- Costco carried steady sales momentum into fiscal 2026, with comparable sales still running in the mid-to-high single digits.
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Membership fee income is climbing faster than sales.
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Even after a down year for the stock, the valuation still looks priced for near-flawless execution.
Costco Wholesale (NASDAQ: COST) has a habit of turning “boring” retail into impressive compounding. But the stock didn’t deliver in 2025. After a rare weak stretch for the stock, investors are looking at 2026 and asking whether the membership-based wholesale retailer’s shares will finally resume their upward march.
After all, it’s not like the underlying business is showing any weakness. Costco’s comparable sales continue to grow at high rates, and the company has exceptional momentum internationally — in markets where it still has a lot of room to expand.
In short, there’s a lot to like.
The problem is price — not the price of Costco’s goods, but the price of its stock. Are shares really worth a valuation of 47 times earnings?
If you’re looking for evidence that Costco’s business is continuing to grow rapidly, you’ll find it easily.
In its first quarter of fiscal 2026, Costco’s total sales rose 8.2% year over year to about $66 billion. Comparable sales, or sales at warehouses open for more than one year, rose 6.4%, and digitally enabled comparable sales (comparable sales tied to digital ordering behavior) rose 20.5%.
Importantly, Costco said that its comparable sales growth was driven by both increased traffic and ticket sizes.
Another part of Costco’s business worth calling out is its “other international” business, which includes all of its markets except its mature U.S. and Canada markets. Comparable sales from these geographies have been rising faster than the U.S. Adjusted to exclude the impacts of changes in gas prices and foreign exchange, Costco’s “other international” comparable sales rose 6.8% in fiscal Q1. This compares to adjusted comparable sales of 5.9% in the U.S. for the same period.
This strong quarter is a continuation of the robust growth the company has been steadily delivering for investors. In fiscal 2025, total sales rose 8.1% year over year to about $270 billion.
Costco’s real advantage is not just cheap bulk goods. It is its membership flywheel.
In its fiscal first quarter, membership fee income rose 14% year over year to about $1.33 billion. That is faster than its sales growth — an important consideration for investors to keep in mind, as membership fees are a high-quality revenue stream, both in terms of margin profile and their recurring nature.
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