Costco Delivered Another Strong Sales Print in July. Here’s What That Signals for the Second Half of the Year.

When shoppers are looking for ways to stretch their budgets, Costco (COST) is proving that value still drives spending. The warehouse retailer reported July net sales of $23.12 billion, up 10.7% from a year earlier, for the four weeks that ended Aug. 2.

Its growth went beyond new warehouse openings and changing fuel prices. Comparable sales rose 8.9% across the company, while U.S. comparable sales climbed 10.3%, showing that shoppers kept returning to Costco’s stores.

For COST investors, the report adds to the case that Costco’s membership model, low prices, and expanding digital business are continuing to attract customers. But after another strong sales print, can Costco maintain enough underlying growth through the second half to surpass the high expectations already attached to COST? Let’s dive in. 

Costco’s Sales Momentum

Based in Issaquah, Washington, Costco Wholesale operates membership warehouses that sell groceries, consumer goods, electronics, appliances, gasoline, and services across 931 locations worldwide. 

Costco, with its $420.9 billion market value, closed at $949.15 on Aug. 6, up 10% year-to-date (YTD) but down 2% from its 52-week level.

At 46.41x forward earnings and 1.52x sales, COST trades above the sector medians of 20.53x and 1.07x, respectively, leaving little room for weaker execution. Its forward dividend is $5.88 per share, giving investors a 0.62% yield.

Costco’s latest sales report showed that shoppers are still spending at its warehouses. On Aug. 5, the company said July net sales rose 10.7% to $23.12 billion for the four weeks ended Aug. 2. That compares with $20.89 billion during the same period last year.

Sales for the first 48 weeks of the fiscal year reached $273.55 billion, up 10.1% from a year earlier. Comparable sales rose 8.9% in July. The U.S. business led the way with a 10.3% gain, while Canada rose 4.2% and other international markets increased 6.0%.

Their numbers remained solid even after removing the effects of fuel prices and currency movements. Comparable sales grew 6.6% on that basis. The U.S. rose 6.9%, Canada gained 4.9%, and other international markets grew 6.6%.

The strong July report follows a solid May quarter. Revenue climbed 11.6% to $70.53 billion, beating the $69.47 billion Wall Street estimate by 1.5%. Earnings came in at $4.93 per share, basically matching the $4.92 estimate.

Same-store sales grew 9.8%, up from 5.7% a year earlier. Operating margin stayed at 4%, while net income rose 7.72% to $2.19 billion. Operating cash flow jumped 44.89% to $11.13 billion, giving Costco room to open more warehouses, invest in member value, and support dividends.  

Costco’s Growth Test

Costco’s strong July sales arrive as the retailer tests a new way to deepen the value of its membership. Around June 24, the company opened its first standalone fuel station in Mission Viejo, California. The fuel-only site marks Costco’s first gas operation located separately from a warehouse.

The move builds on an already meaningful business. Fuel represented roughly 10% of Costco’s net sales, and the company operated 747 gas stations globally at the end of fiscal 2025. A second standalone site, planned for Honolulu’s Kapālama Kai around 2027, will offer a clearer test of whether the format can work in other high-cost markets.

Still, standalone fuel should be viewed primarily as a membership and traffic tool rather than a major new profit engine. That distinction matters as fuel markets become less predictable. September WTI crude gained $2.07, or 2.75%, while September RBOB gasoline rose $0.0997, or 3.51%, as doubts persisted over a partial reopening of the Strait of Hormuz.

Costco also faces a separate margin question related to potential tariff refunds. Management said during its latest earnings call that it could pass some refund benefits back to customers. That approach would support Costco’s low-price reputation, but it could limit the profit retained from any tariff recovery.

With operating margins historically ranging from 2.5% to 4%, Costco has little room for cost pressure or weaker merchandise economics. Its second-half investment case will depend on whether it can preserve margins while sustaining the sales momentum evident in July.  

Analysts See More Room for Costco’s Momentum

Costco’s July sales report gives Wall Street a fresh data point before its next earnings release on Sept. 24. For the August 2026 quarter, analysts expect the warehouse retailer to earn $6.51 per share. That estimate is up 10.9% from $5.87 in the prior-year quarter.

Bernstein recently raised its price target on COST to $1,059.53. That points to about 11.6% upside from the stock’s Aug. 6 closing price. The firm expects inflation to keep sending shoppers toward Costco’s lower warehouse prices.

Its target is relatively conservative compared with the broader Street’s expectations. The consensus rating is “Moderate Buy,” rather than an unconditional endorsement. The average price target is at $1,101.12, implying roughly 16% upside.  

Conclusion

Costco’s July results show that its value proposition remains highly effective, with strong U.S. comparable sales and digital growth supporting a solid finish to fiscal 2026. The next earnings report should confirm whether that demand is translating into sustained profit growth. COST shares are most likely to trend higher if Costco meets its $6.51 quarterly EPS expectation and protects margins. Still, the stock’s premium valuation could limit gains unless sales momentum continues to exceed expectations.