"Today, the stock is down approximately 3.5% year-to-date, while the S&P 500 has gained about 16.1%, creating a gap of 19.6 percentage points between the two. This divergence in performance was caused by several factors, including investor enthusiasm and expectations following a strong 2024, which led to sky-high valuations. Costco traded at 50 times earnings at the start of the year, well ahead of rivals, but that was quickly deflated on slower comparable sales growth as consumers turned cautious."
"Last week, Costco reported its fiscal first quarter 2026 results and showed renewed strength. Net sales increased 8.2% to $65.98 billion from $60.99 billion last year. Earnings of $4.50 per share beat analyst expectations of $4.28 per share as comparable sales grew 6.4%, while e-commerce sales surged 20.5%. Membership fees also rose 14%, reflecting strength in U.S. and Canada renewals, which came in at 92.2%, only a tiny slip from 92.3% in Q4."
Costco underperformed the S&P 500 in 2025, leaving a roughly 19.6 percentage-point gap as the S&P climbed while Costco fell about 3.5% year-to-date. Elevated expectations after a strong 2024 pushed valuations to about 50 times earnings, which proved vulnerable when comparable sales slowed. Fiscal Q1 2026 showed improvement: net sales rose 8.2% to $65.98 billion, earnings beat estimates at $4.50 per share, comparable sales grew 6.4%, and e-commerce jumped 20.5%. Membership fees increased 14%, with U.S. and Canada renewals at 92.2%, though renewal rates are expected to dip modestly in coming quarters. Historically, Costco has outperformed the S&P in 64% of the past 25 years, often by large margins when it wins.
Read at 24/7 Wall St.
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