Costco Wholesale Corporation’s (COST Quick QuoteCOST - Free Report) August sales report brings fresh insights into the retail giant’s performance. As a leader in the warehouse club space with a track record of steady growth, Costco stock has long been a favorite among investors. However, with the latest figures in hand, the big question now is whether it’s time to buy, hold or sell Costco stock after the August sales update.

Decoding Costco’s August Sales Report

Costco’s membership-driven model remains a core strength, with high renewal rates ensuring a dependable revenue stream. Its efficient supply chain and bulk purchasing power enable competitive pricing, reinforcing its strong market position. This combination of customer loyalty and operational efficiency continues to give Costco an advantage in a competitive retail landscape.

For the four weeks ended Aug. 31, 2025, Costco reported a 6.3% year-over-year increase in total company comparable sales. Regionally, comparable sales rose 6.1% in the United States, 6.8% in Canada and 6.7% in Other International markets. E-commerce also remained a bright spot, with comparable sales surging 18.4%. (Read: Costco's Sales Surge 6.3% in August: What's Behind the Winning Streak?)

As a result, Costco's net sales for August increased 8.7% to $21.56 billion, up from $19.83 billion in the same period last year. This follows sales improvements of 8.5% and 8% reported in July and June, respectively, reflecting a strong and consistent sales performance over the past few months.

A Sneak Peek Into Costco’s Tailwinds

Costco’s membership-based business model continues to be a pillar of its growth strategy. With consistently high renewal rates, the company enjoys strong customer loyalty that provides a recurring revenue stream. This helps Costco navigate economic uncertainties better than many peers. The steady expansion of executive memberships, which carry higher fees and generate stronger engagement, further strengthens this model, contributing meaningfully to overall profitability.

The company has been steadily evolving beyond its brick-and-mortar roots by enhancing its digital capabilities and fulfillment network. Investments in e-commerce platforms, delivery services and flexible payment options like Buy Now Pay Later are enabling the company to create a seamless omnichannel experience. This integrated approach not only attracts digitally savvy shoppers but also deepens engagement with existing members by offering greater convenience and value.

Costco’s ability to maintain competitive pricing while preserving healthy margins stems from its rigorous cost control and operational efficiency. The company’s bulk purchasing power and efficient supply chain management allow it to mitigate inflationary pressures and pass savings on to customers. These disciplined practices reinforce Costco’s reputation for value, strengthening customer trust.

The growing success of Kirkland Signature, Costco’s private-label brand, highlights the company’s ability to blend quality with affordability. By expanding sourcing closer to its key markets, Costco is reducing supply-chain costs while ensuring consistent product availability. The brand’s rising penetration not only supports margin expansion but also enhances Costco’s competitive edge, differentiating it further in the retail landscape.

How Consensus Estimates Stack Up for Costco

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 8.2% and 11.6%, respectively. 
 

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Does Costco’s Valuation Reflect Strength or Stretch?

Not much momentum has been noticed in Costco stock so far this year. Shares have just risen 4.3% year to date compared with the industry's growth of 6.1%.

When compared with its peers, Costco has outperformed Ross Stores, Inc. (ROST Quick QuoteROST - Free Report) and Target Corporation (TGT Quick QuoteTGT - Free Report) but underperformed Dollar General Corporation (DG Quick QuoteDG - Free Report) . While shares of Dollar General have rallied 40.5%, Ross Stores and Target have declined 1.3% and 32.8%, respectively.
 

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However, Costco is trading at a significant premium to its industry peers. The company's forward 12-month price-to-earnings ratio stands at 48.05, higher than the industry’s ratio of 30.95 and the S&P 500's ratio of 23.02. However, the stock is trading below its median P/E level of 50.68, observed over the past year. 

Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 11.50), Dollar General (16.87) and Ross Stores (22.62). 
 

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Now, the question arises whether Costco’s current price is warranted or overvalued in today’s market.

The company’s high valuation shows that investors have strong faith in the company’s steady growth, loyal customer base and solid business model. This premium may be deserved, given Costco’s consistent performance, but it also means the stock has less room for error. At this level, some of the future growth may already be priced in, making it harder to justify further upside.

Should You Invest in Costco Now or Wait for a Pullback?

Costco's August sales results reaffirm its position as a dependable stock in the retail sector, backed by strong membership growth, consistent comparable sales improvement and solid financial fundamentals. While the stock trades at a premium valuation, this appears justified, given its operational resilience, expanding global footprint and loyal customer base. For long-term investors willing to pay up for quality and stability, Costco remains a compelling choice. However, for value-conscious buyers, the elevated valuation may warrant patience for a more attractive entry point. Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.