Great News for Costco Investors

COST accelerated sharply in September, with revenue up 13% year-over-year and comparable sales rising 11.4%, a result that cuts against recent worries about a slowdown.

The U.S. figure stands out most. U.S. comparable sales jumped 12.5%, reversing the slowdown concerns that had weighed on sentiment. Strip out gas stations and comparable sales still grew 7.6%, which shows the strength extends beyond fuel-driven revenue.

The shares had lagged the S&P 500 this year, up just 3.5%, so the report arrives against a backdrop of relative underperformance. The gap between the 11.4% headline comp and the 7.6% ex-gas figure is worth noting: gas contributed meaningfully to the top-line number, but the underlying merchandise business is still expanding at a solid clip.

Interpretation: the source attributes the strength to inflation pushing more customers toward Costco's warehouse model. If that reading holds, COST benefits from trade-down behavior, though that is an explanation of customer motivation rather than a confirmed driver in the reported figures.