Costco (COST +0.60%) stock hasn't been at the top of many investors' buy lists lately, given that its share price has declined 14% over the past six months. But as any savvy long-term investor knows, some share price declines can be great buying opportunities.
If you're considering whether to buy Costco stock while its price is taking a tumble, here are five reasons why it's probably a good idea.
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1. Revenue, earnings, and same-store sales are on the rise
Investors became a bit cautious about Costco stock when the company reported its fourth-quarter results at the end of September. Wall Street wanted U.S. same-store sales growth of 6.1%, but Costco delivered 6% growth instead. The stock fell as a result.
Investors overlooked the broader context that sales increased 8% to $86.1 billion and earnings per share rose 11% to $5.87 -- increases which exceeded analysts' consensus estimates.
The pessimism for Costco's stock likely came as investors have sky-high expectations for companies right now. But Costco's sales and earnings growth proved the company is still on the right track despite the market's reaction.
2. Membership income is impressive
Costco generates its profits by selling memberships to customers, making it especially important for investors to note the company's earnings from this category. Thankfully for Costco shareholders, the company is doing very well.
Membership income spiked 17% in Q4 to $1.7 billion. That surge at the end of the fiscal year resulted in Costco's membership income increasing 10% in 2025 to $5.3 billion. Costco members also tend to stick around (more on that below), so there's little concern that the company's income from membership fees will decline anytime soon.
3. Costco has enviable membership renewal rates
Costco members tend to be a very loyal bunch and, come rain or shine in the economy, usually hold onto their membership cards. The company has renewal rates of 92% for its U.S. and Canadian customers.
That's especially important to note, as some recent economic data suggest the economy may be slowing down. Increasing layoffs and slowing gross domestic product (GDP) spending in the first half of 2025 (compared to the same time last year) are laying the foundation for a potentially difficult 2026. Costco's loyalty program and the fact that many customers view their membership as a means to save money should help Costco continue its high renewal rate trend.
NASDAQ: COST
Key Data Points
4. Its members are probably less sensitive to the economy
Not only does Costco have high renewal rates, but its members are likely less sensitive to a slowing economy than other retail customers. That's because the average household income of a Costco member is estimated to be $125,000.
This likely gives Costco members more disposable income, making them more likely to continue shopping at Costco even during an economic slowdown or a recession. And considering that Costco has maintained many of its low prices for its Kirkland Signature products even amid rising inflation and tariffs, customers know they're getting a good deal regardless of what's happening with the economy.
5. Expanding online and physical footprint
Last, but not least, Costco could continue to increase its membership by expanding its e-commerce offerings and physical locations. Costco opened up 27 new stores in fiscal 2025, and it has plans to open an additional 35 next year.
What's more, Costco is growing its e-commerce offerings, which have helped online sales increase 13.5% in Q4 -- with e-commerce revenue now accounting for 7% of total sales. That puts Costco's e-commerce revenue up 15% from last year to $19.6 billion for fiscal 2025.
With Costco's stock taking a bit of a breather and the company still growing its top and bottom lines -- along with its high member retention -- long-term investors still have a lot of reasons to buy and hold Costco stock.
