From Yahoo Finance: 2025-06-08 06:15:00

Costco is thriving, with strong growth in same-store sales, membership, and new store openings. Home Depot, on the other hand, is facing a demand slowdown. Both companies have been successful over the past four decades. The retail sector is still worth investing in, which stock is the better buy?

Despite challenging economic conditions, Costco’s financial results are impressive. Total revenue increased by 8% in the third quarter of fiscal 2025, with a 5.7% rise in same-store sales. The company’s value proposition, low prices, and high-quality goods attract more customers, with 5 million new cardholders in the past year.

Costco plans to continue expanding with 24 new warehouses by the end of fiscal 2025, aiming for 25-30 new stores annually. Home Depot is facing economic headwinds, reflected in declining same-store sales. However, the company remains profitable and has room for growth in the $1 trillion home improvement industry.

Costco is the better business, but its expensive valuation may give investors pause. Home Depot, with a more reasonable P/E ratio, has greater upside potential once economic conditions improve. While Costco is currently performing better, Home Depot offers a more attractive investment opportunity in the long run.

Read more: Best Stock to Buy Right Now: Costco vs. Home Depot