New York, May 26, 2026, 17:04 EDT
Costco Wholesale shares dropped 2.5% to $1,002.93 Tuesday. Investors pulled back from the high-flying retailer ahead of Thursday’s fiscal third-quarter report. At the close, Costco’s market cap was about $445.7 billion, with the stock trading near 52 times earnings.
Costco will report after the close Thursday. Options prices signal the stock could move around 3% through the end of the week. Options let investors hedge or speculate on share moves. Wall Street expects revenue of $69.47 billion and earnings of $4.92 per share, up from $4.28 last year, according to Visible Alpha.
U.S. markets reopened after Memorial Day. The S&P 500 was up 0.6%. The Nasdaq Composite climbed 1.2% to finish at a record, boosted by lighter Treasury yields and speculation over U.S.-Iran talks. Nasdaq says markets were shut Memorial Day, May 25, and regular trade runs 9:30 a.m. to 4 p.m. Eastern.
Costco lagged major retail and consumer stocks. Walmart dropped 1.4%, Amazon eased 0.4% and Target ended down 0.1%, MarketWatch reported, suggesting the pressure was not just about broader defensive names.
Costco posted another month of strong sales growth. Net sales for April climbed 13.0% to $23.92 billion. Comparable sales, or sales at stores and channels open at least a year, increased 11.6%. Stripping out gas prices and FX, comparable sales were up 7.8%. The company said an extra Easter-related shopping day contributed about 1.5 to 2 percentage points to total and comparable sales.
Costco will report fiscal Q3 earnings on May 28 at 2:00 p.m. Pacific. Investors then get another look at monthly sales on June 3, shortly after the April numbers got a bump from Easter.
Membership figures will be in focus. Costco reported in its quarterly filing that membership fee revenue jumped 14% to $1.36 billion in the second quarter. Renewal rates were 92.1% in the U.S. and Canada and 89.7% globally. The company said more online memberships were pulling renewal rates slightly lower.
Costco’s management keeps saying the consumer looks careful, but still looking for value. On the company’s March earnings call, CFO Gary Millerchip said members stayed “very focused on quality and value.” He added that when Costco gives them that, members “have the capacity to spend.” The Motley Fool
Wall Street stays upbeat, but the conversation has shifted beyond sales. Oppenheimer’s Rupesh Parikh flagged a “transitory earnings dip” from fuel, e-commerce and pharmacy mix. UBS’s Michael Lasser wrote, “Despite the debate, we remain convinced” that Costco can work through rising fuel prices. Both kept a positive view and raised price targets ahead of the report. BigGo Finance
Analyst targets are mixed. According to S&P Global data from StockAnalysis, 36 analysts have an average “buy” rating on the stock and put the average 12-month target at $1,077, about 7% above the current price. UBS just bumped its target up to $1,275. Oppenheimer also raised its number to $1,160. StockAnalysis
But this setup isn’t a one-way bet. With Costco trading at more than 50 times earnings, the stock could get hit if the next quarter is only decent. A dip in renewal rates, less comps growth after the Easter boost, or squeezed margins from fuel, pharmacy and digital could all be enough for investors to cut the shares even if revenue itself ticks up. CEO Ron Vachris warned in March that “the future impact of tariffs remains extremely fluid,” so costs could rise again if trade policy turns. The Motley Fool
Costco isn’t being seen as the usual steady bet right now. The market views it more as an earnings play with a tough hurdle. Shares finished Tuesday’s session just over $1,000.
