Sales Growth Happens As Estimates Face Real Tests

However, the stock’s milquetoast reaction shows just how much the company ranks above the curve.

If more of you look like a tech industry growth darling than a big box retailer, ‘good’ isn’t good enough.

And if you dig deeper, the latest sales numbers highlight an alarming trend.

Strong Headline Numbers Reveal Underlying Weakness

Costco released its comp sales figures for June, and it’s a print many other retailers would look at with envy. Net sales for the period reached $29.24 billion, up 10.6% year-over-year (YOY) and 7.6% excluding gas and currency effects. The board also announced a dividend of $1.47 per share, payable in August with a record date of July 24. But despite these strong headline numbers, weaknesses are emerging.

Volatility in gas prices has been a major challenge for Costco as weary shoppers turn to supermarket clubs for relief at the pump. Costco often sets its fuel prices lower to drive volume and bring more people into its stores (also known as a loss leader). But now that gasoline prices are falling again, this climate is evaporating, and June’s sales print tells the story. When gas and cash are taken out, the US Comp number of 7.6% is down significantly from May’s 8.7% comps ex-gas and cash. The overall decline is actually going up a lot; 8.8% in June compared to 12.5% ​​in May, which highlights how much the fuel price caused the price increase.

US stores may be in good shape, but the international market is a growing problem. Canadian adjusted inflation also decreased from 7.6% in April to 5.6% in May to 4.9% in June, and adjusted international inflation decreased from 8.0% in May to 7.0% in June. Soft international markets could limit gains if U.S. corporate sales pick up again, as war has reignited in Iran and fuel prices have risen again.

Stocks Are Still Trading at Very High Values ​​Compared to Other Brokers

Costco is still a great business with a loyal membership base, strong sales growth (total sales up 11.6% YOY as of May’s Q3 2026 financial report), and a hot dog and soda combo that costs just $1.50. But the stock has long been priced to reflect a complete execution, and when you’re trading at 46 times forward earnings with a Price/Earnings Growth (PEG) ratio of around 4.5, investors are wary of any slight disarmament.

The retail sector trades at about 21 times earnings, which is less than half of the current valuation given to COST shares. While a company with sales and membership numbers like Costco deserves high multiples, trading at more than double the industry average while overall computer sales are down is a red flag that even a FIFA referee can’t see.

Here’s how to hedge the new sales narrative: the market is no longer looking at leading compounders like COST (up nearly 9% year to date), but cheap laggards like TGT, up more than 40% so far in 2026.

Tech Crash Lowers Stocks By Itself

Costco’s fundamentals remain strong despite the selloff, but critical technologies are emerging in full swing. The stock briefly rose to record highs in May following a fuel shock caused by the Iran war, as new members flocked to stores after filling their tanks with cheap fuel. But when the war ended, so did the COST stock rally. The stock has retreated about 15% from its previous high, and technical signals under the hood don’t point to a rebound anytime soon.

Shares are now trading below the 50-day and 200-day moving averages, and the Relative Strength Index (RSI) has been firmly in bearish territory since the end of May. The Moving Average Convergence Divergence (MACD) indicator also indicates continued downward pressure and gaining strength.

For long-term investors, this is probably not the time to sell, as the company still has renewal rates of 92% and digitally enabled comps are a bright spot at 21%. But new investors may be better off waiting for an attractive entry point. A slowdown doesn’t mean a collapse, but a stock trading at 46 times earnings can’t afford to slow down if you want to maintain bullish momentum.

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