Costco's International Markets Drive the Next Phase of Growth

Costco Wholesale Corporation’s COST December sales highlight a significant shift in growth dynamics. While the United States remains the company’s largest market, international segments are becoming vital growth engines. 

For the five weeks ended Jan. 4, 2026, Costco reported a 7% year-over-year increase in total comparable sales. Stellar international performance accounted for most of this growth. Comparable sales rose 8.4% in Canada and 10.6% in Other International markets, both outpacing the 6% growth in the United States.

This trend is not limited to a single retail period. Over the first 18 weeks of fiscal 2026, total company comparable sales grew 6.6%. During this period, international markets outperformed the domestic segment. Comparable sales rose 7% and 9.5% in Canada and Other International markets, respectively, while the metric grew 5.9% in the United States. 

As Costco expands its global footprint and strengthens its digital platforms, international markets are becoming increasingly important contributors to overall sales momentum. The company now operates 290 warehouses outside the United States, spanning major markets — Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Sweden, Iceland and New Zealand.

Markedly, the company expects to open 30 net new clubs in fiscal 2027 and beyond, with roughly half planned outside the United States. Strong member loyalty supports this global expansion strategy, with the worldwide membership renewal rate at 89.7% at the end of the first quarter.

By combining a strong physical presence with an expanding e-commerce reach, Costco is effectively capturing consumer demand globally. As international consumers increasingly seek value and quality, Costco’s ability to deliver both through its bulk-purchasing model ensures that its international divisions remain a primary source of future growth.

What the Latest Metrics Say About Costco

Costco, which competes with Dollar General Corporation DG and Target Corporation TGT, has seen its shares decline 2.3% in the past year against the industry’s growth of 6.1%. While shares of Dollar General have rallied 101.8%, those of Target dropped 24.9% in the aforementioned period.
 

From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 44.10, higher than the industry’s ratio of 30.16. COST carries a Value Score of D. Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 13.80) and Dollar General (20.51). 
 

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 7.5% and 11.7%, respectively. For the next fiscal year, the consensus estimate indicates a 7.2% rise in sales and 9.2% growth in earnings.
 

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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