | 3.7% |
| Rev Chg Q | 4.3% |
| QoQ Delta Rev Chg LTM | 1.1% |
| Op Mgn LTM | 4.5% |
| Op Mgn 3Y Avg | 4.6% |
| QoQ Delta Op Mgn LTM | -0.1% |
| CFO/Rev LTM | 6.1% |
| CFO/Rev 3Y Avg | 6.4% |
| FCF/Rev LTM | 2.5% |
| FCF/Rev 3Y Avg | 3.2% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 406.7 |
| P/S | 1.5 |
| P/EBIT | 26.8 |
| P/E | 37.2 |
| P/CFO | 18.7 |
| Total Yield | 3.6% |
| Dividend Yield | 1.4% |
| FCF Yield 3Y Avg | 3.4% |
| D/E | 0.1 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 3.5% |
| 3M Rtn | 6.3% |
| 6M Rtn | 3.5% |
| 12M Rtn | 6.8% |
| 3Y Rtn | 89.3% |
| 1M Excs Rtn | 5.0% |
| 3M Excs Rtn | 6.1% |
| 6M Excs Rtn | -3.3% |
| 12M Excs Rtn | -12.6% |
| 3Y Excs Rtn | 18.8% |
Comparison Analyses
Price Behavior
| Market Price | $1,006.74 | |
| Market Cap ($ Bil) | 447.0 | |
| First Trading Date | 07/09/1986 | |
| Distance from 52W High | -4.3% | |
| 50 Days | 200 Days | |
| DMA Price | $950.72 | $949.21 |
| DMA Trend | indeterminate | up |
| Distance from DMA | 5.9% | 6.1% |
| 3M | 1YR | |
| Volatility | 21.0% | 21.9% |
| Downside Capture | -4.42 | 37.76 |
| Upside Capture | 52.14 | 28.31 |
| Correlation (SPY) | 4.1% | 39.6% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.10 | 0.15 | 0.11 | 0.06 | 0.46 | 0.57 |
| Up Beta | 0.22 | 0.48 | 0.49 | 0.18 | 0.56 | 0.60 |
| Down Beta | -1.77 | -0.48 | -0.58 | -0.01 | 0.45 | 0.51 |
| Up Capture | 69% | 105% | 64% | 14% | 22% | 38% |
| Bmk +ve Days | 9 | 20 | 31 | 70 | 142 | 431 |
| Stock +ve Days | 11 | 22 | 30 | 60 | 121 | 411 |
| Down Capture | -14% | -37% | -0% | -4% | 49% | 75% |
| Bmk -ve Days | 12 | 21 | 30 | 54 | 109 | 320 |
| Stock -ve Days | 10 | 19 | 31 | 63 | 129 | 339 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with COST | |
|---|---|---|---|---|
| COST | -3.3% | 21.8% | -0.24 | - |
| Sector ETF (XLP) | 6.4% | 14.1% | 0.21 | 58.0% |
| Equity (SPY) | 18.5% | 19.2% | 0.76 | 39.6% |
| Gold (GLD) | 78.4% | 26.1% | 2.20 | 2.4% |
| Commodities (DBC) | 19.7% | 17.1% | 0.89 | 5.7% |
| Real Estate (VNQ) | 5.3% | 16.6% | 0.14 | 40.2% |
| Bitcoin (BTCUSD) | -20.7% | 45.1% | -0.38 | 16.3% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with COST | |
|---|---|---|---|---|
| COST | 26.1% | 22.6% | 0.99 | - |
| Sector ETF (XLP) | 8.9% | 13.2% | 0.45 | 62.1% |
| Equity (SPY) | 13.9% | 17.0% | 0.65 | 56.8% |
| Gold (GLD) | 23.4% | 17.3% | 1.11 | 7.4% |
| Commodities (DBC) | 11.2% | 19.0% | 0.47 | 6.9% |
| Real Estate (VNQ) | 5.2% | 18.8% | 0.18 | 42.2% |
| Bitcoin (BTCUSD) | 7.7% | 56.8% | 0.36 | 20.5% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with COST | |
|---|---|---|---|---|
| COST | 22.8% | 21.9% | 0.92 | - |
| Sector ETF (XLP) | 8.2% | 14.7% | 0.43 | 63.1% |
| Equity (SPY) | 15.4% | 17.9% | 0.74 | 57.1% |
| Gold (GLD) | 15.0% | 15.6% | 0.80 | 6.3% |
| Commodities (DBC) | 9.0% | 17.6% | 0.42 | 12.3% |
| Real Estate (VNQ) | 6.5% | 20.7% | 0.28 | 41.7% |
| Bitcoin (BTCUSD) | 66.2% | 66.8% | 1.06 | 13.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 12/11/2025 | -0.0% | -3.0% | |
| 9/25/2025 | -2.9% | -2.8% | -1.0% |
| 5/29/2025 | 3.1% | 0.2% | -1.9% |
| 3/6/2025 | -6.1% | -13.2% | -10.7% |
| 12/12/2024 | 0.1% | -3.4% | -6.6% |
| 9/26/2024 | -1.8% | -2.9% | -1.1% |
| 5/30/2024 | -0.7% | 3.3% | 3.7% |
| 3/7/2024 | -7.6% | -6.8% | -9.4% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 13 | 13 | 12 |
| # Negative | 11 | 11 | 11 |
| Median Positive | 1.9% | 2.4% | 6.5% |
| Median Negative | -1.4% | -3.0% | -2.3% |
| Max Positive | 6.6% | 5.5% | 13.1% |
| Max Negative | -7.6% | -13.2% | -10.7% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 11/30/2025 | 12/17/2025 | 10-Q |
| 08/31/2025 | 10/08/2025 | 10-K |
| 05/31/2025 | 06/05/2025 | 10-Q |
| 02/28/2025 | 03/13/2025 | 10-Q |
| 11/30/2024 | 12/19/2024 | 10-Q |
| 08/31/2024 | 10/09/2024 | 10-K |
| 05/31/2024 | 06/06/2024 | 10-Q |
| 02/29/2024 | 03/13/2024 | 10-Q |
| 11/30/2023 | 12/20/2023 | 10-Q |
| 08/31/2023 | 10/11/2023 | 10-K |
| 05/31/2023 | 06/01/2023 | 10-Q |
| 02/28/2023 | 03/09/2023 | 10-Q |
| 11/30/2022 | 12/29/2022 | 10-Q |
| 08/31/2022 | 10/05/2022 | 10-K |
| 05/31/2022 | 06/02/2022 | 10-Q |
| 02/28/2022 | 03/10/2022 | 10-Q |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Polit, Javier | Executive Vice President | Direct | Sell | 12312025 | 867.21 | 2,049 | 1,776,904 | 9,320,634 | Form |
| 2 | Polit, Javier | Executive Vice President | Direct | Sell | 12312025 | 862.89 | 558 | 481,759 | 8,792,548 | Form |
| 3 | Wilcox, William Richard | Executive Vice President | Direct | Sell | 11122025 | 930.13 | 2,400 | 2,232,312 | 1,860,260 | Form |
| 4 | Barbre, Tiffany Marie | Direct | Sell | 10242025 | 934.62 | 1,239 | 1,158,353 | 4,818,386 | Form | |
| 5 | Adamo, Claudine | Executive Vice President | Direct | Sell | 10242025 | 935.68 | 2,700 | 2,526,336 | 6,410,528 | Form |
COST Trade Sentinel
AVOID (Score 1-2)
CONVICTION RATIONALE
The analysis yields a probability-adjusted skew of 0.69x, indicating a highly unfavorable risk/reward profile at the current valuation. The potential upside is severely limited by the speculative starting multiple, while the downside risk of multiple compression is significant. Even with a high probability of continued business success, the stock price does not offer an attractive entry point.
STOCK ARCHETYPE
Mature Cash CowCostco fits the 'Mature Cash Cow' archetype due to its focus on high capital efficiency (38% ROIC), structural pricing power derived from its membership model, and a predictable, durable, single-digit growth profile, rather than the hyper-growth characteristics of a 'High-Beta Compounder'.
INVESTMENT THESIS
The investment thesis is centered on Costco's high-margin, annuity-like membership fee stream, which provides a highly predictable and growing source of profit that is insulated from the low-margin volatility of the core retail business. This profit engine is fueled by a powerful, self-reinforcing business model where scale-driven cost leadership attracts and retains a loyal member base with exceptionally high renewal rates.
- Membership Fees (High Margin) grew +14% YoY, significantly outpacing Net Sales (Low Margin) growth of +8.2% YoY.
- Membership renewal rates remain exceptionally high at 92.2% in the U.S. & Canada and 89.7% worldwide.
- The number of paid member households grew a robust 5.2% year-over-year in Q1 2026.
PRIMARY RISK
Trading at a P/E ratio of ~53x, a significant premium to its historical average (~39x), Costco's stock is highly vulnerable to multiple compression. The most probable trigger for this de-rating is rising consumer credit stress, which could lead to a slowdown in discretionary spending and average basket size, causing a miss on consensus growth expectations that the current valuation cannot absorb.
- The current P/E ratio of ~53x is substantially above the company's own ten-year historical average of ~39x.
- U.S. household debt has surpassed $18 trillion, with aggregate delinquency rates reaching a multi-year high, indicating tangible financial stress on Costco's target consumer.
| KPI | Threshold | Rationale |
|---|---|---|
| Worldwide Membership Renewal Rate | > 89.5% | This is the single most important indicator of customer loyalty and the health of the high-margin profit stream. A sustained drop below the current level would signal a crack in the core investment thesis. |
| Comparable Sales Growth | > 5.5% | To justify its premium valuation, Costco must continue to demonstrate market share gains. Growth falling below this level would bring its trajectory more in line with peers and challenge the premium multiple. |
| Forward P/E Multiple | Watch for compression below 40x | The primary risk is valuation. A multiple compression towards its historical average of ~39x is the key mechanism for the bear case and indicates a shift in market sentiment away from 'growth at any price'. |
Valuation Premium vs. Execution Perfection
BULL VIEW
Consistent mid-single-digit comps, ~90% renewal rates, and accelerating e-commerce (+20.5%) are structural strengths that command a premium valuation.
CORE TENSION
Can Costco's flawless execution and market share gains justify a 53x P/E, or is it priced for perfection and vulnerable to any macro shock or operational hiccup?
PREVAILING SENTIMENT
The sentiment score is 1.0. While Q1 comps accelerated to 6.4%, the worldwide membership renewal rate dipped 10bps to 89.7%, showing the tension between strong sales and core franchise risk.
BEAR VIEW
A 10bps dip in renewal rates and rising consumer credit stress create downside risk for a stock trading far above its historical average P/E.
| Timeline | Event & Metric To Watch |
|---|---|
March 4, 2026 | Q2 2026 Earnings Call Watch: Worldwide Membership Renewal Rate > 89.7%. A second consecutive sequential decline confirms a negative trend in the highest margin business. |
Monthly (Feb & Mar 2026 data critical) | Monthly Retail Sales Data (Census Bureau) Watch: Growth in 'General Merchandise' and 'Electronics' categories. A material slowdown indicates rising consumer credit stress is impacting Costco's core product areas. |
Ongoing | Federal Reserve Meeting / Inflation Data Watch: U.S. 10-Year Treasury Yield. A sustained break above 4.5% would likely trigger a valuation-driven sell-off in high P/E stocks. |
Ongoing (Q2-Q3 2026) | Supply Chain & Freight Rate Data Watch: Drewry's World Container Index (WCI) for Asia-U.S. routes. A persistent rise signals a return of margin pressure from freight costs. |
| Date | Event | Stock Impact |
|---|---|---|
9/5/2025 | August 2025 Sales Report Details: Costco released its August sales figures, showing an 8.7% year-over-year increase in net sales, which met market expectations. | Flat (0.8%) $953.24 -> $960.80 |
9/25/2025 | Q4 FY2025 Earnings Release Details: Costco reported revenue and EPS that beat analyst estimates for its fiscal fourth quarter. [29] The stock saw little change, suggesting results were largely priced in. | Muted (-0.2%) $942.64 -> $940.69 |
10/9/2025 | September 2025 Sales Report Details: Costco announced sales figures for September, which were received positively by the market, leading to a significant single-day stock price increase. | Rose significantly by 3.1% $912.26 -> $940.27 |
11/5/2025 | October 2025 Sales Report Details: Costco reported its sales results for the retail month of October. The muted stock reaction suggests the results were in line with expectations. | Muted (-0.6%) $939.45 -> $933.75 |
12/11/2025 | Q1 FY2026 Earnings Release Details: Costco reported Q1 EPS of $4.50, beating estimates of $4.28. [4] Despite the beat, the stock reaction was muted as investors weighed a 10bps decline in worldwide renewal rates. | Modest 1.2% gain $873.21 -> $883.27 |
2/4/2026 | January 2026 Sales Report Details: Costco reported strong January sales with comparable sales up 7.1% and digitally-enabled sales surging 34.4%, indicating continued business momentum. | Modest 1.1% gain $978.35 -> $989.29 |
Position Sizing
4%-6%
NORMAL
Stock trades in a Moderate Volatility regime (1.7x S&P). The Neutral sentiment and Expensive valuation prevent an aggressive stance, despite high business quality. This is a classic 'growth at a price' scenario, warranting a Normal allocation.
Diversification Alternatives
PSMT
INDUSTRYApplies Costco's proven warehouse club model to less saturated emerging markets, offering a potentially longer runway for unit growth.
MNST
SECTOROffers pure-play exposure to the high-growth energy drink category with a powerful global brand, a different risk profile than broadline retail.
Costco is a high-volume global retailer whose primary profit engine is a high-margin, recurring subscription fee business, rather than its low-margin merchandise sales.
Filter all news through the lens of membership health (renewal rates, new sign-ups, fee increases) as the primary driver of profitability, with merchandise sales volume as the secondary driver.
Worldwide membership renewal rates holding at or above 89%; sustained growth in new member sign-ups, particularly in international markets; any announcement or analyst speculation of an upcoming membership fee increase; comparable store sales growth >5%.
A decline in worldwide membership renewal rates below 88%; a sustained slowdown in new member acquisition; significant negative reaction to a fee increase impacting renewal rates; consistent comparable store sales growth below 3%; major supply chain disruptions impacting in-store stock and value perception.
Short-term fluctuations in gasoline prices (impacts reported revenue but not core profitability); quarterly changes in merchandise mix between categories; individual product recalls unless they signal a systemic quality control issue; promotional activities of competitors that don't impact membership trends.
Repricing Catalyst
The primary catalyst for Costco is the timing and execution of its next membership fee increase. An increase of $5 for Gold Star and $10 for Executive, applied to its 81.4 million paid members (as of Q1 FY26), would directly increase high-margin revenue and flow almost entirely to operating income, reinforcing the subscription-like nature of the business model.
Merchandise Sales
$263.9B TTM (98.0% of Total) · 11% MarginWhat It Is
Bulk-packaged goods across limited SKUs in categories including Food and Sundries, Fresh Foods, Non-Foods (e.g., electronics, apparel, hardware), and Warehouse Ancillary (e.g., gasoline, pharmacy). A significant portion is sold under the private label Kirkland Signature.
Who Pays & How
Members pay for merchandise because Costco's business model uses its membership fee income to subsidize prices, resulting in very low markups on goods. This creates a strong value proposition of quality goods at prices competitors often cannot match.
Competition
Membership Fees
$5.3B TTM (2.0% of Total) · 100% MarginWhat It Is
Annual access to Costco warehouses via tiered memberships (e.g., Gold Star, Business, Executive). Executive members pay more for a 2% reward on purchases.
Who Pays & How
81.4 million paid members (as of Q1 FY26) pay the annual fee to gain access to the low-priced merchandise in the warehouses. The savings on goods are designed to significantly exceed the cost of the membership.
Competition
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