Costco’s 2025 Slump? Just a Pause—The Retail Giant Still Has Major Growth Plays Up Its Sleeve

Wall Street frets over a downbeat 2025, but Costco's stock tells a different story—rising on the promise of what's still in the vault.

The Membership Model's Hidden Leverage

Forget quarterly blips. The real engine is the renewal rate—a metric that consistently defies gravity and turns customer loyalty into recurring revenue most fintech startups can only dream of. It's a built-in economic moat, funded by shoppers themselves.

Warehouse Scale Meets Digital Muscle

Costco isn't just stacking pallets higher. It's building a logistics and e-commerce backend that could rival Amazon's—without the flashy headlines. Same-day delivery, expanded fresh food reach, and a private label juggernaut are quietly going live.

Global Footprint: The Unfinished Blueprint

International expansion isn't a hope; it's a mapped-out growth algorithm. New warehouse openings are scheduled like clockwork, tapping into middle-class demand abroad that's hungry for the bulk-buying playbook.

The Gas Station Gambit (That Actually Works)

While other retailers dabble, Costco's fuel stations are traffic magnets and loss leaders rolled into one. They pull members in weekly, creating a habit that spills over into the aisles—a physical-world growth hack that prints money.

So, a soft 2025 forecast? In the grand scheme, it's just noise. The market is betting on the long-term machinery—the membership flywheel, the global rollout, the operational edge—that's still firing on all cylinders. After all, in a world of speculative assets and meme stocks, sometimes the best growth play is still selling a 5-pound tub of mayo and a $1.50 hot dog. Now that's a business model even the most cynical trader can understand.

Key Takeaways

• Costco's stock was rising Thursday, lifted as investors cheered the warehouse chain's December sales and comps.
• That had the shares around levels last seen in about a month. Wall Street is bullish, though its average price target remains below record highs seen early last year.
  

Shares of Costco Wholesale have been getting cheaper for nearly a year, dropping from early 2025 highs. They got a little less cheap today.

The warehouse retailer's shares were up some 5% Thursday afternoon to levels last seen in about a month. The driver: a measure of Optimism about the direction of Costco's (COST) business following the company's announcement of December sales that rose 8.5% year-over year and same-store sales that were 7% higher.

Bakery, meat and candy sales powered the food category last month, the company said on a conference call, a transcript of which was made available by AlphaSense, while jewelry, tires and small appliances also performed well.

Why This Matters to Investors

Shoppers generally like Costco for its value, and for years its shares were powerful gainers. Some investors hold out hope for stock splits and special dividends as part of the bull case for the stock, but today optimism about the health of its business was pushing the shares higher.

"We believe this could provide the stock with a much-needed boost after dropping some 10% over the past six months or so on concerns around its elevated valuation and a rotational shift out of the sector," William Blair's bullish analysts wrote late Wednesday after the numbers were announced.

Sell-side analysts are generally upbeat about Costco's stock. Most of them have bullish ratings on the shares, according to Visible Alpha's survey, and the mean price target, at around $1,035, represents about a 17% premium to Wednesday's close. That number, however, suggests some caution, as it falls short of the shares' record highs NEAR $1,080.

Investor and analyst chatter has in recent months offered other possible reasons for optimism regarding a MOVE higher in Costco's stock, among them the possibility of a stock split—which hasn't happened in decades—or a special dividend, the last of which came in early 2024.

Related Education

Today's stock move was more about business performance. Some investors likely expected slower same-store sales growth, UBS analysts wrote, noting that it had observed expectations ranging from between 3% and 5%.

"That proved not to be the case," they wrote, as the company slightly exceeded even the high-end market bar. It's proving that it's still got plenty of drivers up its sleeve."

With today's rally, Costco shares are now back to breakeven for the past 12 months.