Costco Wholesale (NASDAQ:COST) Stock Price Up 2.9% on Earnings Beat

Key Points

• Costco shares rose 2.9% after the company reported quarterly EPS of $6.75, beating expectations of $6.54, while revenue of $95.72 billion also exceeded forecasts.
• Sales momentum remained broad-based, with comparable sales up 9.4% and digitally enabled comparable sales rising 19.5%; Costco also plans to accelerate expansion with 33 new warehouses targeted for fiscal 2027.
• Despite strong results and mostly positive analyst ratings, Costco’s elevated valuation remains a risk, while tariff refunds and margin pressures raise questions about the quality and sustainability of earnings growth.

Shares of Costco Wholesale Corporation (NASDAQ:COST - Get Free Report) shot up 2.9% during mid-day trading on Friday after the company announced better than expected quarterly earnings. The company traded as high as $925.14 and last traded at $922.77. 4,600,956 shares were traded during trading, an increase of 110% from the average daily volume of 2,195,869 shares. The stock had previously closed at $896.48.

The retailer reported $6.75 EPS for the quarter, beating the consensus estimate of $6.54 by $0.21. Costco Wholesale had a return on equity of 28.04% and a net margin of 3.01%.The company had revenue of $95.72 billion during the quarter, compared to analysts' expectations of $94.97 billion.

Costco Wholesale Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Friday, August 7th. Investors of record on Friday, July 24th were given a $1.47 dividend. The ex-dividend date of this dividend was Friday, July 24th. This represents a $5.88 annualized dividend and a dividend yield of 0.6%. Costco Wholesale's dividend payout ratio (DPR) is currently 29.58%.

Trending Headlines about Costco Wholesale

Here are the key news stories impacting Costco Wholesale this week:

• Positive Sentiment: Solid quarterly beat: Costco reported $6.75 in adjusted diluted EPS versus the $6.54 consensus estimate, while revenue reached $95.72 billion, above expectations of $94.97 billion. Net income rose 14.9% to nearly $3 billion. Costco Ends Its Fiscal Year on a High Note, Eyes Big Expansion
• Positive Sentiment: Broad-based sales momentum: Fourth-quarter comparable sales increased 9.4%, and digitally enabled comparable sales jumped 19.5%. Pharmacy, gasoline, essentials and membership growth supported demand, while management highlighted stronger digital engagement and younger members. COST Q4 Earnings Beat Estimates on Sales and Digital Strength
• Positive Sentiment: Expansion remains a catalyst: Costco plans to accelerate warehouse openings, targeting 33 new locations in fiscal 2027. The company ended fiscal 2026 with 939 warehouses, reinforcing its long-term growth opportunity. Costco Q4 Earnings Call Highlights Expansion and Digital Growth
• Neutral Sentiment: Tariff refund boosted results: Costco received $184 million in tariff refunds and said the majority would be passed to members through lower prices. The benefit contributed approximately $0.15 per share, meaning the underlying earnings beat was somewhat smaller. Costco Receives $184M in Tariff Refunds
• Negative Sentiment: Premium valuation limits upside: Analysts noted that COST trades at an elevated earnings multiple, leaving little room for execution disappointments. Several firms lowered price targets after the report, despite generally retaining positive or neutral ratings. Costco: Great Quarter, But The Valuation Still Prices In Excellence
• Negative Sentiment: Profit-quality concerns: Membership-fee growth slowed sharply after the benefit from the 2024 fee increase began to fade. In addition, memory-cost inflation produced a $152 million electronics-related charge, highlighting margin pressure. Memory Inflation Is Hitting Costco’s Electronics Business

Analyst Ratings Changes

A number of equities analysts have weighed in on the stock. DA Davidson increased their price target on shares of Costco Wholesale from $1,000.00 to $1,040.00 and gave the stock a "neutral" rating in a research note on Friday. UBS Group reissued a "buy" rating on shares of Costco Wholesale in a research note on Thursday, September 17th. Mizuho dropped their price objective on Costco Wholesale from $1,100.00 to $1,065.00 and set an "outperform" rating for the company in a report on Friday. Evercore reaffirmed an "outperform" rating on shares of Costco Wholesale in a research report on Tuesday. Finally, BMO Capital Markets reiterated an "outperform" rating on shares of Costco Wholesale in a report on Friday. Twenty-three investment analysts have rated the stock with a Buy rating, ten have given a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus price target of $1,046.77.

Institutional Investors Weigh In On Costco Wholesale

Large investors have recently made changes to their positions in the business. Graybill Wealth Management LTD. lifted its position in shares of Costco Wholesale by 0.3% in the 4th quarter. Graybill Wealth Management LTD. now owns 3,194 shares of the retailer's stock worth $2,754,000 after acquiring an additional 10 shares during the period. Palisade Asset Management LLC lifted its position in Costco Wholesale by 1.4% in the fourth quarter. Palisade Asset Management LLC now owns 702 shares of the retailer's stock worth $605,000 after purchasing an additional 10 shares during the period. Wealth Effects LLC boosted its stake in Costco Wholesale by 1.2% during the first quarter. Wealth Effects LLC now owns 874 shares of the retailer's stock worth $871,000 after buying an additional 10 shares in the last quarter. Folger Nolan Fleming Douglas Capital Management Inc. boosted its stake in Costco Wholesale by 1.8% during the first quarter. Folger Nolan Fleming Douglas Capital Management Inc. now owns 551 shares of the retailer's stock worth $549,000 after buying an additional 10 shares in the last quarter. Finally, First National Bank of Hutchinson raised its stake in shares of Costco Wholesale by 0.9% in the 1st quarter. First National Bank of Hutchinson now owns 1,098 shares of the retailer's stock valued at $1,094,000 after buying an additional 10 shares in the last quarter. Institutional investors and hedge funds own 68.48% of the company's stock.

Costco Wholesale Trading Up 2.9%

The business's 50 day moving average price is $934.32 and its 200-day moving average price is $968.18. The company has a market cap of $409.23 billion, a price-to-earnings ratio of 46.42, a PEG ratio of 3.78 and a beta of 0.86. The company has a debt-to-equity ratio of 0.17, a quick ratio of 0.61 and a current ratio of 1.07.

About Costco Wholesale

Costco Wholesale Corporation operates membership-based warehouse clubs that offer a broad selection of merchandise at generally competitive prices. Its product range includes groceries, fresh foods, apparel, appliances, electronics, furniture, jewelry, hardware, and seasonal goods, along with private-label products sold under the Kirkland Signature brand.

The company also provides a variety of ancillary services, including gasoline stations, pharmacies, optical centers, hearing-aid centers, food courts, tire centers, and travel services.

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