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Costco warehouse exterior and storefront signage on red-filtered background
Photo: The Motley Fool

Costco Stock Sinks 18% From Record Before Q4 Earnings

Costco Wholesale Corporation2 min read5 sources

Why is Costco stock down ahead of earnings?

Costco (COST) stock is down 18% from its May record of $1,093 to $895 on Wednesday, as investors brace for Thursday's Q4 earnings that will test margins and bulk-buying consumer loyalty.

Key numbers

Q4 Net Sales$93.9B+11.3% YoY from $84.4B
US Comparable Sales (Q4 FY2026)10.7%vs 5.7% in Q4 FY2025
Full-Year FY2026 Net Sales$297.3B+10.2% YoY from $269.9B
Q4 EPS Estimate (consensus)$6.51+10.9% vs $5.87 prior year
COST Stock Price$895-18% from May record of $1,093
Analyst Avg Price Target$1,101+23% implied upside from $895

What happened

Costco (COST) stock is down 18% from its May record of $1,093 to $895 on Wednesday, as investors brace for Thursday's Q4 earnings that will test margins and bulk-buying consumer loyalty. The top-line is already known: Q4 net sales hit $93.9 billion — up 11.3% from a year ago — with US comparable-sales growth (sales at stores open at least a year) running at 10.7%. Fiscal 2026 full-year net sales reached $297.3 billion, a 10.2% year-on-year rise. Thursday's after-bell report will fill in the rest: gross profit margin, membership renewal rate, and management's fiscal 2027 consumer-spending outlook.

Why it matters

Costco is the closest thing retail has to a real-time read on how ordinary households are holding up under higher borrowing costs. When the warehouse club's bulk-buying members stay loyal, it signals that core consumer wallets are still intact — but if margins compress or renewal rates dip, that is an early warning that rate pressure is spreading. At 45 times earnings — twice the average US stock — Costco needs a clean report to justify its premium price.

Who this affects

Marketmixed
Medium impact
High 43x P/E creates risk if margins disappoint Thursday.
Companybullish
High impact
Top-line growth is strong; profit details arrive Thursday after bell.
Competitorsbearish
Low impact
Warehouse rivals face Costco's 10.7% US comparable-sales benchmark.
Industrybullish
Medium impact
US warehouse comps at 10.7% signal resilient consumer spending.

Costco vs Walmart, Target, BJ's Wholesale

CostcoCOST:NASDAQ$399B+11%43x+11.3%
WalmartWMT:NYSE$850B+0.2%35x+7.3%
TargetTGT:NYSE$72B———
BJ's WholesaleBJ:NYSE$11.8B—19x—

As of 2026-09-22

How we got here

  1. COST hits all-time closing high of $1,093; FY2026 optimism at peak.

  2. Q3 FY2026 results: net sales $69.1B (+11.6% YoY), EPS $4.93.

  3. August sales release confirms Q4 net sales $93.9B, US comps 10.7%.

  4. COST at $895, down 18% from May peak with Q4 earnings days away.

  5. Full Q4 FY2026 earnings after bell at 4:15 PM ET; EPS estimate $6.51.

What to watch

  • Q4 gross margin: any dip below Q3's 12.88% signals cost pressure.2026-09-24
  • Membership renewal rate: a slip below 93% flags loyalty strain.2026-09-24
  • FY2027 guidance and warehouse-opening plan to justify 43x valuation.2026-09-24

Educational content only. Not investment advice.

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