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- COST F4Q25 - Sales in line but Same Store Sales misses. What's next?
COST F4Q25 - Sales in line but Same Store Sales misses. What's next?
Cheat Sheets presented by stocktwits
COSTCO (COST)
🏪💰 World's Leading Membership Warehouse | 89.8% Renewal Rate Excellence
Q4 2025 Results | $84.4B Revenue, +8% YoY, Record Year Performance
💰 Market Cap: $429B | 🏪 Locations: 914 | 📈 Revenue: +8% YoY ($84.4B)
👨💼 CEO Ron Vachris | 📊 Same-Store Sales: +5.7% | 💳 E-commerce: +13.6% Growth
$943.26
📈 +$27.84 (+3.04%) Today
Current Price
Price Target Scenarios
18-Month Horizon (2026 Targets)
$1,225.00
Bull Case (+30%)
Global Expansion
E-commerce Dominance
📊 Valuation Calculation:
• 2026E Revenue: $290B × P/S: 1.88x = $1,225.00
🚀 Key Assumptions:
International expansion accelerates • E-commerce growth sustains 15%+ • Membership fee increases • New warehouse openings exceed 30/year • Kirkland brand expansion • Premium membership growth
$1,085.00
Base Case (+15%)
Steady Growth
Market Leadership
📊 Valuation Calculation:
• 2026E Revenue: $285B × P/S: 1.67x = $1,085.00
⚖️ Key Assumptions:
Moderate same-store sales growth • E-commerce grows 10-12% • 25-27 new warehouses annually • 90%+ membership renewals maintained • Gross margins stable
$850.00
Bear Case (-10%)
Competition Pressure
Economic Slowdown
📊 Valuation Calculation:
• 2026E Revenue: $275B × P/S: 1.35x = $850.00
🔻 Key Assumptions:
Economic recession impacts discretionary spending • Amazon/Walmart competition intensifies • Membership growth slows • International expansion challenges • Margin pressure from tariffs
Bottom Line for Retail Investors
👑
Membership Model
89.8% renewal rate, 81M paying members, $1.72B membership fees (+14% YoY), executive hour benefits driving upgrades
🌎
Global Expansion
914 warehouses worldwide, 35 new locations planned for FY2026, strong international growth runway
💻
Digital Innovation
$27B+ digitally enabled sales, enhanced checkout technology, retail media opportunities, passwordless mobile app
⚠️
Mixed Signals
Renewal rates declining due to digital mix shift, tariff pressures ongoing, high valuation expectations
📊 Q4 2025 "Strong Finish" Results
$84.4B Revenue, +8% YoY, Record Year with $270B Net Sales
💵
$84.4B
Q4 2025 Revenue
+8% YoY
📊
$5.87
EPS (Diluted)
vs $5.29 Prior Year
🏪
+5.7%
Same-Store Sales
YoY Growth
💳
89.8%
Renewal Rate
Worldwide (-40bps)
📞 Key Q1 2025 Earnings Highlights
🌟
Extended Hours Success
Executive member exclusive hours launched June 30th, 1% boost to weekly US sales, strong member reception
🏆
Record Year Results
$270B net sales (+8% YoY), $19.6B e-commerce (+15% YoY), record gas volumes, 27 new warehouses opened
💳
Membership Growth
$1.72B membership fee income (+14% YoY), 81M total members (+6.3% YoY), strong executive upgrades
🛒
Volume Milestones
245M hot dog combos sold, 157M rotisserie chickens, enough bath tissue to reach moon 200+ times
📍 CEO Commentary: "Our strong Q4 performance reflects our operators and merchandising team's fantastic job delivering strong results while investing in employees" - Ron Vachris
💡 Strategic Priorities: 35 new warehouses planned FY2026, $31/hour average US wage, extended executive hours rollout, tariff mitigation strategies, Kirkland Signature expansion
👥 Customer Insights: Traffic +3.7% worldwide, ticket +1.9%, fresh foods leading growth, gold/jewelry performing well, discretionary spending remains selective
🔮 Market Outlook: $27B+ digitally enabled sales metric introduced, confident in market share growth ability, offensive approach to tariff management
📊 Q4 2025 Performance & Key Metrics
| Metric | Q4 2025 | Performance |
|---|---|---|
| Revenue | $84.4B | +8% YoY |
| Net Income | $2.61B | +11% YoY (+14% ex-tax) |
| Membership Fee Income | $1.72B | +14% YoY (+$212M) |
| E-commerce Comps | Growth | +13.6% YoY |
| Total Warehouses | 914 | +10 in Quarter |
Total Paid Members81M
Total Cardholders145.2M
🎯 Management Commentary & Strategic Priorities
"Our operators and merchandising team did a fantastic job delivering strong financial results while investing in our employees" - CEO Ron Vachris. Key priorities: 35 new warehouse openings planned FY2026 (5 relocations), executive member exclusive hours driving 1% weekly US sales lift, average hourly US wage now over $31, offensive tariff mitigation strategy ("last to go up, first to come down" on pricing). Digital capabilities expanding with $27B+ digitally enabled sales, improved search effectiveness, passwordless mobile app sign-in, retail media opportunities. Membership renewal rates at 89.8% worldwide (92.3% US/Canada) with younger member acquisition increasing through digital channels.
🚀 Why COST Bulls Are Right
🏰
Membership Moat
90.4% renewal rate, predictable recurring revenue, customer loyalty unmatched, fee increases with minimal churn
🌍
Global Expansion
897 warehouses, massive international runway, proven replication model, 29 new locations planned FY2025
💻
E-commerce Leadership
13% growth, big & bulky advantage, omnichannel excellence, 1M+ quarterly deliveries, digital transformation success
💎
Value Proposition
Kirkland private label excellence, bulk buying power, supply chain efficiency, inflation hedge for members
🐻 Why COST Bears Have Valid Concerns
📉
Renewal Rate Decline
89.8% worldwide (-40bps YoY), digital signups renewing at lower rates, membership mix shift headwinds continuing
⚔️
Competitive Pressure
Amazon, Walmart intensifying competition, online threats to warehouse model, market share battles
📦
Tariff & Inflation Pressure
$43M LIFO charge from low-mid single digit inflation, tariff mitigation efforts ongoing, potential margin compression risks
🌊
Economic Sensitivity
Discretionary spending vulnerable to recession, tariff impacts on imports, wage inflation pressure, consumer squeeze
This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.
