By Teresa Rivas
Santa Claus must be a Costco member -- and that is great news for the stock.
Costco Wholesale released its December same-store sales after the market closed on Wednesday, showing that the warehouse club closed 2025 on a high note. Net sales climbed 8.5% from the year-ago period to $29.9 billion, while total-company comparable sales increased 7%, up from 6.9% in November. U.S. core comps, which exclude gasoline prices and the effects of moves in exchange rates, jumped 6.3%, compared with 5.8% in the prior month.
Shares rose on the numbers, "which should serve as a springboard for a stock that had a non-Costco like year in 2025" as Gordon Haskett analyst Chuck Grom put it.
The stock, at a recent $915.31, fell more than 6% in 2025 even as the S&P 500 notched a third straight year of double-digit gains. It was an unusual outcome for Costco, which has risen 150% in the past five years.
Barron's was right to warn against owning it at the end of 2024. Yet the stock may finally be at a turning point.
Costco has been racking up healthy sales gains, setting up the proverbial "difficult comparisons." Comparable-store sales, or comps, averaged above 9% in the calendar first quarter of last year -- a tall order even for a consistent retail winner like Costco. So the fact that December's growth wasn't a sharp drop-off (and accelerated on a two-year basis) was a meaningful victory, and it bodes well for the fiscal second quarter as a whole because the month accounted for roughly 40% of sales during the same three-month period one year ago.
The results "likely ease investor concerns around a potentially softer-than-expected comp in the fiscal second-quarter and likely provide some reassurance around the company's ability to maintain a mid-single-digit comp," writes William Blair analyst Phillip Blee, who raised his estimates following the report.
E-commerce was another standout, as Costco's digitally-enabled segment saw same-store sales jump 18.3%, up from 16.3% in November. Moreover, all of the company's departments saw positive comps, from essentials to discretionary. Traffic was up 2.7% during the month, while the average ticket was up 4.2%.
"We believe Costco's outperformance case is now even stronger in a mixed consumer spending backdrop given the company's superior value proposition," writes Oppenheimer analyst Rupesh Parikh, who calls the stock a top pick, with a $1,050 price target. "We still see the potential for a special dividend and/or a stock split, which could represent positive catalysts for shares."
Valuation remains a potential headwind for Costco, as it changes hands for around 41 times next fiscal year's expected earnings.
Yet its multiple is down from well over the 50 times that first led Barron's to be skeptical, and the earnings portion of its price/earnings ratio could improve as it gets more months like December under its belt. With so few reliable, strong growth stories in retail, investors have been willing to pay up for similar performance, as Walmart's gains have shown. And as long as consumers remain hyper-focused on value, warehouse clubs should keep taking market share.
Costco stock still has a long way to recover from an underwhelming 2025, but it's off to a good start.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 09, 2026 02:00 ET (07:00 GMT)
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