Core Insights - Costco Wholesale Corporation's U.S. comparable sales increased by 5.1% in September, indicating strong consumer demand and a preference for value as the holiday season approaches [1][8] - The company has seen solid traffic growth, with U.S. comparable traffic and ticket up by 3.5% and 1.5%, respectively, in the fourth quarter of fiscal 2025 [1] Sales Performance - U.S. shoppers remain engaged with Costco's expanding mix of essentials and discretionary goods, driven by strategic enhancements to the shopping experience [2] - Exclusive morning hours for executive members and an additional hour on Saturday evenings for all members have contributed approximately 1% to weekly U.S. sales since their implementation on June 30 [2] Holiday Strategy - Costco has adjusted its holiday product mix to focus on higher-ticket and practical goods, such as furniture and home improvement items, rather than traditional seasonal offerings [3] - This strategy aims to align with evolving member priorities while maintaining strong sales productivity per warehouse [3] Market Context - Despite concerns over tariffs and inflation, Costco's ability to drive comparable sales through traffic and ticket growth indicates resilient consumer demand [4] - The company is entering the holiday season on solid footing, with members prioritizing quality, value, and convenience [4] - Deloitte projects U.S. holiday retail sales to rise between 2.9% and 3.4% during the November-to-January period [4] Competitive Position - Costco's share price has risen by 4.5% over the past year, outperforming the industry growth of 4.2% [5] - In contrast, Dollar General's shares have increased by 24.4%, while Target's shares have declined by 45.9% during the same period [5] Valuation Metrics - Costco's forward 12-month price-to-earnings ratio is 46.03, significantly higher than the industry average of 29.48 [6] - The company is trading at a premium compared to Target (10.84) and Dollar General (15.28) [6] Financial Estimates - The Zacks Consensus Estimate for Costco's current financial-year sales and earnings per share implies year-over-year growth of 7.7% and 11.1%, respectively [9] - Current quarter sales are estimated at $67.13 billion, with projections for the next quarter at $69.07 billion [10] - Year-over-year growth estimates for sales are 8.02% for the current quarter and 8.39% for the next quarter [10] Earnings Estimates - The Zacks Consensus Estimate for earnings per share for the current quarter is $4.24, with a year-over-year growth estimate of 10.99% [11] - The most recent consensus for the current year is $19.99 per share, reflecting an 11.12% year-over-year growth estimate [11]