Costco At $1,000: Buy, Sell or Hold?

"Costco runs 924 warehouses worldwide and serves 82.1 million paid members, anchoring a fee-driven flywheel that generated $1.35 billion in membership income last quarter. The shares first touched four digits in May 2025 at $1,000.76, then dipped to $877.05 by December before grinding back. The result is a stock that has compounded earnings while testing investor patience."

"The Q2 FY26 report was strong. Net income rose 13.8% to $2.04 billion, comparable sales climbed 7.4%, and digitally-enabled comps surged 22.6%. Membership fee income jumped 13.6%, while the worldwide renewal rate held at 89.7%. Executive membership penetration hit 75.8% of sales, with 40.4 million executive members now driving the most profitable tier."

"Costco trades at a trailing P/E of 52 and a forward multiple of 46, with a PEG of 5.12 and a dividend yield of 0.51%. That is growth-stock pricing on a consumer staple. Over the past year, COST has returned 0.67% versus 30.54% for the S&P 500. Management flagged "new global tariffs for at least the next 150 days," rising labor and healthcare costs, FX volatility, and a Q2 core margin that was lower by 3 basis points year over year."

Costco operates 924 warehouses worldwide and serves 82.1 million paid members, supported by membership fee income. Membership fee income reached $1.35 billion last quarter, with renewal rates at 89.7%. Net income rose 13.8% to $2.04 billion, comparable sales increased 7.4%, and digitally enabled comparable sales grew 22.6%. Executive membership penetration reached 75.8% of sales, with 40.4 million executive members. The company targets 942 warehouses by fiscal year-end and plans 30-plus new openings annually. Despite these results, the stock has returned about 0.67% over the past year, while trading at a trailing P/E of 52 and forward P/E of 46, with a low dividend yield of 0.51%. Management cited tariffs, rising labor and healthcare costs, FX volatility, and slightly lower core margins.

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