Shares of Costco Wholesale Corporation fell approximately 1.9% during Tuesday's trading session, closing at $978.97. The stock retreated from a session high near $997, reflecting a broader market reaction to disappointing U.S. retail sales figures for December, which signaled potential softening in consumer demand.
Analyst Outlook and Valuation Context
Despite the day's decline, Bernstein maintained an Outperform rating on Costco and increased its price target to $1,155, citing international growth opportunities. The firm noted that U.S. comparable sales have stabilized. However, with the stock trading at a premium valuation—carrying a price-to-earnings ratio above 53—it remains sensitive to shifts in sales trends or membership renewal rates.
Recent Performance and Upcoming Catalysts
Costco recently reported January net sales of $21.33 billion, a 9.3% year-over-year increase. Total comparable sales for the four-week period ending February 1 rose 7.1%, with digital sales surging 34.4%. The company attributed a four-percentage-point headwind in certain international markets to the timing of Lunar New Year.
Investors are now focused on the next key data points: a quarterly cash dividend of $1.30 per share payable on February 13, followed by the February sales update and the release of fiscal second-quarter results scheduled for March 5. These reports will provide critical insight into post-holiday consumer spending patterns at the warehouse retailer.
The membership-based model has historically provided resilience during economic uncertainty, as shoppers prioritize essentials. However, the current elevated valuation means any disappointment in sales growth or renewal metrics could prompt a sharper market reaction. Traders will monitor upcoming economic indicators for further clues on consumer health ahead of Costco's March earnings.
