Costco Continues to Kick Retail Tail and Win Consumer Shopping Dollars
Renewed inflation pressures keep us bullish on the shares.
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Wednesday night, Costco (COST) released its April sales report, which showed that total sales for the month rose 13.0%, year over year, to $23.92 billion. Total comp sales for the month rose 11.6%, with digital sales up 18.8%.
Stripping out the impact of gas prices and foreign exchange, U.S. comp sales rose 8.0%, a quicker pace than the 6.2% reported for March, and total adjusted comp sales rose 7.8% in April, up from 6.2% in March.
The sequential step up in Costco’s April comp sales follow the climb in gas and diesel prices and other renewed inflationary forces discussed with you over the last few months. When we look at S&P Global's recently published April Manufacturing and Service PMI reports, we find the following:
April Manufacturing PMI – Overall, input cost inflation strengthened to a ten-month high and remained historically elevated. Goods producers responded by recording their most pronounced uplift in charges since June 2025.
April Services PMI - Service providers reported that costs were driven higher by rising supplier charges, increased fuel and gas prices alongside an uplift in staffing costs. The rise in expenses led to another sharp increase in selling charges over the month. Firms commonly attributed higher output prices to efforts to offset some of the adverse impact on profit margins of increased input costs.
Those data points indicate that inflation pressures are poised to persist, eroding consumer buying power. That, however, is a positive for Costco as well as TJX Companies (TJX) and Amazon (AMZN) .
Getting back to Costco, when we discussed the company’s March sales, I discussed with you how the company was lapping difficult year-over-year comparisons. That was also the case with Costco’s April 2026 figures. Those impressive, adjusted April 2026 comp sales for the U.S. and overall company were on top of April 2025’s adjusted U.S. comps sales of 7.1% and 6.7% for the total company.
We remain bullish on COST shares and would remind you that one of the keys to the company’s business model and earnings is its membership-driven business model. We’ll get an update on that when it reports its quarterly results on May 28. Based on what we see, we’ll revisit our $1,150 price target.
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At the time of publication, TheStreet Pro Portfolio was long AMZN, COST, and TJX.
