Costco Wholesale Corporation (NASDAQ: COST) slipped into Tuesday night as one of the most-watched stocks on Wall Street — not because of a big price swing, but because of a rare legal fight with the Trump administration, slowing but still-strong sales, and rising speculation about a special dividend and even a stock split.
Here’s what happened with Costco stock after the bell on December 9, 2025, and what traders and long‑term investors should know before the market opens on Wednesday, December 10.
Costco stock after the bell on December 9, 2025
Costco shares closed Tuesday at $888.44, up 0.10% on the day, with roughly 2 million shares changing hands — about in line with its recent average volume. [1]
According to technical service StockInvest, the stock traded in a narrow intraday range between about $881.51 and $888.94, a move of less than 1%. [2]
In extended trading, MarketBeat data show COST edging down to around $887.35, about 0.1% below the closing price, underscoring a fairly muted immediate reaction after the bell. [3]
How Costco has been performing in 2025
Despite its reputation as a steady compounder, Costco’s share price has been having an unusually tough year:
- Over the last 52 weeks, the stock is down about 10.5%, even as major indices hover near record highs. [4]
- A recent 24/7 Wall St. analysis notes that shares are down just over 2% year‑to‑date, while the S&P 500 is up about 17%, marking one of Costco’s worst relative performances vs. the index in more than two decades. [5]
That underperformance matters because Costco still trades at a premium multiple: MarketBeat puts its trailing P/E near 49, with earnings expected to grow about 9% next year, from $18.03 to $19.69 per share. [6]
At the same time, Costco’s fundamentals remain extremely strong. Over the last 12 months, the company has generated: [7]
- Revenue: ~$275.2 billion
- Net income: ~$8.1 billion
- EPS: $18.21
- Net margin: ~2.9% (thin, but typical for big-box retail)
- Return on equity: ~30.7%
- Net cash: about $5.35 billion, with $15.28B in cash vs. $9.94B in debt
In other words, the business looks robust, even as the stock price has cooled.
Macro backdrop: Fed decision keeps traders cautious
The broader market tone heading into Wednesday’s session is also important for Costco:
- The Dow, S&P 500 and Nasdaq all closed lower on Monday, with consumer and communication stocks under pressure as investors waited for the Federal Reserve’s final policy decision of the year. [8]
- Investopedia notes that the Fed is widely expected to cut rates again on Wednesday, likely bringing the target range down to roughly 3.5%–3.75%, with markets keenly focused on Chair Jerome Powell’s guidance for 2026. [9]
Costco is a defensive retail name but still sensitive to rate expectations: lower long‑term yields tend to support high‑multiple growth and quality stocks — a group that clearly includes COST.
The headline risk: Costco vs. Trump over tariffs
The biggest new storyline around Costco heading into December 10 is not about membership fees or hot dog combos — it’s a lawsuit against the Trump administration’s tariffs.
What Costco is suing over
On December 9, Retail Customer Experience reported that Costco has sued the Trump administration, arguing that President Donald Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) when imposing broad tariffs and that the company should be able to reclaim duties if the Supreme Court rules those tariffs unconstitutional. [10]
An Associated Press report, republished by the Omaha Daily Record, adds key details: [11]
- Costco filed its complaint in the U.S. Court of International Trade in New York, making it the largest company yet to seek tariff refunds through litigation.
- The lawsuit is partly a race against the clock: once Customs and Border Protection “liquidates” Costco’s tariff bills — a process expected to begin around December 15 — the company has 180 days to protest each bill.
- The tariffs at issue have collectively raised around $90 billion from U.S. importers.
Trade attorney commentary in the piece stresses that Costco wants to ensure it has a judgment in place before a Supreme Court ruling, so it doesn’t risk missing deadlines to reclaim the money.
Why the lawsuit matters for Costco’s margins and valuation
An extended FXEmpire breakdown frames the case as one of the most politically charged moves by a large U.S. retailer in years: [12]
- Tariffs under the emergency powers law reached as high as 50% for some partners and 145% for Chinese goods at points during 2025.
- Costco, which generated roughly $275.2 billion in annual revenue and operates on merchandise margins around 11%, could see meaningful profit pressure if it cannot recover what it views as unlawful tariffs.
- The Supreme Court heard arguments in early November, with justices from both sides of the aisle questioning whether IEEPA really supports such sweeping measures.
For investors, the lawsuit introduces a binary, slow‑moving catalyst:
- If the Supreme Court ultimately strikes down the tariffs and Costco wins refund rights, the retailer could reclaim a substantial amount of cash, easing margin pressures.
- If the court upholds the tariffs or limits refunds, Costco may be stuck absorbing higher import costs while still trying to keep club prices low.
FXEmpire notes that the December 11 Q1 earnings call (after Thursday’s close) will function as Costco’s first extended public explanation of its legal strategy, financial exposure, and risk management around tariffs — a big reason the stock is under such close scrutiny this week. [13]
Sales momentum: strong November, solid Q1 sales ahead of earnings
While legal headlines grab attention, the operating momentum heading into earnings remains broadly positive.
November and Q1 sales: e-commerce and traffic look healthy
A detailed piece from Barron’s reports that Costco’s fiscal Q1 2026 sales, for the quarter ended November 23, reached about $65.98 billion, up 8.2% year‑over‑year (excluding membership fees, which will be disclosed with earnings on December 11). Same‑store sales climbed 6.4%, beating expectations of 5.8%, while digitally enabled sales jumped 20.5%. [14]
For November alone (the month ended November 30), Barron’s and 24/7 Wall St. highlight: [15]
- Net sales: roughly $23.6–23.64 billion, up about 8.1% vs. a year ago
- Total comparable sales: around 6.9%, vs. 6.6% in October
- Ex‑fuel comps: about 6.4%
- Foot traffic: up roughly 3.8% worldwide, with the average ticket up ~3%
These figures suggest that, despite a softer macro backdrop, Costco is still driving mid‑single‑digit traffic growth and low‑single‑digit ticket increases, supported by strong e‑commerce growth.
FXEmpire further notes that in Q4 2025, Costco delivered $86.16 billion in net sales, about an 8% increase, with net income of roughly $2.61 billion, EPS of $5.87, and double‑digit growth in membership fees after a 2024 fee hike. [16]
Membership model still doing the heavy lifting
Several recent analyses emphasise Costco’s membership flywheel:
- 24/7 Wall St. points out that the company has raised its quarterly dividend every year for 21 years and periodically issues large special dividends, supported by recurring membership revenue and disciplined capital allocation. [17]
- FXEmpire estimates that renewal rates sit near 93% in the U.S. and Canada, providing unusually stable cash flows even in a choppy macro environment. [18]
- StockAnalysis data confirm Costco’s return on equity near 31% and free cash flow of roughly $7.8 billion over the last year, underscoring how profitable the membership warehouse model remains. [19]
Special dividend and stock split buzz: hope vs. reality
No discussion of Costco this week is complete without addressing the special dividend and stock split chatter.
What 24/7 Wall St. and others are saying
A widely shared 24/7 Wall St. article published December 8 asks bluntly, “Will Costco Announce a Special Dividend on Dec. 11?” and comes down on the skeptical side: [20]
- The author argues that Costco usually unveils special dividends when business momentum and share performance are better than average.
- With shares down for 2025 and comps decelerating from prior years, the article concludes that a special dividend is “unlikely” this time, despite Costco’s large cash balance and strong balance sheet.
At the same time, a price‑prediction piece from the same outlet earlier in December outlines a moderate upside scenario for the stock over the next year and more aggressive gains out to 2030, albeit with the caveat that Costco’s premium valuation leaves little room for disappointments. [21]
On the more optimistic side, an Invezz analysis notes that Evercore analysts expect management could pair Q1 earnings with both a special dividend and a stock split, which would be Costco’s first split since 2000 and its fourth overall, potentially igniting renewed investor enthusiasm. [22]
MarketScreener, citing MT Newswires, similarly reported on December 9 that an Oppenheimer note sees potential share-price benefits if Costco announces a special dividend or split, though the full report sits behind a paywall. [23]
How overvalued is Costco?
Several outlets stress that even after the recent pullback, Costco is not cheap by classic metrics:
- Invezz pegs Costco’s forward P/E near 44–45, far above a sector median closer to 15 and even above its own elevated five-year average. [24]
- StockAnalysis estimates an EV/EBITDA of around 30 and EV/FCF near 49, indicating investors are still paying a hefty price for Costco’s growth and stability. [25]
- AInvest, in a recent note on Costco’s “strategic dilemma,” warns that a P/E around 50, combined with tariff uncertainty and regulatory risk, makes the stock vulnerable if growth slows or headline risk escalates. [26]
The upshot: a special dividend or split is possible but not guaranteed, and the more the stock runs on that expectation alone, the sharper the reaction could be if management decides to stay conservative.
Legal and political overhang: what to listen for on the Dec. 11 call
FXEmpire’s deep dive into the tariff lawsuit outlines what the December 11 earnings call must address for investors: [27]
- Size of the potential refund
- Costco hasn’t disclosed its precise tariff exposure. Investors will want at least ballpark figures or a framework for thinking about the upside if the Supreme Court strikes down the duties.
- Timeline and cash‑flow impact
- The Supreme Court decision is expected sometime in early 2026. Until then, Costco continues paying contested tariffs, tying up capital and pressuring gross margins.
- Risk of political retaliation or regulatory friction
- Few large retailers have challenged the administration so publicly. FXEmpire flags the risk that rivals who stay neutral could enjoy smoother regulatory relations.
- Margin protection strategy
- Costco has already leaned on private‑label Kirkland Signature, supply‑chain shifts, and e‑commerce to defend margins. Investors will be watching for quantitative updates on these efforts.
This legal and political context is likely to be at least as important as whether Costco beats consensus by a few cents on EPS.
Analyst views and quant scores: bullish fundamentals, cautious tone
Wall Street ratings and price targets
Across major data providers, the consensus view on Costco remains positive:
- StockAnalysis reports an average 12‑month price target of about $1,071, roughly 21% above the latest close, with a “Buy” consensus rating from 24 analysts. [28]
- MarketBeat’s institutional coverage shows a “Moderate Buy” rating, with 19 analysts rating Costco a Buy and 13 a Hold, and an average target near $1,023. Several firms, including Bernstein and Gordon Haskett, have trimmed price objectives recently but still sit above the current price. [29]
A Zacks Investment Research note titled “Should Costco Stock Be in Your Portfolio Ahead of Q1 Earnings?” argues that despite short‑term underperformance and a premium valuation, Costco’s traffic growth, membership strength and efficient operations make it a reasonable choice for investors seeking stability with moderate growth, though some volatility is possible around earnings. [30]
Quantitative “guru” analysis
A fresh Validea “guru” report, published on Nasdaq under the headline “COST Quantitative Stock Analysis – Warren Buffett,” scores Costco very highly under a Buffett‑style “Patient Investor” model: [31]
- Passes screens for earnings predictability, return on equity, return on total capital, free cash flow, debt service, and use of retained earnings
- Neutral on share repurchases
- Fails only on an “initial rate of return” metric, reflecting the high starting valuation
StockAnalysis adds that Costco boasts an Altman Z‑score of 9.77 (very low bankruptcy risk) and a Piotroski F‑score of 8, both consistent with a financially strong, well‑managed company. [32]
Technical picture: key levels to watch on December 10
Short‑term traders will wake up on December 10 with Costco sitting in a gentle downtrend but hugging support.
According to StockInvest’s daily update for December 9: [33]
- COST has been labeled a “sell candidate” since December 4, with a modest loss over that period.
- The stock still sits within a falling short‑term trend channel, with their model projecting a potential ~5.5% decline over the next three months, suggesting a possible trading range in the low‑ to mid‑$800s if the trend persists.
- Immediate support is around $887.50, very close to Tuesday’s close, while nearby resistance sits in the $903–$915 area.
- For Wednesday, December 10, StockInvest’s model expects a “fair opening price” near $886.30 and an intraday swing range between roughly $881 and $896, a potential move of about ±1.7% from the prior close.
They also flag falling volume on a green day, a classic sign of weakening buying pressure, even though volatility in the name remains relatively low.
From a longer‑term perspective, StockAnalysis shows Costco trading below its 50‑day moving average (~$919) and well under its 200‑day (~$960), reinforcing the idea that the stock is in a consolidation or mini‑correction, not a runaway uptrend — at least for now. [34]
Other headlines investors are watching
Beyond tariffs, earnings and dividends, a few additional stories are on traders’ radar:
- Board refresh: Costco recently nominated former U.S. Commerce Secretary Gina Raimondo to its board, adding heavyweight trade and regulatory experience at exactly the moment its tariff lawsuit is heating up. [35]
- New distribution capacity: Rock Hill, South Carolina, approved an infrastructure‑incentive package for a new Costco distribution center near I‑77, which will serve the Carolinas and Georgia. Costco will fund key infrastructure upgrades while local tax revenues are partially redirected to the school district, a deal that sparked debate but ultimately passed. [36]
- Institutional interest: A recent MarketBeat‑summarised filing shows AXA S.A. acquiring shares of Costco, adding another large institutional name to the shareholder list. [37]
- Food safety recall: Regional reports highlighted a macadamia nut recall at a Hawaii Costco warehouse due to potential Salmonella contamination. While limited in scope, such events can briefly weigh on sentiment and highlight operational and reputational risk. [38]
What to know before the market opens on December 10, 2025
If you’re looking at Costco pre‑market on Wednesday, here are the main things to keep in mind:
1. Earnings countdown: Q1 FY 2026 lands Thursday after the close
- Costco is scheduled to report Q1 FY 2026 earnings after the market close on Thursday, December 11, with a conference call around 5:00 p.m. ET. [39]
- Consensus expectations cluster around $4.24–$4.28 EPS and ~$67.1–$67.15 billion in revenue, implying low double‑digit earnings growth and high single‑digit sales growth. [40]
Short‑term traders may adjust positions before the report based on perceived odds of a beat, especially as options markets price in roughly 2% post‑earnings swing potential according to StockInvest. [41]
2. Tariff lawsuit is now a central part of the investment story
- Expect questions about the lawsuit to dominate Q&A on Thursday’s call — and to influence trading well before then as new commentary and legal analyses hit the tape. [42]
- Any early sign of support from other large retailers or hints about the size of the contested tariff bill could move the stock.
3. Fed decision and macro news could overshadow stock‑specific drivers intraday
- The Fed’s expected rate cut on Wednesday, plus Powell’s press conference, may steer overall market direction, impacting high‑quality, high‑multiple names like Costco even if there’s no new company‑specific news. [43]
4. Technical levels present a tight near‑term trading range
- With support just below the current price and resistance in the low $900s, day traders will likely key off the $887–$915 zone highlighted by short‑term technical models. [44]
5. Expectations for special dividend or stock split are high — but far from certain
- Evercore and others have floated the possibility of a special dividend and stock split, while 24/7 Wall St. and some macro‑focused analysts warn that 2025’s underperformance and softer comps reduce the odds. [45]
If management does nothing on this front, there is real risk of a “sell the news” reaction after earnings, especially if results are merely in line with expectations.
How different investors might think about Costco right now
Nothing here is personalized financial advice, but based on current coverage:
- Short‑term traders will likely focus on:
- How COST trades around its $887 support and $903–$915 resistance on December 10
- The Fed announcement and Powell’s tone
- Any new headlines on the tariff lawsuit or special‑dividend speculation
- Long‑term investors are weighing a more complicated mix:
- A world‑class retailer with high returns on capital, a net cash balance sheet and 90%+ membership renewal rates [46]
- Slowing — but still solid — comparable sales and an increasingly competitive warehouse and e‑commerce landscape
- A headline‑driven legal catalyst that could either unlock a sizable tariff refund or cement higher cost structures
- A valuation that assumes years of high‑single‑digit growth, leaving less room for error
For now, most research desks — from Zacks to StockAnalysis to MarketBeat — still see Costco as a high‑quality core holding, but with elevated short‑term risk heading into Thursday’s earnings and the looming Supreme Court decision.
References
1. stockinvest.us, 2. stockinvest.us, 3. www.marketbeat.com, 4. stockanalysis.com, 5. 247wallst.com, 6. www.marketbeat.com, 7. stockanalysis.com, 8. www.nasdaq.com, 9. www.investopedia.com, 10. www.retailcustomerexperience.com, 11. www.omahadailyrecord.com, 12. www.fxempire.com, 13. www.fxempire.com, 14. www.barrons.com, 15. www.barrons.com, 16. www.marketbeat.com, 17. 247wallst.com, 18. www.fxempire.com, 19. stockanalysis.com, 20. 247wallst.com, 21. 247wallst.com, 22. www.tradingview.com, 23. www.marketscreener.com, 24. www.tradingview.com, 25. stockanalysis.com, 26. www.ainvest.com, 27. www.fxempire.com, 28. stockanalysis.com, 29. www.marketbeat.com, 30. www.tradingview.com, 31. www.nasdaq.com, 32. stockanalysis.com, 33. stockinvest.us, 34. stockanalysis.com, 35. stockanalysis.com, 36. www.wrhi.com, 37. www.marketbeat.com, 38. www.marlerblog.com, 39. www.marketbeat.com, 40. www.tradingview.com, 41. stockinvest.us, 42. www.fxempire.com, 43. www.investopedia.com, 44. stockinvest.us, 45. www.tradingview.com, 46. stockanalysis.com
