Costco's September Comps Impress as Holiday Shopping Season Nears

Costco Wholesale Corporation’s COST U.S. comparable sales rose 5.1% in September, indicating consumer strength and a preference for value heading into the holiday season. The performance suggested solid traffic growth and a strong response to recent operational changes that enhance member convenience and engagement. We note that U.S. comparable traffic and ticket were up 3.5% and 1.5%, respectively, in the fourth quarter of fiscal 2025.

The results suggest that U.S. shoppers remain engaged with Costco’s expanding mix of essentials and discretionary goods. A key driver of this has been the strategic enhancement of the shopping experience. Management stated that the recent addition of exclusive morning hours for executive members and an extra hour on Saturday evenings for all members has added approximately one percent to weekly U.S. sales since its implementation on June 30.

Costco has adjusted its holiday product mix, leaning into higher-ticket and practical goods like furniture and home improvement items instead of the traditional seasonal lineup. This strategy aims to meet evolving member priorities while sustaining strong sales productivity per warehouse.

While tariffs and inflation remain concerns, Costco’s ability to drive comparable sales through both traffic and ticket growth shows that consumer demand remains resilient. The September results highlight continued loyalty from shoppers, suggesting that the company enters the holiday season on a solid footing as members prioritize quality, value and convenience. According to Deloitte, U.S. holiday retail sales are projected to rise between 2.9% and 3.4% during the November-to-January period. 

What the Latest Metrics Say About Costco

Costco, which competes with Dollar General Corporation DG and Target Corporation TGT, has seen its share rise 4.5% in the past year, outpacing the industry’s growth of 4.2%. While shares of Dollar General have rallied 24.4%, Target has declined 45.9% in the aforementioned period.
 

From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 46.03, higher than the industry’s ratio of 29.48. COST carries a Value Score of D. Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 10.84) and Dollar General (15.28). 
 

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 7.7% and 11.1%, 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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