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Is Costco's 9.8% Comparable Sales Growth Stronger Than It Looks?
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Key Takeaways
Costco posted 9.8% Q3 FY2026 comp sales growth, aided by fuel inflation and FX tailwinds.
Adjusted comps rose 6.6%, driven by 2.4% higher traffic and 4.2% adjusted ticket growth.
Costco ended with 82.9M paid members; Executive memberships rose 9.6% and drove 75% of sales.
Costco Wholesale Corporation’s (COST - Free Report) comparable sales growth of 9.8% in the third quarter of fiscal 2026 has immediately grabbed investors’ attention, given the standout figure in today’s retail environment. The expansion was propelled by a 2.2% lift from fuel price inflation and a 1% tailwind from foreign exchange fluctuations. While these macroeconomic factors boosted reported comparable sales, the underlying performance suggests demand remained broad-based across the business.
Adjusted comparable sales, which exclude gasoline and foreign exchange impacts, rose 6.6%. The growth was supported by a healthy balance of traffic and spending. Comparable traffic increased 2.4%, indicating that more members visited Costco warehouses, while adjusted ticket growth reached 4.2%, reflecting larger baskets and stronger purchasing activity.
Management noted that the company has continued to generate adjusted comparable sales growth in the 6%-7% range despite lapping unusually strong categories from prior periods, including gift card promotions and elevated gold sales. The ability to maintain that pace suggests demand remains resilient.
Regionally, comparable sales increased 9.4% in the United States, 10.7% in Canada and 11.2% in Other International markets. Excluding gasoline and foreign exchange impacts, comparable sales rose 6.8%, 6.2%, and 5.9%, respectively, pointing to healthy demand across all major operating regions.
Membership dynamics support this trend. Costco ended the quarter with 82.9 million paid memberships, up 4.1% from the prior-year period, while total cardholders increased 4% to 148.5 million. Executive memberships rose 9.6% year over year to 41.2 million, reflecting continued member engagement and upgrades. Executive members accounted for approximately 75% of worldwide sales.
Costco’s comparable sales growth was more than a headline number. It reflected a business generating growth through increased member visits, larger baskets and stable demand across markets.
How Costco Compares With Walmart and Target
Among Costco’s major competitors, Walmart Inc. (WMT - Free Report) and Target Corporation (TGT - Free Report) also reported healthy comparable-sales growth in their latest quarters.
Walmart posted U.S. comparable sales growth of 4.1%, driven by higher customer transactions, increased unit volumes and strong e-commerce performance. Walmart continued to gain market share across income groups while benefiting from growth in advertising, marketplace sales and Walmart+ membership revenues. Walmart’s results reflected steady demand for both grocery and general merchandise offerings.
Meanwhile, Target delivered comparable sales growth of 5.6%, supported by a 4.4% increase in traffic and strength across both stores and digital channels. Target reported sales growth in all six core merchandise categories, with broad-based demand across guest demographics. Target also highlighted momentum in beauty, food and wellness categories. As Target executes its merchandising and store experience initiatives, the retailer remains focused on driving sustainable long-term growth.
What the Latest Metrics Say About Costco
Costco has seen its shares tumble 4.6% over the past three months compared with the industry’s decline of 2.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 43.66, higher than the industry’s ratio of 31.17. However, it is trading below its 12-month median level of 46.79, indicating some moderation in valuation despite sustained investor confidence in the stock.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.2% and 13.2%, respectively. For the next fiscal year, the consensus estimate indicates a 7.7% rise in sales and 10.1% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has increased by 3 cents and 2 cents to $20.36 and $22.42, respectively.
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Is Costco's 9.8% Comparable Sales Growth Stronger Than It Looks?
Key Takeaways
Costco Wholesale Corporation’s (COST - Free Report) comparable sales growth of 9.8% in the third quarter of fiscal 2026 has immediately grabbed investors’ attention, given the standout figure in today’s retail environment. The expansion was propelled by a 2.2% lift from fuel price inflation and a 1% tailwind from foreign exchange fluctuations. While these macroeconomic factors boosted reported comparable sales, the underlying performance suggests demand remained broad-based across the business.
Adjusted comparable sales, which exclude gasoline and foreign exchange impacts, rose 6.6%. The growth was supported by a healthy balance of traffic and spending. Comparable traffic increased 2.4%, indicating that more members visited Costco warehouses, while adjusted ticket growth reached 4.2%, reflecting larger baskets and stronger purchasing activity.
Management noted that the company has continued to generate adjusted comparable sales growth in the 6%-7% range despite lapping unusually strong categories from prior periods, including gift card promotions and elevated gold sales. The ability to maintain that pace suggests demand remains resilient.
Regionally, comparable sales increased 9.4% in the United States, 10.7% in Canada and 11.2% in Other International markets. Excluding gasoline and foreign exchange impacts, comparable sales rose 6.8%, 6.2%, and 5.9%, respectively, pointing to healthy demand across all major operating regions.
Membership dynamics support this trend. Costco ended the quarter with 82.9 million paid memberships, up 4.1% from the prior-year period, while total cardholders increased 4% to 148.5 million. Executive memberships rose 9.6% year over year to 41.2 million, reflecting continued member engagement and upgrades. Executive members accounted for approximately 75% of worldwide sales.
Costco’s comparable sales growth was more than a headline number. It reflected a business generating growth through increased member visits, larger baskets and stable demand across markets.
How Costco Compares With Walmart and Target
Among Costco’s major competitors, Walmart Inc. (WMT - Free Report) and Target Corporation (TGT - Free Report) also reported healthy comparable-sales growth in their latest quarters.
Walmart posted U.S. comparable sales growth of 4.1%, driven by higher customer transactions, increased unit volumes and strong e-commerce performance. Walmart continued to gain market share across income groups while benefiting from growth in advertising, marketplace sales and Walmart+ membership revenues. Walmart’s results reflected steady demand for both grocery and general merchandise offerings.
Meanwhile, Target delivered comparable sales growth of 5.6%, supported by a 4.4% increase in traffic and strength across both stores and digital channels. Target reported sales growth in all six core merchandise categories, with broad-based demand across guest demographics. Target also highlighted momentum in beauty, food and wellness categories. As Target executes its merchandising and store experience initiatives, the retailer remains focused on driving sustainable long-term growth.
What the Latest Metrics Say About Costco
Costco has seen its shares tumble 4.6% over the past three months compared with the industry’s decline of 2.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 43.66, higher than the industry’s ratio of 31.17. However, it is trading below its 12-month median level of 46.79, indicating some moderation in valuation despite sustained investor confidence in the stock.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.2% and 13.2%, respectively. For the next fiscal year, the consensus estimate indicates a 7.7% rise in sales and 10.1% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has increased by 3 cents and 2 cents to $20.36 and $22.42, respectively.
Image Source: Zacks Investment Research
Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.