Costco's E-Commerce Sales Surge: A Dark Horse Growth Engine?

While Costco Wholesale Corporation COST is primarily known for its dominance in brick-and-mortar warehouse retailing, its e-commerce business is steadily gaining traction. The segment may soon emerge as a meaningful growth driver for the retail bellwether.

In the third quarter of fiscal 2025, e-commerce comparable sales — excluding the impacts from changes in gasoline prices and foreign exchange — surged 15.7%, outpacing Costco’s overall comparable sales growth of 8%. We note that site traffic climbed 20%, while average order value ticked up 3% in the quarter, pointing to increased engagement and higher spending.

Several initiatives are pushing this channel forward. The recent integration of a Buy Now, Pay Later (“BNPL”) option through Affirm is aimed at boosting conversions on big-ticket items, including appliances and electronics. Meanwhile, a 31% year-over-year increase in Costco Logistics deliveries highlights the company’s growing fulfillment capabilities, particularly in bulky-item categories.

Costco’s personalization efforts also seem to be bearing fruit. From tailored product recommendations to targeted promotions, Costco is refining its digital playbook. A Mother's Day campaign based on past purchase history and a curated product discovery hub are examples of how Costco is using data for targeted retailing.

Though e-commerce still accounts for a modest share of total sales, the pace of innovation and traction suggests that it may no longer be just a supporting player. As digital penetration deepens, particularly in big and bulky categories and high-margin discretionary segments, e-commerce could become a more material growth lever for Costco’s evolving business model.

How Costco’s E-Commerce Growth Compares to Walmart & Sprouts

Walmart Inc. WMT reported a 22% year-over-year increase in global e-commerce sales in the first quarter of fiscal 2026. Walmart continues to scale its digital business through faster delivery, improved fulfillment and marketplace expansion. With growing customer adoption, Walmart is firmly positioning itself as a strong digital retail competitor.

Sprouts Farmers Market, Inc. SFM reported 28% growth in e-commerce sales for the first quarter of 2025, with digital channels now accounting for 15% of total sales. Sprouts Farmers indicated that this performance was broad-based, with strong contributions from all three e-commerce partners — Instacart, DoorDash and Uber Eats. With a planned rollout of the loyalty program in the second half of 2025, Sprouts Farmers aims to deepen personalization and engagement.

Costco’s Price Performance, Valuation and Estimates

Costco stock has been a standout performer, with shares rallying 15.5% in the past year, outpacing the industry’s growth of 5.6%. 
 

From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 50.11, higher than the industry’s ratio of 32.13. 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 8.1% and 12%, 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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