From Yahoo Finance: 2025-06-04 13:21:00

Costco reported strong fiscal third quarter 2025 earnings, showing a 5.7% increase in same-store sales. With $62 billion in product sales and $1.2 billion in membership fee revenue, Costco’s stock has risen 25% in the past year. However, valuation metrics suggest caution in buying the stock at this time.

Costco’s unique warehouse club store format allows for lower margins on goods due to membership fees. Operating income in the fiscal third quarter of 2025 was around $2.5 billion, with membership fees making up roughly half. The company’s success is evident in its ability to keep prices low and maintain customer loyalty.

While Costco is a well-run business with strong financial results, investors have priced the stock for perfection, with valuation ratios above their five-year averages. This may make Costco less favorable as an investment opportunity at the current price. Costly stock could hinder long-term returns for investors.

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Read more: Is Costco a Buy Now?