December 12, 2025 — Costco Wholesale Corporation (NASDAQ: COST) is back in the spotlight after posting a fiscal first-quarter 2026 earnings beat, renewing debate over whether the warehouse giant’s premium valuation is still justified as growth normalizes and tariff uncertainty hangs over parts of retail.
The headline numbers were strong: Costco said first-quarter net sales rose 8.2% year over year to $65.98 billion, with net income of $2.00 billion (or $4.50 per diluted share). [1] Investors, however, didn’t respond with the kind of enthusiasm Costco used to spark after a beat—an outcome that multiple analysts and market commentators attribute to a mix of high expectations, valuation, and macro/policy crosscurrents. [2]
Below is what matters for Costco stock right now—based on the latest reporting and analyst actions circulating on Dec. 12, 2025.
Costco earnings recap: the core story is “value + volume,” again
Costco’s quarter (12 weeks ended Nov. 23, 2025) delivered an across-the-board beat on the most watched retail metrics:
- Net sales:$65.98B, up 8.2% [3]
- Total revenue:$67.31B, topping consensus estimates tracked by Reuters/LSEG [4]
- EPS:$4.50, above estimates referenced in multiple reports [5]
- Comparable sales (total company):+6.4% for the quarter [6]
- Digitally-enabled comparable sales:+20.5% [7]
Reuters framed the quarter as a familiar Costco playbook win: shoppers looking to stretch budgets leaned into warehouse value, while Costco’s private label Kirkland Signature continued to pull its weight. [8]
Why Costco’s holiday commentary mattered
While many retailers fight for traffic with discounting, Costco’s holiday momentum showed up in unusually specific—and striking—signals of demand. MarketWatch and other outlets highlighted record food-court and bakery volume, plus strong Black Friday performance in certain online categories. [9] Business Insider reported U.S. comps gained 5.9%, supported by both higher traffic and higher transaction size, and described the holiday season as “record-setting” for Costco’s U.S. warehouses. [10]
This kind of detail matters to investors because it suggests Costco isn’t merely “comping” off inflation—it’s still pulling real customer volume.
Comparable sales: a solid beat, but the market is watching the trendline
In the context of Costco’s recent history, a 6.4% quarterly comp is strong. [11] The nuance is what happens next: investors increasingly care whether Costco can keep delivering mid‑single‑digit comps without leaning too heavily on one-off timing benefits or category mix.
Costco’s own November sales report (released earlier in December) reinforced the strength of the quarter, showing:
- November (4 weeks) net sales:$23.64B, up 8.1% [12]
- November comps (total company):+6.9% [13]
- Digitally-enabled comps (Nov.):+16.6% [14]
That’s the good news. The investor debate now is whether Costco’s growth can re-accelerate after tougher comparisons, or whether it will settle into “great company, slower stock” mode because the multiple already prices in excellence. [15]
Membership: the moat is intact, even as renewal rates ticked down slightly
Costco’s membership model remains the engine behind its unusually steady economics, and this quarter offered both reassurance and a small yellow flag.
From Costco’s Q1 supplemental disclosures (as republished on MarketScreener):
- Membership income growth:+14.0% [16]
- Worldwide renewal rate:89.7% [17]
- U.S./Canada renewal rate:92.2% [18]
- Paid memberships:81.4 million (up 5.2%) [19]
- Total cardholders:145.9 million (up 5.1%) [20]
- Executive memberships:39.7 million [21]
Multiple analysts have pointed out that renewal rates dipped modestly quarter over quarter, but remained high and above internal expectations—keeping the long-term thesis intact. [22]
Axios also noted Costco’s membership dynamics are being watched closely as a read on middle- and upper‑middle‑income shoppers, especially after Costco took the notable step of raising membership fees earlier in the year. [23]
Digital is no longer “extra credit”—it’s a core Costco narrative
Costco’s digitally-enabled comparable sales growth of 20.5% stands out in a quarter when many big-box retailers are working harder to keep e-commerce profitable. [24]
The Q1 supplemental materials also pointed to:
- E-commerce site traffic:+24%
- E-commerce average order value:+13% [25]
And Reuters highlighted how Costco continues to lean on delivery partnerships—Instacart in the U.S. and Uber Eats/DoorDash internationally—to keep convenience from becoming a competitor advantage. [26]
The market implication: Costco increasingly looks like a hybrid of warehouse scale and digital convenience, which can support premium valuation—but only if margin discipline holds.
Store expansion: growth isn’t just comps, it’s square footage
Costco ended the quarter operating 923 warehouses globally (including 633 in the U.S. and Puerto Rico), per its earnings release. [27]
On the forward view, an AI-generated earnings-call recap on Seeking Alpha cited management indicating 28 net new openings in fiscal 2026, while reiterating a longer-term ambition to sustain 30+ net openings annually using creative real estate strategies and international growth. [28]
That’s important for Costco stock because the company’s best “quiet superpower” is that new warehouses can add meaningful revenue without requiring heroic comps.
Why the stock didn’t “pop” on the beat: valuation and expectations
Even with strong results, several commentaries converged on the same explanation for muted stock response: Costco is expensive, and investors were positioned for a blowout.
A Seeking Alpha earnings analysis published today argued that—despite Costco being a world-class operator—a ~48x P/E leaves limited margin of safety if growth decelerates. [29] Barron’s and MarketWatch reporting similarly suggested the market may be wrestling with Costco’s ability to keep outperforming at a premium multiple, especially with renewal rates easing and tariff issues looming. [30]
In other words: the quarter looked great, but the stock needs either (1) accelerating growth again, or (2) a valuation reset, to create the next clear upside leg.
Analyst price targets and forecasts on Dec. 12: bullish ratings, mixed target moves
A notable cluster of Wall Street research updates hit on Dec. 12, 2025, and they tell a nuanced story: many firms remain positive on Costco’s business quality, but some trimmed price targets after the earnings print.
Highlights from today’s analyst actions
- Goldman Sachs: reiterated Buy with a $1,171 target (per Investing.com recap). [31]
- Bernstein: raised its target to $1,146 and kept Outperform, encouraging buying on weakness. [32]
- MarketScreener’s roundup listed multiple target adjustments (with ratings largely maintained), including:
- Goldman Sachs:$1,171 (from $1,218), Buy maintained
- Jefferies:$1,050 (from $1,180), Buy maintained
- Baird:$1,000 (from $1,125), Outperform maintained
- JPMorgan:$1,027 (from $1,025), Overweight maintained
- Truist:$926 (from $1,033), Hold maintained
- HSBC:$1,045 (from $1,060), Hold maintained [33]
Where consensus sits
Consensus target snapshots vary by data provider, but they cluster around low‑$1,000s:
- MarketBeat showed an average price target around $1,022 (with wide dispersion). [34]
- Another estimates compilation put an average around $1,071. [35]
Taken together, that suggests analysts still see upside from the mid‑$800s, but the upside case often hinges on Costco continuing to execute at a level that warrants the premium.
Tariff lawsuit risk: why policy headlines are now part of the Costco stock story
Costco’s quarter arrived amid a growing legal and political storyline around tariffs—and Costco is unusually visible in it.
Axios reported that Costco filed a lawsuit seeking to recover tariffs paid and to halt further import duties collection while a major Supreme Court case plays out. [36] Kiplinger added detail: Costco’s suit is intended to preserve refund eligibility because even if the Supreme Court ultimately strikes down certain tariffs, importers may not automatically receive refunds without separate legal action, especially if U.S. Customs “liquidates” entries. [37]
The Washington Post has also covered the broader fight over tariff refunds and why Costco stands out as a major retailer pursuing legal action. [38]
For investors, tariffs matter in two ways:
- Pricing/discount cadence: MarketWatch noted Costco cited fewer holiday discounts tied to tariffs, even as it tried to offset impacts through sourcing and alternative items. [39]
- Margin protection: Costco’s model runs on tight merchandise margins, so policy-driven cost shocks can have outsized narrative impact, even when the company is operationally strong.
The “wild card” catalysts: stock split chatter and special dividend speculation
Costco has not split its stock since 2000, according to its own investor relations record. [40] That long gap is one reason the stock-split topic keeps resurfacing whenever Costco’s share price stays elevated for long stretches.
In recent days and weeks, some market commentary has highlighted that a special dividend or stock split could act as a sentiment catalyst—though nothing has been announced and this remains speculative. [41]
Investors should treat this as optional upside, not a base-case forecast. The fundamental drivers remain sales, membership economics, and margin discipline.
What to watch next for Costco stock: the checklist for late 2025 into early 2026
For investors following Costco into the next leg of fiscal 2026, the near-term focus areas are clear:
- Monthly sales cadence and post-holiday demand (the market wants proof Costco’s holiday strength extends beyond anecdotes). [42]
- Membership renewal trend (small moves matter when valuation is high). [43]
- Digital profitability and delivery economics as e-commerce scales. [44]
- Warehouse expansion execution, especially internationally and in infill U.S. locations. [45]
- Tariff and legal developments, which can affect pricing strategy and investor sentiment even if Costco navigates the costs operationally. [46]
- Valuation compression risk: even bullish analysts acknowledge Costco’s multiple leaves less room for error. [47]
Bottom line: Costco’s business is strong—COST’s multiple is the real battleground
Costco’s fiscal Q1 2026 print reinforced why COST is often treated as a “quality compounder” in retail: high renewal rates, steady traffic, and growing digital engagement. [48]
But the market’s reaction on Dec. 12 shows what has changed: for Costco stock, beating estimates isn’t always enough. With valuation elevated, investors are demanding either a clearer path to renewed acceleration—or a better entry price.
References
1. investor.costco.com, 2. www.marketwatch.com, 3. investor.costco.com, 4. www.reuters.com, 5. www.reuters.com, 6. investor.costco.com, 7. investor.costco.com, 8. www.reuters.com, 9. www.marketwatch.com, 10. www.businessinsider.com, 11. investor.costco.com, 12. investor.costco.com, 13. investor.costco.com, 14. investor.costco.com, 15. seekingalpha.com, 16. www.marketscreener.com, 17. www.marketscreener.com, 18. www.marketscreener.com, 19. www.marketscreener.com, 20. www.marketscreener.com, 21. www.marketscreener.com, 22. www.investing.com, 23. www.axios.com, 24. investor.costco.com, 25. www.marketscreener.com, 26. www.reuters.com, 27. investor.costco.com, 28. seekingalpha.com, 29. seekingalpha.com, 30. www.barrons.com, 31. www.investing.com, 32. www.investing.com, 33. www.marketscreener.com, 34. www.marketbeat.com, 35. valueinvesting.io, 36. www.axios.com, 37. www.kiplinger.com, 38. www.washingtonpost.com, 39. www.marketwatch.com, 40. investor.costco.com, 41. www.morningstar.com, 42. investor.costco.com, 43. www.marketscreener.com, 44. www.marketscreener.com, 45. investor.costco.com, 46. www.axios.com, 47. seekingalpha.com, 48. investor.costco.com
