Costco Wholesale Corporation (NASDAQ: COST) heads into the Monday, December 22, 2025 session with a familiar setup: the business fundamentals look sturdy, but the stock is still wrestling with a valuation debate after a year of relative underperformance.
The latest available quote has Costco shares around $855.62, slightly lower on the most recent update (with markets closed over the weekend).
Below is what matters most before the opening bell.
Costco stock snapshot: why COST is in focus right now
Costco just delivered another quarter of solid growth, but investors have been more demanding than “solid” in 2025—especially for mega-cap, premium-multiple retailers. That tension is showing up in the stock’s choppy reaction to good news: earnings beats and strong sales trends have not automatically translated into sustained upside.
A recent “rare sell” call from Roth Capital sharpened the debate, pointing to softer membership and traffic trends at the margin, plus intensifying competition from Sam’s Club and BJ’s. [1]
The core fundamental update: Costco’s Q1 fiscal 2026 results and 10‑Q details
Costco’s first quarter of fiscal 2026 (ended Nov. 23, 2025) continued the company’s steady growth pattern:
- Net sales:$65.98 billion (up 8.2%) [2]
- Total revenue:$67.307 billion [3]
- Net income:$2.001 billion [4]
- Diluted EPS:$4.50 [5]
On the earnings beat, Reuters reported Costco topped expectations on both revenue and profit, with demand supported by value-seeking shoppers ahead of the holiday season. Reuters also highlighted Costco’s same-day delivery performance, including partnerships with Instacart in the U.S. and UberEats/DoorDash internationally. [6]
Margins stayed tight (as designed), but stable
Costco’s gross margin remains characteristically thin—part of what drives its “value” brand equity. In the quarter, gross margin was 11.32%, up slightly versus the prior year quarter. [7]
Digital momentum remains a bright spot
In Costco’s 10‑Q, the company reported digitally-enabled comparable sales increased 21% in Q1. [8]
Costco also noted it changed its reporting approach, shifting the “e-commerce comp” framing to “digitally-enabled comparable sales,” which includes digitally initiated orders fulfilled via warehouses or distribution centers, plus Costco Travel. [9]
Membership trends: the KPI that matters most for Costco investors
If you’re watching Costco stock, it’s hard to overstate how central membership economics are to the bull case—and to the current pushback around valuation.
From the Q1 filing:
- Membership fees:$1.329 billion (up from $1.166 billion) [10]
- Total paid members:81.4 million (vs. 77.4 million a year earlier) [11]
- Total cardholders:145.9 million (vs. 138.8 million) [12]
- Renewal rate:92.2% (U.S. & Canada) and 89.7% worldwide [13]
Importantly, Costco itself attributed some renewal-rate pressure to a mix shift: a higher number of memberships sold online (including digital promotions) entering the renewal calculation, and those cohorts renewing “at a slightly lower rate on average.” [14]
Costco also reiterated that the membership fee increase in the U.S. and Canada took effect Sept. 1, 2024, and because membership revenue is recognized ratably, the annualized benefit is still flowing through results—though Costco said the fee increase accounted for slightly less than half of membership income growth in Q1 FY26. [15]
A fresh Business Insider analysis published Dec. 22 underscored why this matters: Costco’s model depends heavily on membership fees as a high-margin profit engine, and the company has tightened enforcement against unauthorized membership sharing to protect that revenue stream. [16]
What to watch Monday: Any headlines or analyst notes about membership renewal trajectories, paid member growth quality (especially digitally-acquired cohorts), and Executive-tier penetration—because that’s where the market is currently most sensitive.
Holiday read-through: Costco’s November sales update
Costco’s most recent official sales update (released Dec. 3, 2025) gave investors a key read into early holiday season momentum:
- November (4 weeks ended Nov. 30, 2025) net sales:$23.64 billion, up 8.1% [17]
- Total company comparable sales (4-week period):+6.9% [18]
- Digitally-enabled comps (4-week period):+16.6% [19]
- Total company comparable sales ex gas & FX (4-week period):+6.4% [20]
This matters because the market is still trying to answer a simple question about Costco stock:
Is the business “merely strong,” or strong enough to justify a premium multiple again?
Tariffs and litigation: a real headline risk (and a real operational test)
One of the most consequential current narratives around Costco isn’t an earnings line item—it’s the tariff environment and how it could affect pricing, assortment, and margins.
Costco’s lawsuit to preserve refund rights
Reuters reported Costco sued the U.S. government to ensure it can claim potential tariff refunds if courts ultimately reject the legal basis for certain tariffs imposed under emergency powers. Reuters noted Costco said legal uncertainty and timing issues could otherwise jeopardize its ability to recover what it paid. [21]
Axios also described a broader, fast-moving scramble among large companies to preserve tariff refund claims—highlighting Costco as one of the major names in that growing fight. [22]
Costco’s own filings acknowledge tariff exposure
In its 10‑Q discussion of operations, Costco explicitly noted that government actions relating to tariffs can affect merchandise costs, and that higher tariffs are more likely to adversely impact results than improve them. It also described typical mitigations: supplier collaboration, earlier/bulk purchasing, sourcing where items are sold, and selectively passing costs to members. [23]
What to watch Monday: Any new legal updates, trade headlines, or retailer commentary that changes assumptions about tariff duration, refund likelihood, or how aggressively Costco may need to manage price gaps versus competitors.
Expansion and capital return: Costco’s “slow and steady” growth plan continues
Costco’s store growth is not just a long-term story; it also shapes near-term membership growth, comps, and the “cannibalization” question analysts debate.
From the Q1 10‑Q:
- Warehouses worldwide:921 as of Nov. 23, 2025 [24]
- Q1 openings:8 new warehouses (including 1 relocation) [25]
- Planned for the remainder of FY26:25 additional new warehouses (including 4 relocations) [26]
- FY26 capex intention: about $6.5 billion [27]
On shareholder returns:
- Costco declared a $1.30 quarterly dividend (declared Oct. 15, paid Nov. 14). [28]
- Under its $4.0 billion repurchase authorization (expires Jan. 2027), Costco repurchased 225,000 shares in Q1 at an average price of $932.02, with $1.752 billion remaining under the plan at quarter-end. [29]
Analyst forecasts and price targets: bullish consensus, but a louder valuation debate
Despite Costco’s fundamentals, valuation has become the market’s main battleground in late 2025.
Benzinga’s aggregation shows:
- Consensus rating:Buy
- Consensus price target: about $1,053
- Low target:$769 (Roth Capital, Dec. 15, 2025) [30]
That low target is the one driving much of the conversation because it represents a clear minority view—and because it reflects the market’s broader anxiety: even small disappointments can hit expensive, high-expectation stocks harder than they hit “cheap” ones.
MarketWatch summarized the Roth downgrade as a contrarian call citing softer membership trends, rising competition, and demographic shifts that could weigh on the bulk-buying model over time. [31]
Key dates after Dec. 22: what investors should keep on the radar
Costco’s investor relations calendar has several near-term “known catalysts”:
- December Sales Results:Jan. 7, 2026 (1:15 p.m. PT) [32]
- Shareholders’ Meeting:Jan. 15, 2026 (2:00 p.m. PT) [33]
- Q2 FY2026 Earnings Call:Mar. 5, 2026 (2:00 p.m. PT) [34]
Bottom line before the opening bell
Going into Monday’s open, Costco stock is best understood as a “great business vs. great price” debate:
- The business: strong comps, rising paid memberships, resilient renewal rates, and accelerating digitally-enabled sales. [35]
- The stock: sensitive to valuation and headline risks (tariffs/litigation), and to any sign that membership quality or traffic is cooling more than expected. [36]
References
1. www.marketwatch.com, 2. investor.costco.com, 3. www.sec.gov, 4. www.sec.gov, 5. www.sec.gov, 6. www.reuters.com, 7. www.sec.gov, 8. www.sec.gov, 9. www.sec.gov, 10. www.sec.gov, 11. www.sec.gov, 12. www.sec.gov, 13. www.sec.gov, 14. www.sec.gov, 15. www.sec.gov, 16. www.businessinsider.com, 17. investor.costco.com, 18. investor.costco.com, 19. investor.costco.com, 20. investor.costco.com, 21. www.reuters.com, 22. www.axios.com, 23. www.sec.gov, 24. www.sec.gov, 25. www.sec.gov, 26. www.sec.gov, 27. www.sec.gov, 28. www.sec.gov, 29. www.sec.gov, 30. www.benzinga.com, 31. www.marketwatch.com, 32. investor.costco.com, 33. investor.costco.com, 34. investor.costco.com, 35. investor.costco.com, 36. www.marketwatch.com
