NEW YORK, May 26, 2026, 12:01 EDT
Costco Wholesale stock slipped Tuesday, with traders looking at the warehouse giant’s strong run in sales but balking at its high valuation ahead of fiscal Q3 earnings due in two days.
Costco shares dropped 2.7% to $1,000.48 late in the morning. That put the retailer’s market cap near $445 billion. The price-to-earnings ratio sat around 52, which tracks the stock price against per-share earnings.
Costco is set to post fiscal Q3 earnings after the bell on Thursday, May 28. Analysts expect earnings of $4.98 a share on revenue of around $69.61 billion, according to TipRanks. The report could show if investors will keep paying up for a retailer that keeps pulling in shoppers even as household budgets stay under pressure.
Costco reported April net sales climbed 13.0% to $23.92 billion. Comparable sales rose 11.6%, or 7.8% if fuel and currency are excluded. The company said an extra shopping day thanks to the Easter shift added about 1.5 to 2 points to sales growth. Bulls had enough in the numbers to stay positive.
Costco’s story still hangs on its membership numbers. In the latest quarterly report, the company put its renewal rate at 92.1% in the U.S. and Canada and 89.7% worldwide for the second quarter, factoring in more online sign-ups that tend to renew a bit less. Membership fee revenue jumped 14% for both the quarter and the first half.
Costco CEO Ron Vachris says the company’s plan is clear: be “the first to lower prices and the last to raise them,” according to a quote cited by TipRanks. That approach has made Costco stock popular with defensive investors, even if it’s not seen as a bargain. TipRanks
TipRanks investor Daniel Sparks called Costco’s stock rarely discounted, citing its low prices and steady membership model. Sparks said membership fees are recurring and “barely flinches” even when the broader economy dips. TipRanks
Cost is the other issue. Motley Fool’s Neil Patel said Costco’s size makes a 100x jump from this point unlikely, with the stock now trading at over 50 times earnings. He thinks it belongs on a watch list. “It’s just too big of a business,” Patel wrote. The Motley Fool
Shareholder payouts give Costco another line of support, but it’s not a big yield. The board bumped up the quarterly dividend to $1.47 a share last month, or $5.88 a year. Sparks pointed to the company’s record of special dividends too—$15 a share in January 2024, $10 in December 2020—though she said there’s no guarantee on those.
Costco’s stock has beaten other big retailers this year. TipRanks said shares rose about 20% before Tuesday’s slip, while Walmart gained 8% and Amazon added 15%. The move has come as Costco posts steady sales and promotes value pricing.
But there’s a risk the bar is already set. Options traders are pricing in a 3.65% move in either direction for Costco after the earnings drop, according to TipRanks. That suggests investors could react even if results just match estimates.
Thursday’s focus is on traffic, renewals, digital, gas, and any management comments to back the current multiple. Costco now has 928 warehouses—637 in the U.S. and Puerto Rico, 115 in Canada—and e-commerce sites across eight markets.
