Bullish Outlook for Costco and Retail Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 25 2026
0mins
Should l Buy COST?
Source: NASDAQ.COM
- Costco Stock Surge: Costco shares have risen 16% in 2026, significantly outperforming the market, demonstrating its robust recovery capabilities in the retail sector, particularly against the backdrop of improving tariff policies.
- Five Below's Business Turnaround: Five Below achieved over 20% sales growth in 2025 despite facing tariffs on two-thirds of its imported goods, with CEO Winnie Park's leadership driving effective expansion strategies that are beginning to pay off.
- Wayfair's Strong Growth: After experiencing sales declines in 2024, Wayfair closed 2025 with three consecutive quarters of strong growth, indicating its recovery potential in the furniture market, especially with expectations of a housing market rebound.
- Tariff Policy Impact: The Trump administration's plan to implement a 15% global tariff poses challenges for Costco and Five Below, but it also provides these retailers an opportunity to reassess pricing strategies and profit distribution, potentially rewarding investors through special dividends.
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Analyst Views on COST
Wall Street analysts forecast COST stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 982.570
Low
769.00
Averages
1061
High
1205
Current: 982.570
Low
769.00
Averages
1061
High
1205
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
COSTCO STOCK RISES 1% FOLLOWING STRONG Q2 SALES AND PROFIT RESULTS
Sales Performance: The company reported a 1% increase in sales for the second quarter, indicating steady growth in revenue.
Profitability: The profits exceeded expectations, showcasing effective cost management and operational efficiency.
See More
Chinese Consumers Reshape Retail Market
- Changing Consumer Behavior: The rise of warehouse clubs and private labels is significantly altering shopping habits among Chinese consumers, which is squeezing the pricing power of multinational brands and impacting their market share.
- Increased Market Competition: Local brands are gradually eroding the market positions of multinational companies by offering more competitive prices and products that better meet consumer needs, thereby intensifying the competitive landscape in retail.
- Brand Strategy Adjustments: In response to shifting consumer preferences, multinational brands may need to reassess their market strategies, potentially lowering prices or increasing promotional activities to maintain competitiveness in the Chinese market.
- Long-term Impact Assessment: This trend not only affects current sales performance but may also have profound implications for future brand loyalty and market positioning, necessitating that multinational companies closely monitor these changes to formulate appropriate response strategies.
See More
Costco and Sam's Club Drive China's Transition to Warehouse Shopping
Consumer Recovery in China: China's consumer recovery is uneven, indicating a shift in shopping behaviors and perceptions of value among Chinese consumers.
Impact on Multinational Companies: This change in consumer values may pose challenges for multinational consumer staples companies that previously relied on steady growth in the Chinese market.
See More
US Stocks Plunge Amid Rising Energy Prices and Labor Market Concerns
- Market Weakness: The S&P 500 index fell by 1.33%, and the Dow Jones Industrial Average hit a 3.5-month low, reflecting investor concerns over the Middle East conflict potentially driving energy prices higher and sparking inflation risks, which dampens market confidence.
- Disappointing Employment Data: The US nonfarm payrolls unexpectedly dropped by 92,000 in February, with the unemployment rate rising to 4.4%, indicating a weakening labor market that raises doubts about economic health and may lead the Fed to adopt a more cautious approach in future policy adjustments.
- Surge in Energy Prices: WTI crude oil prices surged over 12% to a 2.5-year high as the ongoing Middle East conflict exacerbates supply concerns, which is expected to push global oil prices even higher, impacting profitability across related sectors.
- Corporate Earnings Resilience: Despite the overall market decline, 74% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, demonstrating a degree of resilience among businesses that may support future market recovery.
See More
Middle East War Triggers Market Turmoil
- Market Decline: The S&P 500 index fell by 0.95%, the Dow Jones Industrial Average by 1.00%, and the Nasdaq 100 by 0.76%, reflecting market concerns that the ongoing Middle East war could drive energy prices higher, leading to inflation.
- Weak Employment Data: U.S. nonfarm payrolls unexpectedly dropped by 92,000 in February, with the unemployment rate rising to 4.4%, indicating a deteriorating labor market and exacerbating fears of an economic slowdown.
- Surge in Energy Prices: WTI crude oil prices surged over 9% to a 2.25-year high due to the ongoing conflict in the Middle East, raising inflation expectations and diminishing investor confidence in the stock market.
- Corporate Earnings Performance: Despite the overall market weakness, 73% of S&P 500 companies exceeded earnings expectations, with Q4 earnings projected to grow by 8.4%, demonstrating resilience among some firms that may provide future market support.
See More
Middle East Tensions Weigh on Stock Market
- Market Reaction: The S&P 500 and Nasdaq both fell about 1% on Friday due to escalating tensions in the Middle East, reflecting increased investor uncertainty, particularly after President Trump stated there would be no deal with Iran.
- Rising Oil Prices: Oil prices reached their highest levels since April 2024, causing U.S. gas prices to rise, which benefits Costco as its reputation for low gas prices attracts more customers, leading to a 1% increase in its stock price on Friday.
- Financial Sector Pressure: Financial stocks continue to face pressure as a spike in private credit redemptions weighs on sentiment, with shares of Goldman Sachs, Capital One, and Wells Fargo declining, while BlackRock's stock dropped nearly 6% after it limited withdrawals from a private credit fund, raising concerns about financial health.
- Investment Strategy: During Friday's meeting, Jim Cramer highlighted that despite the market's downturn, there are still buying opportunities, particularly favoring Goldman Sachs and Cardinal Health, the latter of which saw its fourth purchase this week.
See More
COSTCO STOCK RISES 1% FOLLOWING STRONG Q2 SALES AND PROFIT RESULTS
Sales Performance: The company reported a 1% increase in sales for the second quarter, indicating steady growth in revenue.
Profitability: The profits exceeded expectations, showcasing effective cost management and operational efficiency.
See More
Chinese Consumers Reshape Retail Market
- Changing Consumer Behavior: The rise of warehouse clubs and private labels is significantly altering shopping habits among Chinese consumers, which is squeezing the pricing power of multinational brands and impacting their market share.
- Increased Market Competition: Local brands are gradually eroding the market positions of multinational companies by offering more competitive prices and products that better meet consumer needs, thereby intensifying the competitive landscape in retail.
- Brand Strategy Adjustments: In response to shifting consumer preferences, multinational brands may need to reassess their market strategies, potentially lowering prices or increasing promotional activities to maintain competitiveness in the Chinese market.
- Long-term Impact Assessment: This trend not only affects current sales performance but may also have profound implications for future brand loyalty and market positioning, necessitating that multinational companies closely monitor these changes to formulate appropriate response strategies.
See More
Costco and Sam's Club Drive China's Transition to Warehouse Shopping
Consumer Recovery in China: China's consumer recovery is uneven, indicating a shift in shopping behaviors and perceptions of value among Chinese consumers.
Impact on Multinational Companies: This change in consumer values may pose challenges for multinational consumer staples companies that previously relied on steady growth in the Chinese market.
See More
US Stocks Plunge Amid Rising Energy Prices and Labor Market Concerns
- Market Weakness: The S&P 500 index fell by 1.33%, and the Dow Jones Industrial Average hit a 3.5-month low, reflecting investor concerns over the Middle East conflict potentially driving energy prices higher and sparking inflation risks, which dampens market confidence.
- Disappointing Employment Data: The US nonfarm payrolls unexpectedly dropped by 92,000 in February, with the unemployment rate rising to 4.4%, indicating a weakening labor market that raises doubts about economic health and may lead the Fed to adopt a more cautious approach in future policy adjustments.
- Surge in Energy Prices: WTI crude oil prices surged over 12% to a 2.5-year high as the ongoing Middle East conflict exacerbates supply concerns, which is expected to push global oil prices even higher, impacting profitability across related sectors.
- Corporate Earnings Resilience: Despite the overall market decline, 74% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, demonstrating a degree of resilience among businesses that may support future market recovery.
See More
Middle East War Triggers Market Turmoil
- Market Decline: The S&P 500 index fell by 0.95%, the Dow Jones Industrial Average by 1.00%, and the Nasdaq 100 by 0.76%, reflecting market concerns that the ongoing Middle East war could drive energy prices higher, leading to inflation.
- Weak Employment Data: U.S. nonfarm payrolls unexpectedly dropped by 92,000 in February, with the unemployment rate rising to 4.4%, indicating a deteriorating labor market and exacerbating fears of an economic slowdown.
- Surge in Energy Prices: WTI crude oil prices surged over 9% to a 2.25-year high due to the ongoing conflict in the Middle East, raising inflation expectations and diminishing investor confidence in the stock market.
- Corporate Earnings Performance: Despite the overall market weakness, 73% of S&P 500 companies exceeded earnings expectations, with Q4 earnings projected to grow by 8.4%, demonstrating resilience among some firms that may provide future market support.
See More
Middle East Tensions Weigh on Stock Market
- Market Reaction: The S&P 500 and Nasdaq both fell about 1% on Friday due to escalating tensions in the Middle East, reflecting increased investor uncertainty, particularly after President Trump stated there would be no deal with Iran.
- Rising Oil Prices: Oil prices reached their highest levels since April 2024, causing U.S. gas prices to rise, which benefits Costco as its reputation for low gas prices attracts more customers, leading to a 1% increase in its stock price on Friday.
- Financial Sector Pressure: Financial stocks continue to face pressure as a spike in private credit redemptions weighs on sentiment, with shares of Goldman Sachs, Capital One, and Wells Fargo declining, while BlackRock's stock dropped nearly 6% after it limited withdrawals from a private credit fund, raising concerns about financial health.
- Investment Strategy: During Friday's meeting, Jim Cramer highlighted that despite the market's downturn, there are still buying opportunities, particularly favoring Goldman Sachs and Cardinal Health, the latter of which saw its fourth purchase this week.
See More
