Is Costco's 5.7% Q4 Comparable Sales Growth a Bullish Signal?

Costco Wholesale Corporation COST reported a 5.7% rise in comparable sales for the fourth quarter of fiscal 2025, covering the 16 weeks ended Aug. 31. This key metric, closely watched by investors, demonstrates strong momentum for the company’s core retail activities. The figure shows gains across multiple regions and sales channels, indicating demand remains robust despite broader economic challenges.

U.S. comparable sales were up 5.1%, while Canada rose 6.3%, and Other International markets surged 8.6%. Digital channels again proved to be a strong growth driver, with e-commerce comparable sales climbing 13.6% in the quarter. When excluding the impacts of changes in gasoline prices and foreign exchange, total company comparable sales advanced 6.4%.

International markets outpaced domestic growth, pointing to diversification benefits as Costco expands its global footprint. The double-digit e-commerce growth underscores the rising role of digital channels within its overall retail ecosystem. Costco Logistics facilitates big and bulky deliveries, while Buy Now Pay Later options give shoppers more flexibility. 

The digital growth, combined with consistent performance in physical locations, underscores the strength of Costco's omnichannel strategy. The steady traffic and resilient comps highlight the enduring loyalty of its customer base and the effectiveness of its value-driven membership model. This data provides a compelling signal that Costco's business model is performing effectively. We note that net sales for the quarter reached $84.4 billion, up 8% from $78.2 billion last year.

Walmart and Target’s Trends Offer Industry Context

Walmart Inc. WMT continued to deliver steady traffic gains with U.S. comparable sales rising 4.6% in the second quarter of fiscal 2026, supported by strength in grocery, health & wellness and improving trends in general merchandise. E-commerce momentum remained strong as U.S. e-commerce sales advanced 26%, powered by nearly 50% growth in store-fulfilled delivery orders, with roughly one-third completed within three hours.

Target Corporation TGT showed early signs of stabilization following a challenging first quarter of fiscal 2025. While second-quarter sales dipped 0.9% year over year, in-store traffic trends improved significantly. Digital performance was also a bright spot, with comparable digital sales growing 4.3%, driven by robust same-day delivery offerings and expanding Drive Up services.

What the Latest Metrics Say About Costco

Costco stock has risen 6.6% over the past year, outpacing the industry’s growth of 4.7%. 
 

From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 48.55, higher than the industry’s ratio of 30.63. COST carries a Value Score of D.
 

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 8.2% and 11.6%, respectively. 
 

Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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