Costco's sales resilience is giving Cramer a reason to feel better about the stock

Costco reported September comparable sales growth of 11.4%, with core comps up 7.6% excluding gas and currency; U.S. core comps were about 8%, and the stock rose nearly 1% Thursday. UBS highlighted value-focused pricing and expanded DoorDash and Uber Eats delivery, while Wolfe estimated U.S. core growth would have been around 7.3% after adjusting for Labor Day timing. Membership growth and renewals remain key concerns, and Costco is still trading at a little over 41 times forward earnings.

Analysis

The key question is whether Costco can turn value-seeking traffic into durable membership economics—not whether one monthly comp print clears the bar. If sales strength holds after calendar normalization, Costco can defend traffic and renewal value while weaker retailers face pressure to match prices; the trade-off is that price investment may support volume but constrain merchandise margin. Any tariff refunds are a temporary funding source, not evidence of structurally higher earnings power.

Near term, the stock’s premium valuation leaves less room for a merely good report: the calendar-adjusted U.S. comp estimate cited by Wolfe is a useful hurdle for the next sales update. Over 1–3 months, watch normalized comps alongside renewal and membership growth; these determine whether the multiple is being supported by repeat economics or by traffic alone. Over 6–18 months, broader delivery availability could add convenience and order occasions, but incremental orders need to be evaluated for fulfillment economics and whether they are genuinely additive. DoorDash, Uber and Instacart could gain order volume, though partnership reach alone does not establish meaningful profit contribution.

Contrarian angle: inflation-driven trade-down may make Costco’s value proposition more resilient than discretionary retail, but that does not automatically justify paying a premium multiple. The risk is a valuation reset if comps normalize while renewal indicators soften. A calendar-adjusted comp rebound and stable or improving membership metrics would falsify that bear case; weaker renewal trends or a sharp deceleration in normalized comps would undermine the bull case.

Key Decisions for Investors

• Do not chase COST solely on the monthly print. Treat the next sales report as a catalyst check: compare U.S. core comps with the calendar-adjusted ~7.3% estimate cited by Wolfe, and look for confirmation in membership and renewal trends.
• For a relative-value expression, consider a modest long COST / short broad discretionary-retail exposure only if normalized comps remain resilient and membership indicators hold. Keep sizing restrained given COST’s valuation premium; exit or reassess if comps slow materially or renewal metrics weaken.
• Treat CART, DASH and UBER as secondary read-throughs, not direct beneficiaries to underwrite from partnership expansion alone. Revisit only if disclosures show incremental order volume translating into attractive contribution economics.
• Monitor whether additional tariff refunds fund lasting price reductions or merely a temporary sales lift. A reversal in price investment, weaker normalized comps, or deterioration in membership trends would invalidate the traffic-and-value thesis.