Costco Stock Stumbles Despite Solid Sales

Costco's stock has experienced a slight downturn in 2025, contrasting with the strong performance of the S&P 500. While the wholesale retailer continues to report robust sales figures, with revenue up around 8% for the full fiscal year, the growth rate has shown signs of deceleration. Fourth-quarter comparable sales growth slowed compared to the full-year rate, and November's monthly sales growth was marginally weaker than October's, indicating a potential cooling trend.

The company's valuation is a significant point of discussion, with its price-to-earnings ratio appearing high when compared to faster-growing technology firms. Investors may be questioning if the current sales trajectory justifies the stock's premium. A key profit driver, membership fees, saw a substantial 14% jump in fiscal Q4 following a recent increase in U.S. and Canada dues. This hike has now been lapped, presenting a challenging comparison for the upcoming year.

Furthermore, a meaningful catalyst for the stock appears absent in the short term. Costco historically raises membership fees infrequently, with increases occurring roughly every five-and-a-half years. Management also tends to reinvest a portion of fee increases back into product value and member perks, rather than fully converting it to profit. Given the recent hike, another increase is not anticipated for several more years, limiting its immediate impact as a stock driver.