Is Costco (COST) Stock Still a Buy? Three Reasons Point to Yes
**Costco Wholesale (NASDAQ: COST)** continues to be a favorite among shoppers and investors alike. The company's rising sales, expanding earnings, and growing e-commerce business have contributed to a significant increase in its share price over the past five years. While some investors expressed concerns about the latest quarter, the overall outlook for **Costco** remains positive.
Impressive Growth Despite Analyst Concerns
While some investors sold shares due to the company missing analysts' same-store-sales estimates for Q4, which ended August 31, the broader picture reveals impressive growth. Same-store sales were still up 6.5% year-over-year, and key financial metrics exceeded expectations.
- Revenue reached $86.16 billion, an 8% increase and ahead of the Wall Street consensus estimate of $86.06 billion.
- Earnings per share (EPS) rose 11% to $5.87, surpassing analysts' consensus estimate of $5.80.
- Membership income increased by 14% to $1.7 billion.
These results demonstrate Costco's ability to navigate challenging economic conditions and deliver strong financial performance. By offering new items from its **Kirkland Signature** private-label brand, Costco successfully managed tariffs and continued its growth trajectory.
E-commerce Expansion and Continued Store Growth
Unlike some retailers struggling to balance online and physical presence, **Costco** excels in both areas. The company's e-commerce business is expanding rapidly, while its store footprint continues to grow.
E-commerce sales rose by 13.5% in the quarter, accounting for approximately 7% of total sales, with website traffic jumping 27%. Annually, online sales increased by 15% in fiscal 2025, reaching $19.6 billion. This growth is attributed to Costco's expanded online product offerings, improved search functionality, and innovative features such as online waiting rooms for popular items.
In addition to its strong online presence, Costco is actively expanding its physical store network. With 24 new stores opened this year, the total now stands at 914 worldwide. **Costco** opened nine stores in Q4 alone and plans to add 30 more in 2026, potentially driving membership income even higher.
Attracting Younger, Affluent Customers and Maintaining High Renewal Rates
**Costco** is successfully broadening its customer base, attracting younger shoppers with higher disposable incomes and fostering strong customer loyalty.
Approximately half of new membership sign-ups each year come from individuals under 40. With the average Costco customer having an annual household income of approximately $125,000, the company benefits from a stable customer base that can maintain spending even during uncertain economic times.
Furthermore, **Costco** boasts impressive membership renewal rates, with 93% of U.S. and Canadian customers renewing their memberships. This high retention rate ensures a consistent revenue stream and underscores the company's ability to maintain long-term customer relationships.
With its consistent membership-income growth, rising sales and earnings, ability to attract new customers, and high renewal rates, there are many compelling reasons to consider **Costco Wholesale (COST)** as a long-term investment.
