Costco Stock Drops Despite Strong Sales: Latest News, Forecasts and Analysis as of December 4, 2025

Ticker: Costco Wholesale Corporation (NASDAQ: COST)
Date: December 4, 2025

Costco stock is under pressure today even though the warehouse giant just posted robust November and first‑quarter sales and continues to grow membership income at a double‑digit clip. Investors are focusing on slowing U.S. sales momentum, stretched valuation and fresh legal and governance headlines – all of which make COST one of the most hotly debated large‑cap stocks heading into its December earnings report. ^[1]

Below is a detailed, up‑to‑date look at Costco’s share price, the newest news from December 4, 2025, Wall Street forecasts and what it all could mean for investors.

Costco Stock Today: Price Action and Year‑to‑Date Performance

As of late trading on December 4, 2025, Costco shares change hands at around $896, down roughly 2.9% on the day. The stock has traded between about $888 and $913 in today’s session.

MarketWatch and other outlets note that this drop has pushed Costco’s year‑to‑date performance slightly negative for 2025, even after two extraordinary years in 2023–2024 when the stock gained more than 100% in total. By contrast, the S&P 500 is up in the mid‑teens this year, making Costco one of the rare high‑quality consumer names lagging the broader market. ^[2]

Other snapshots show Costco’s market capitalization around $400+ billion and a price‑to‑earnings ratio near 50x, underscoring the stock’s premium valuation versus most retailers. ^[3]

What Changed on December 4, 2025?

Several same‑day catalysts are driving trading in COST:

Reaction to November and Q1 FY26 sales data
Fresh commentary on slowing U.S. comps and high valuation
Nomination of former U.S. Commerce Secretary Gina Raimondo to Costco’s board
Ongoing coverage of Costco’s lawsuit over Trump‑era tariffs
Updated analyst ratings and price targets

Let’s unpack each of these.

1. November and Q1 FY26 Sales: Strong Headline Growth

On December 3, Costco released November 2025 and first‑quarter FY26 net sales figures, which set the stage for today’s move. According to Costco’s investor relations and related summaries: ^[4]

November net sales:
- $23.64 billion, up 8.1% year‑over‑year
Q1 FY26 (12 weeks ended November 23, 2025):
- Net sales $65.98 billion, up 8.2% from $60.99 billion a year ago
13‑week year‑to‑date sales:
- $71.97 billion, also up 8.2% year‑over‑year
Comparable sales (same‑store sales):
- Total company comps for November: +6.9%
- Total comps for the 12‑week quarter: +6.4%
- U.S. comps (quarter): +5.9%
- Canada and other international markets: mid‑ to high‑single‑digit growth, with double‑digit gains in some regions
Digitally enabled (e‑commerce and omnichannel) sales:
- Up about 20.5% for the 12‑week quarter

Barron’s highlighted that Costco’s 6.4% same‑store sales growth for the quarter beat analyst expectations around 5.8%, with digital sales being a key driver of outperformance. ^[5]

In short: operationally, Costco just delivered exactly what long‑term bulls want to see – solid mid‑single‑digit traffic gains, rising ticket size and strong e‑commerce momentum.

2. So Why Is Costco Stock Down Today?

Despite the strong sales numbers, multiple outlets report that COST is selling off because investors are increasingly sensitive to any hint of decelerating growth given the stock’s rich valuation. ^[6]

Key points from today’s commentary:

U.S. growth is slowing at the margin.
MarketWatch notes that while U.S. comps are still healthy, November U.S. comparable sales growth slipped to the mid‑5% range, slightly below earlier months. That slowing trajectory – even from a high base – is what the market is zeroing in on. ^[7]
Multi‑year growth rates and traffic are normalizing.
Analysts point out that “multi‑year” stacked comps and traffic growth are coming down from the extraordinary levels of 2022–2023. That’s normal as pandemic‑era distortions fade, but it leaves Costco more exposed to its lofty earnings multiple. ^[8]
Valuation leaves little room for disappointment.
Several analyses emphasize that Costa’s forward P/E ratio – around 45–50x next‑twelve‑month earnings – is well above its already‑rich 10‑year median near 36x and far above many peers. ^[9]
Short‑term traders are “selling the news.”
The Motley Fool and other commentators frame today’s decline as a classic case of “good numbers, high expectations”: even an impressive sales print can spark selling when many investors are sitting on sizable gains from the past five years. ^[10]

Benzinga adds that JPMorgan trimmed its price forecast for Costco after the sales release, interpreting November U.S. “core” comps as slightly light versus bullish expectations, even though broader trends remain solid. ^[11]

3. Gina Raimondo Nominated to Costco’s Board

In a separate December 4 press release, Costco announced the nomination of Gina Raimondo, former U.S. Secretary of Commerce (2021–2025) and Governor of Rhode Island (2015–2021), to its Board of Directors. ^[12]

Highlights:

Raimondo has deep experience in global trade, international security and economic policy.
Before politics, she worked in venture capital, giving her private‑sector credentials alongside her public‑sector background.
Costco’s board chair said her international and policy expertise would add an important dimension to the company’s global ambitions.

For investors, this move matters because Costco is:

Expanding aggressively overseas, including in high‑profile markets like China. ^[13]
Navigating a complex trade environment (see the tariff lawsuit below).
Increasingly dependent on global sourcing and cross‑border logistics.

Raimondo’s appointment is therefore being read as a strategic governance upgrade, not a short‑term stock catalyst but potentially supportive of Costco’s long‑run expansion and regulatory navigation.

4. Costco’s Tariff Lawsuit: Legal Overhang with Potential Upside

Earlier this week – and still very much part of the current Costco news cycle – the company filed a lawsuit against the U.S. government over Trump‑era emergency tariffs imposed under the International Emergency Economic Powers Act (IEEPA). ^[14]

Key points:

Costco argues that the use of IEEPA to levy broad tariffs overstepped executive authority and is seeking to preserve its right to tariff refunds if the Supreme Court ultimately rules against the policy.
The suit was filed in the U.S. Court of International Trade, and Costco joins several other import‑heavy companies pursuing similar claims.
Costco emphasizes that it has tried to minimize the impact on customers, using tactics like:
- More local sourcing
- Supplier consolidation
- Pushing additional volume into its high‑margin Kirkland Signature private‑label brand

Financially, a favorable court outcome could result in one‑time tariff refunds, potentially boosting Costco’s cash flow. In the near term, the lawsuit adds headline risk but limited operational risk, as Costco has already digested much of the tariff impact into its pricing and vendor strategy.

5. Membership Engine: Costco’s “Subscription” Business Remains Powerful

Behind today’s price volatility, Costco’s membership economics remain one of the strongest investment pillars in the story.

From Costco’s Q4 FY2025 results and subsequent coverage: ^[15]

Membership fee income (Q4 FY25):
- Roughly $1.72 billion, up about 14% year‑over‑year, outpacing overall revenue growth.
Full‑year membership fees:
- Around $5.3 billion in fiscal 2025, representing only ~2% of revenue but the majority of Costco’s profit base thanks to near‑100% margins.
Paid household members:
- About 81 million, up 6.3% year‑over‑year.
Executive members:
- Growing faster than the base (around +9% year‑over‑year) and accounting for nearly three‑quarters of global sales.
Renewal rates:
- Still excellent, with U.S./Canada renewals above 92% and worldwide just under 90%, though both are down modestly as more members sign up online through promotions. ^[16]

Commentary from Nasdaq, The Motley Fool and others frames Costco less as a retailer and more as a subscription business with a store attached: membership fees provide recurring, high‑margin revenue that can subsidize razor‑thin merchandise margins and everyday low prices. ^[17]

That structure is why Costco can:

Keep gross margins on goods around 11%, well below typical retailers. ^[18]
Still generate 2–3% net profit margins, with membership fees contributing the bulk of earnings. ^[19]

For long‑term bulls, today’s sell‑off doesn’t change that engine; if anything, the double‑digit growth in membership income reinforces the moat.

6. Wall Street Forecasts and Analyst Views (2026 and Beyond)

Earnings Outlook

Recent coverage from Nasdaq, Barchart and others suggests that analysts expect high‑single‑digit to low‑double‑digit EPS growth in 2026:

One widely cited forecast pegs 2025 EPS around $18.0 and 2026 EPS near $19.7, implying roughly 9–10% growth. ^[20]
Another estimate expects FY2026 EPS closer to $19.97, roughly 11% above the prior year. ^[21]

Costco’s Q1 FY2026 earnings call is scheduled for December 11, 2025, with consensus calling for: ^[22]

EPS: about $4.24 for the quarter
Revenue: roughly $67.0 billion (which would include membership fees, unlike the sales report released this week)

Analysts will be listening closely for commentary on:

Membership renewal trends post fee increases
Margin pressures from tariffs, wages and shrink
The pace of new warehouse openings, especially overseas
E‑commerce profitability and logistics costs

Price Targets: Upside, but Not Explosive

Different aggregators show slightly different numbers, but the pattern is similar: ^[23]

MarketBeat / MarketBeat‑referenced analysis:
- Average 12‑month target around $1,025–$1,065
Barchart:
- Average target about $1,028, implying ~11% upside from recent prices
TipRanks:
- Average target around $1,090+, with a range roughly $907–$1,218, implying mid‑teens upside on average

Overall, Wall Street’s consensus rating is typically described as “Moderate Buy” or “Outperform”, but with repeated caveats that the stock already prices in a lot of good news.

Valuation and Free‑Cash‑Flow Forecasts

Several recent deep‑dive pieces argue that:

At a P/E near 50x, Costco trades not only above most big‑box peers, but also above its own 10‑year median multiple (~36x), even after this year’s pullback. ^[24]
Long‑range models (e.g., Simply Wall St and others) project:
- Current annual free cash flow around $8.2 billion
- Rising to $10.7 billion by 2028
- Potentially reaching $15.6 billion by 2035 if Costco continues mid‑single‑digit sales growth and modest margin expansion. ^[25]

The takeaway: Wall Street still likes Costco’s business, but debates whether the stock’s valuation fully reflects that growth – or more than reflects it.

7. Special Dividend or Stock Split? Speculation Heats Up Again

A widely cited note on December 4 describes Costco as being “at a crossroads,” with its strong sales, thick membership income and sizable cash flows once again sparking talk of a potential special dividend or long‑awaited stock split. ^[26]

Key points from that coverage:

Costco has a history of occasional special dividends, returning excess cash to shareholders in large one‑time payouts.
With the stock trading in the high‑$800s and low‑$900s, some investors think a stock split could broaden the shareholder base or make options trading easier, although it has no fundamental impact on value.
Management has not committed to either action; the speculation is driven by:
- Strong balance sheet
- Predictable membership cash flows
- Underwhelming share performance this year despite robust business results

These are optional upside levers rather than core parts of the investment thesis, but they help explain why Costco remains popular with long‑term, income‑oriented investors.

8. Bull Case vs. Bear Case for Costco Stock (as of December 4, 2025)

Bull Case: Why Some See Today’s Sell‑Off as a Buying Opportunity

Bullish research pieces over the last few weeks tend to emphasize: ^[27]

Ultra‑sticky membership model:
Renewal rates around 90% globally and fee hikes in 2024–2025 have driven low‑teens growth in membership income, which is recurring, high‑margin and relatively recession‑resilient.
Defensive, everyday‑needs business:
Costco sells staples – food, household essentials, pharmacy, fuel – that consumers tend to prioritize even in down cycles.
Consistent traffic and digital growth:
E‑commerce and “digitally enabled” sales are growing faster than the core business, now rising ~20% year‑over‑year for the latest quarter. ^[28]
International runway:
The company continues to open warehouses globally, including in underpenetrated markets, and plans dozens of new clubs in FY26. ^[29]
Best‑in‑class execution:
Multiple commentators argue that Costco’s culture, vendor relationships and relentless focus on value make it one of the highest‑quality operators in retail, deserving of a permanent valuation premium.
Underperformance sets up a rebound:
Some outlets describe Costco as a “growth stock down ~7–15% from its highs” that could be attractive heading into 2026 if earnings keep compounding near 10% annually. ^[30]

In this view, today’s weakness is a valuation‑driven hiccup, not a thesis‑breaker.

Bear Case: Why Others Are Cautious or on the Sidelines

More cautious or bearish analyses focus on: ^[31]

Valuation risk:
Paying about 50x earnings for a business growing EPS in the high single digits to low double digits leaves little room for macro shocks or execution missteps. Multiple pieces warn this could cap near‑term returns even if fundamentals stay strong.
Decelerating U.S. comps and traffic:
The rate of growth, especially in the U.S., is slowing versus the post‑pandemic boom. That doesn’t mean the business is weak – just that comparisons are tougher and incremental acceleration may be hard to achieve.
Membership renewal softness at the margin:
The 14% jump in membership fees partly reflects price hikes, while renewal rates have ticked down a few tenths of a percentage point as more members sign up through promotions and online deals. If that trend worsens, the “subscription” engine could lose some torque. ^[32]
Legal and policy uncertainty:
The tariff lawsuit underscores how exposed Costco is to trade policy and import costs; a prolonged dispute could create volatility, even if the financial impact is manageable.
Relative performance risk:
Articles pointing out that Costco is on track for its worst performance relative to the S&P 500 in more than two decades worry that sentiment could stay sour until the valuation or growth profile re‑sets. ^[33]

From this perspective, Costco is still an outstanding business – just not necessarily an outstanding stock at current prices.

9. Key Dates and Metrics to Watch Next

For investors following COST after today’s news, here are the next major catalysts:

December 11, 2025 – Q1 FY26 earnings call
- Focus areas:
  - Membership fee income growth and renewal rates
  - Updated margin commentary, including tariffs, wages and shrink
  - Warehouse expansion pipeline for FY26–27
  - E‑commerce profitability and logistics efficiency ^[34]
Any update on:
- Potential special dividend or capital return policy
- Stock split considerations
- Progress or commentary on the tariff lawsuit
Operational KPIs to monitor:
- U.S. and international same‑store sales (especially ex‑gas and ex‑FX)
- Digitally enabled sales growth
- Membership renewal rates and Executive member mix

10. Is Costco Stock a Buy After Today’s Drop?

Whether Costco is a buy, hold or avoid at current levels depends largely on your time horizon and risk tolerance:

If you believe Costco can sustain high‑single‑digit to low‑double‑digit EPS growth for many years, maintain its membership moat and keep expanding globally, today’s pullback may look attractive in hindsight, even with a rich multiple.
If you are focused on valuation discipline and near‑term returns, a 50x P/E in a slowing, though still strong, consumer environment may feel too aggressive, especially after a decade of outperformance.

What’s clear from today’s news is that:

The business remains in excellent shape, with strong sales, robust membership income and healthy digital growth.
The stock is in a sentiment and valuation tug‑of‑war, where even good news can trigger selling when expectations are sky‑high.

As always, this article is for informational purposes only and does not constitute investment advice. Investors should consider their own financial situation, risk profile and conduct independent research – or consult a qualified financial adviser – before buying or selling Costco stock.