Costco (COST 1.42%) has taken the "treasure hunt" shopping experience to the next level. The warehouse retailer just reported strong monthly sales growth, with accelerating demand at its stores in March.

The news was even better online, where revenue gains soared. Costco's members are enthusiastically shopping for both consumer staples like groceries and for discretionary purchases like home furnishings. But there's one product in particular that's spurred more traffic online and at stores: gold.

The shiny new offering was a big factor pushing sales trends higher late last quarter and likely played an even greater role in Costco's strong March results. Management has responded by boosting inventory and adding silver to its precious metal offerings.

Yet is Costco stock a buy at this premium price? Let's take a closer look.

The golden trend

Costco revealed some stellar metrics in its monthly sales update. Comparable-store sales jumped 7% in the March selling period that ran through April 7, after accounting for currency exchange swings and the shifting price of gasoline. That's as compared to a 4% increase in the prior full quarter. Part of that acceleration can be blamed on a shift in the timing of the Easter holiday, management said. But Costco's sales are still speeding up at its stores following a late-2023 lull.

The online business is doing even better. Comps soared 28% in March compared to a 16% boost in the prior full quarter. That result is good enough to put Costco ahead of major rivals like Walmart.

Gold likely made the difference. Management recently said the addition of gold bars to its e-commerce segment lifted that business in fiscal Q2. Members flocked to its website to snap up the precious metal, which has recently been selling for more than $2,000 per ounce. Costco currently limits members to a maximum of five of these bars in a single purchase. Gold still quickly sells out in its online store, but the chain has been stocking many of its stores with the product as well.

The impact

Wall Street is giddy about the effect gold might have on Costco's sales this year, with one firm estimating it could add as much as $200 million to its monthly revenue. Yet investors shouldn't expect the chain to profit much from this windfall. Costco typically earns next to nothing on its merchandise sales, with gross profit margin landing far below even Walmart.

That's not to say the business won't benefit from this win. Costco is seeing more traffic at its stores and online right now, and that typically means happier members and higher overall sales.

Is the stock a buy?

As you might expect, the retail stock has risen in response to Costco's good growth news. Shares are up 12% so far in 2024 and are trading near an all-time high. Its 50% gain in the past full year is about double the return of the S&P 500 over that time.

Costco's stock is expensive following that rally. You'll pay 1.3 times sales for the business right now, up from 1 times sales a year ago. Walmart is trading at roughly half of that valuation.

If you can look out to the long term, though, I believe Costco stock could still be a good buy. Members are highly engaged with this business, as you can tell from the fact that a record 92% of subscribers are renewing their annual commitments. The recent success with gold demonstrates that Costco can still find ways to add value to those memberships, and the rewards are showing up in higher sales and customer traffic. That's a sure path toward market-beating returns for patient shareholders over time.