Costco Wholesale Corporation (NASDAQ: COST) reported a 13% jump in April net sales, fueled by an 18.8% surge in its e-commerce business that is strengthening the case for its premium valuation.
"Members are focused on quality, value, and new, exciting items. When we meet these expectations, members seem willing and able to spend,” CFO Gary Millerchip said on the company's Q2 earnings call, a sentiment reflected in the latest sales data.
The warehouse retailer’s net sales for the four weeks ended May 3, 2026, grew to $23.92 billion from $21.18 billion a year earlier. Total comparable sales increased 11.6%, with U.S. comps up 11.7%. Excluding the impacts from gasoline prices and foreign currency, total comparable sales were up 7.8%. The shift in Easter timing added between 1.5% and 2% to total sales, the company noted.
The results, which follow strong gains in February and March, highlight the increasing contribution of Costco's digital channels. This rapid online growth diversifies the company's revenue beyond its physical warehouses and reinforces its value proposition for its 82.1 million paying members. The company's membership renewal rate stood at 89.7% worldwide, providing a stable base of recurring revenue.
This digital momentum is a key factor for investors weighing the stock's rich valuation. Shares of Costco recently crossed the $1,000 mark and trade at a forward price-to-earnings ratio of 46.4, a significant premium to the discount retail industry's average of 32.4. While the stock has fallen 0.8% over the past year, it is up 17% year-to-date, prompting some analysts to raise their targets. Bank of America holds a price target of $1,185, while Goldman Sachs and Deutsche Bank see shares at $1,088 and $1,106, respectively.
The strong digital performance suggests Costco is successfully evolving its business model to compete with rivals like Walmart and Target in an omnichannel world. Investors will be watching the company's next earnings report to see if this e-commerce momentum can be sustained and whether it translates into improved profit margins.
This article is for informational purposes only and does not constitute investment advice.
