Costco(US:COST) ZACKSยท2025-07-17 14:51Core Insights - Costco Wholesale Corporation's June sales results indicate strong performance, with a year-over-year increase in comparable sales and net sales, which may influence the stock's near-term trajectory [1][3][9] Sales Performance - For the five weeks ended July 6, 2025, Costco reported a 5.8% year-over-year increase in total comparable sales, with net sales rising 8% to $26.44 billion from $24.48 billion [3][9] - Regionally, comparable sales increased by 4.7% in the United States, 6.7% in Canada, and 10.9% in Other International markets, with e-commerce sales surging 11.5% [3][9] Membership Model - Costco's membership-driven model remains a core strength, with a high renewal rate of 92.7% in key markets, contributing to consistent revenue growth [2][4] - As of the third quarter of fiscal 2025, Costco reported 79.6 million paid household members, a 6.8% increase year over year, with executive memberships growing 9% to 37.6 million [5] E-commerce and Logistics - The company has enhanced its e-commerce capabilities, with comparable sales rising 14.8% in the third quarter, and logistics deliveries increasing by 31% [6] - The introduction of a Buy Now Pay Later program has provided members with greater purchasing flexibility [6] Expansion Strategy - Costco opened nine warehouses during the third quarter and plans to open 10 more in the final quarter, aiming for a total of 27 openings in fiscal 2025 [7] Cost Control and Product Mix - The company maintains a disciplined focus on cost control and product mix optimization, with Kirkland Signature sales outpacing overall company growth [8][10] Valuation and Market Position - Costco's stock has outperformed the industry, with shares rallying 13.4% over the past year, while trading at a forward 12-month price-to-earnings ratio of 48.33, significantly higher than industry peers [12][14] - Despite the premium valuation, the company's consistent performance and strong customer loyalty may justify the higher price [16][17]