Costco Has More in Store. Shares Climb Despite a Gloomy 2025.

Costco Shares Climb Following Strong December Sales

December's sales figures gave Costco Wholesale's stock a notable boost on Thursday, drawing positive attention from investors.

Main Highlights

• Costco's stock advanced on Thursday as investors responded favorably to the retailer's December performance and comparable sales results.
• The share price returned to levels not seen in about a month. While analysts remain optimistic, the average price target is still below the record highs reached in early 2025.

After nearly a year of declining prices from their early 2025 peak, Costco shares became more affordable—until today’s uptick.

On Thursday afternoon, the stock surged roughly 5%, reaching prices last observed a month ago. This rally was fueled by renewed confidence in Costco’s business, following the announcement that December sales increased 8.5% year-over-year, with same-store sales up 7%.

According to the company’s conference call, which was summarized by AlphaSense, strong sales in bakery, meat, and candy led the food division, while jewelry, tires, and small appliances also saw impressive results.

Investor Perspective: Why It Matters

Costco’s reputation for value has long attracted shoppers and driven its stock higher. While some investors are hopeful for a stock split or a special dividend, the current surge is mainly due to positive business momentum.

Analysts at William Blair commented late Wednesday that the latest results could help the stock recover after a roughly 10% decline over the past six months, which was driven by concerns about high valuations and sector rotation.

Most Wall Street analysts maintain a positive outlook on Costco. Visible Alpha’s survey shows that the majority rate the stock as a buy, with an average price target of about $1,035—roughly 17% above Wednesday’s closing price. However, this target remains below the all-time highs near $1,080, suggesting some caution persists.

Recent discussions among investors and analysts have highlighted additional reasons for optimism, such as the potential for a stock split—which hasn’t occurred in decades—or another special dividend, the last of which was issued in early 2024.

Thursday’s rally, however, was primarily driven by better-than-expected business results. UBS analysts noted that some investors had anticipated slower growth in same-store sales, with expectations ranging from 3% to 5%.

Instead, Costco surpassed even the most optimistic forecasts, demonstrating that the company still has significant growth drivers.

Costco’s Stock Returns to Even for the Year

With the latest gains, Costco’s shares have now recovered to break even over the past twelve months.