Costco Posts Strong Quarter but Stock Drops Over Premium Valuation

Surging online sales, higher memberships and record gasoline volumes drove results, leaving investors to weigh whether a near-42x forward P/E is justified.

Overview

Costco reported fiscal third-quarter revenue of $69.15 billion and adjusted EPS of $4.93, reflecting double‑digit top‑line growth and a 15% rise in per‑share earnings.
Same‑store sales rose meaningfully after adjusting for gasoline and currency, with U.S. comps up about 6.8% and broad gains across fresh food and nonfood categories.
E‑commerce accelerated, with digital revenue up 21.5% and app and website traffic rising about 37%, and personalized recommendations boosting online sales by roughly $5 billion.
Memberships strengthened, driving membership‑fee revenue up more than 10% as paid households and higher‑tier executive memberships grew and renewal rates remained high.
The stock fell after the report as investors focused on a forward P/E near 42 times and compared Costco’s premium to peers, even as the company pursues new warehouses and stepped‑up digital and AI investments.