Monthly sales growth at Costco slowed in June, a sign that even one of retail’s strongest operators isn’t immune to economic realities. The company reported late Wednesday that total June sales rose 10.6% year over year to $29.4 billion, coming in slightly below expectations.
Costco reported a 7.6% increase in June comparables in the U.S., excluding gasoline, down from an 8.7% gain in May. All categories slowed slightly last month.
Shares of the membership-only retailer fell more than 4% on Thursday. While the stock is still up about 5.5% year-to-date, that performance trails the S & P 500‘s nearly 10% gain.
Jim Cramer said Thursday that Costco is doing business in a tough economic climate.
Portfolio director Jeff Marks signaled the importance of diversification, saying “Costco is a very defensive name that can still put up strong comps even when the economy is good or bad.”
Jim Cramer thinks Costco is a good name in a bad neighborhood, pointing to the tepid gains in the retail sector overall. The popular S & P Retail ETF (XRT) is only up 1.7% year to date.
Spending intentions and financial confidence both weakened during the March to June quarter. Consumers remain worried about high food costs, their own personal income, and higher gas prices.
Costco‘s ancillary businesses, including gasoline and pharmacy, were sources of strength last month. Digital sales were also strong, with e-commerce up 21.5%, accelerating slightly from May’s 20.9%.
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It is too soon to be concerned about Costco‘s moderating June comps growth over the long haul. However, it does reinforce for investors that the stock’s premium valuation leaves little room for disappointment. Costco stock is trading at 41 times forward earnings, according to the data.
Analysts described the monthly report as “fine” but “simply not as strong as it could have been.” Wells Fargo struck a similar tone, saying Costco‘s results fell short of lofty expectations without changing the retailer’s competitive position.
Another important metric that investors will continue to watch is membership growth, which has also been slowing. Membership numbers are only released quarterly, with 82.9 million paid members and a 4.1% year-over-year growth in the fiscal 2026 Q3 earnings report.
The worldwide membership renewal rate managed to hold steady at 89.7%.
Costco‘s e-commerce sales have been a bright spot, with a 21.5% increase in June, likely benefiting from Costco‘s online Membership Appreciation Days event. This event, which was held from June 22 through June 26, offered exclusive discounts and promotions to Costco members, driving online sales and engagement.
The company’s ability to maintain a high membership renewal rate despite the challenging economic environment is a sign of its strong brand loyalty and customer retention strategies.
As investors look ahead to the company’s next sales report, they will be closely watching Costco‘s ability to handle the challenging economic environment and maintain its competitive position. The company’s premium valuation leaves little room for disappointment, and any signs of weakness in its sales or membership growth could impact the stock price.
Despite the challenges, Costco remains a strong and defensive name in the retail sector, with a loyal customer base and a proven track record of success. As Jim Cramer noted, the company is a good name in a bad neighborhood, and its ability to adapt to changing consumer behavior and economic conditions will be key to its long-term success.
