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Costco Growth Holds as Shares Recover From a Lull

A rich valuation makes the shares more reactive to any cooling in discretionary spending.

Overview

  • Costco shares are up about 15% this year, outpacing the market’s roughly 8% gain.
  • That rebound follows a year when the stock was roughly flat while the S&P 500 rose about 31%.
  • Recent quarters showed steady gains, with revenue up around 8% to 9% year over year and comparable sales rising 5.7% to 7.4%.
  • In fiscal Q2 ended Feb. 15, membership income rose 13.6% and renewal rates reached 92.1% in the U.S. and Canada and 89.7% worldwide, which management links to more online signups.
  • Digital sales kept accelerating as Costco leaned on partners like Instacart and curbside pickup, even as the stock trades at about 52 times trailing earnings.