Costco's Digital Sales Growth Outpaces Overall Business
Costco Wholesale reported that its digitally enabled sales grew by 20.9% year-over-year in fiscal 2026, significantly outpacing the company’s overall comparable-sales growth of 8.4%. These digital sales now account for nearly 10% of Costco's total net sales and have surpassed $27 billion. The company is leveraging digital tools to enhance member engagement rather than replacing its traditional warehouse model. Costco has seen success with personalized recommendation features on its online platforms, which generated close to $500 million in e-commerce sales during the third quarter of fiscal 2026. However, this segment operates at a lower gross margin compared to physical operations, raising questions about long-term profitability and whether convenience can offset these costs. The company is set to report its fourth-quarter earnings on September 24, which will be critical in determining if digital growth translates into stronger member economics and overall profitability. Despite strong momentum, Costco's stock currently trades at a high valuation of around 40.8 times fiscal 2027 earnings estimates.
Tickers: $COST
Topics: comparable sales growth digital sales membership model