Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine. The company's consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks, and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics, and dental hygiene and foot care products; pet supplies and pet food; and tobacco products. In addition, it offers seasonal products comprising holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies; and home products that include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods. Further, the company provides apparel, which comprise basic items for infants, toddlers, girls, boys, women, and men, as well as socks, underwear, disposable diapers, shoes, and accessories. The company was formerly known as J.L. Turner & Son, Inc. and changed its name to Dollar General Corporation in 1968. Dollar General Corporation was founded in 1939 and is based in Goodlettsville, Tennessee.

Dollar General looks like a high-quality but not risk-free defensive retailer: its profitability and return on capital are noticeably better than the industry average, however liquidity and some valuation multiples still raise questions. P/E, P/S, and P/FCF are below the sector median, which supports the case for a fair or even moderately attractive valuation, especially against the backdrop of EPS growth and strong ROE. At the same time, P/B is significantly above the industry level, meaning the market is already pricing in a high value for the company’s equity and leaving little margin of safety. Net profit margin and operating margin remain below industry benchmarks, although they are improving year by year, which points to a gradual recovery in efficiency. Gross margin looks stable and close to the industry average, while gross profit and EBITDA are generally growing, confirming the resilience of the underlying business model. Revenue remains at a high level and shows no signs of a sharp deterioration, and net income and operating income also remain positive and improve compared with earlier periods. Debt burden is moderate and declining, which is a positive for stability, but the current ratio and especially the quick ratio are weak, so short-term financial flexibility is limited. Dividend yield is declining, which reduces the stock’s appeal for investors focused on current cash flow. ROA is below the industry median despite a high ROE, indicating strong financial leverage and less-than-ideal asset efficiency. Overall, the fundamentals support the stock, but not enough to aggressively raise the target valuation: the strengths are already partly reflected in the price, while weak liquidity and an expensive P/B limit the upside. For an investor, this is more a story of stable quality with moderate revaluation potential than a candidate for a sharp multiple expansion.

Dollar General Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, значительно вырос. Рынок на стороне быков.

Strong index, significantly up. The market is on the bulls' side.

Сильный индекс, значительно вырос. Приток средств в лонги на высоком уровне.

Strong index, significantly up. Inflow of funds into longs at a high level.

Strong ROE, EPS, and inexpensive P/E, P/S, and P/FCF support DG’s valuation, but weak liquidity and a high P/B limit upside potential.

Costco Wholesale Corporation COST is demonstrating remarkable momentum in its private label operations, leveraging its Kirkland Signature brand to deliver exceptional value to members. It is evolving into one of the retailer’s most effective growth engines, helping strengthen member loyalty while supporting merchandising differentiation.
Management highlighted that Kirkland Signature continues to drive growth in food and sundries by pairing equal or better quality with savings of at least 15% to 20% compared with national brands. Rather than relying on promotions, Costco is expanding the assortment with products designed to meet emerging consumer preferences.
New launches during the third quarter of fiscal 2026 included Kirkland Signature Energy Drink, Kirkland Signature Ultra Filtered Milk, Kirkland Signature Sea Salt Popcorn and Kirkland Signature Oven Roasted Chicken Dog Food, reflecting the brand’s expansion into faster-growing categories.
The strategy extends beyond introducing new products. Costco also lowered prices on several Kirkland Signature staples, including Crispy Wings, Milk Chocolate Almonds, Golf Balls and King Size Sheets, underscoring management’s commitment to passing cost efficiencies back to members instead of protecting margins.
Management suggested that Kirkland Signature is keeping pace with changing consumption trends. The company pointed to strong demand for protein-focused products, noting that its newly launched Ultra Filtered Protein Milk has gained traction quickly as shoppers increasingly prioritize health and wellness.
What the Latest Metrics Say About Costco
Costco, which competes with Dollar General Corporation DG and Target Corporation TGT, has seen its shares drop 5.9% over the past three months compared with the industry’s 1.4% decline. While shares of Dollar General have risen 1.3%, those of Target have jumped 7.6% in the aforementioned period.
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 41.93, higher than the industry’s ratio of 30.58. However, the stock is trading below its 12-month median level of 46.07, indicating some moderation in valuation despite sustained investor confidence in the stock.
Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 15.88) and Dollar General (15.26).
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.6% and 13.5%, respectively. For the next fiscal year, the consensus estimate indicates a 7.8% rise in sales and 10.2% growth in earnings.
The consensus estimates for earnings per share for both the current and next fiscal year have increased by 6 cents to $20.42 and $22.50, respectively, over the past 60 days.
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Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Costco's Kirkland Brand Is Becoming a Powerful Growth Engine

In the latest trading session, Dollar General (DG) closed at $123.20, marking a -1.24% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.89%. Elsewhere, the Dow gained 0.74%, while the tech-heavy Nasdaq added 1.29%.
Coming into today, shares of the discount retailer had gained 10.93% in the past month. In that same time, the Retail-Wholesale sector gained 1.33%, while the S&P 500 lost 0.63%.
The investment community will be closely monitoring the performance of Dollar General in its forthcoming earnings report. In that report, analysts expect Dollar General to post earnings of $2 per share. This would mark year-over-year growth of 7.53%. Meanwhile, the latest consensus estimate predicts the revenue to be $11.17 billion, indicating a 4.17% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $7.37 per share and revenue of $44.4 billion. These totals would mark changes of +7.59% and +3.92%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Dollar General. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.02% decrease. Right now, Dollar General possesses a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Dollar General has a Forward P/E ratio of 16.94 right now. This denotes a discount relative to the industry average Forward P/E of 30.08.
One should further note that DG currently holds a PEG ratio of 1.9. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Discount Stores industry currently had an average PEG ratio of 2.65 as of yesterday's close.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 21, finds itself in the top 9% echelons of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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Dollar General (DG) Stock Drops Despite Market Gains: Important Facts to Note

Costco Wholesale Corporation COST continues to expand its physical footprint at a sustained pace of warehouse openings. The company is targeting more than 30 net-new locations annually, supported by a growing real estate pipeline across domestic and international markets. For fiscal 2026, Costco expects 26 net new openings, with two previously planned warehouses shifting into fiscal 2027 rather than being canceled.
Costco began fiscal 2026 with 914 warehouses and expects to finish the year with 940. Most of the fiscal-year openings are planned in the United States, where the warehouse count is estimated to reach 648, while Canada and other international markets also contribute.
The opportunity extends beyond simply entering new markets. Costco is relocating selected high-volume warehouses into larger facilities with more parking and expanded gas stations. These investments are intended to remove operational bottlenecks and create additional selling capacity.
International expansion provides another long runway. Management sees meaningful opportunities across China, Korea, Japan, Spain, France and the United Kingdom, while Canada’s development pipeline is already mapped out for several years. Costco expects strong international expansion to continue over the next five to 10 years, suggesting its warehouse growth strategy remains broad, deliberate and far from mature.
Costco currently operates 933 warehouses, including 641 in the United States and Puerto Rico, 115 in Canada, 43 in Mexico, 37 in Japan, 29 in the United Kingdom, 20 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, three in France, two in Sweden, and one each in Iceland and New Zealand.
What the Latest Metrics Say About Costco
Costco, which competes with Dollar General Corporation DG and Target Corporation TGT, has seen its shares drop 6.4% over the past three months compared with the industry’s 2.5% decline. While shares of Dollar General have risen 1.3%, those of Target have jumped 5.7% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 42.27, higher than the industry’s ratio of 30.85. However, the stock is trading below its 12-month median level of 44.49, indicating some moderation in valuation despite sustained investor confidence in the stock.
Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 16.23) and Dollar General (16.39).
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The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.6% and 13.5%, respectively. For the next fiscal year, the consensus estimate indicates a 7.8% rise in sales and 10.2% growth in earnings.
The consensus estimates for earnings per share for both the current and next fiscal year have increased by 6 cents to $20.42 and $22.50, respectively, over the past 60 days.
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Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Why Costco's Warehouse Growth Story Is Far From Over

Shares of Five Below, Inc. FIVE have risen 41.3% over the past year, outperforming the Zacks Retail – Miscellaneous industry's decline of 14%. The company has also outpaced the Retail-Wholesale sector’s return of 4.5% and the S&P 500's rally of 25.4% during the same period.
FIVE’s Past Year Performance
Image Source: Zacks Investment Research
Five Below has also outperformed its peers, including Ollie's Bargain Outlet Holdings OLLI, Dollar Tree Inc. DLTR and Dollar General Corporation DG, over the past year.
Shares of Ollie's Bargain have declined 49.4%, while Dollar Tree and Dollar General have increased 16.6% and 17.8%, respectively.
FIVE vs. Peer Performances
Image Source: Zacks Investment Research
Closing at $197.71 yesterday, the FIVE stock stands 21.4% below its 52-week high of $251.63 reached on April 21, 2026. The stock has also moved above its 200-day simple moving average of $194.39, signaling a favorable technical setup.
FIVE Trades Above 200-Day Moving Averages
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The recent rise in the stock has contributed to its premium status. FIVE trades at a forward 12-month price-to-earnings (P/E) ratio of 21.11, higher than the industry’s average of 14.24. The company’s peers, Ollie's Bargain, Dollar Tree and Dollar General are trading at lower forward P/E ratios of 14.21, 17.52 and 16.59, respectively, than Five Below.
FIVE’s Valuation Snapshot
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Five Below’s Customer-Centric Strategy Strengthens Growth Prospects
Five Below continues to strengthen its long-term growth story through a customer-centric strategy that combines compelling value, trend-right merchandise and an engaging shopping experience. Management remains focused on delivering newness across categories while enhancing store execution and digital engagement. This integrated approach is reinforcing the company's competitive positioning and expanding its appeal among both existing and new customers.
The strategy is translating into broad-based business momentum. During the first quarter of fiscal 2026, comparable sales increased 22.7%, supported by a 19% increase in transactions and a 4% rise in average ticket. Growth was broad-based, with 15 of 18 merchandise departments posting positive comparable sales while all districts, store vintages and income cohorts delivered positive performance. These results suggest that demand is supported by healthy underlying customer engagement rather than isolated product trends.
Marketing has emerged as another important growth driver. Five Below continues to leverage creator partnerships, AI-powered content and social media to identify and amplify emerging trends while expanding its customer database for more personalized outreach. These initiatives are strengthening brand awareness, improving customer acquisition and supporting deeper customer relationships over time.
The company's merchandising strategy further enhances its competitive positioning. More than 80% of the assortment remains priced at $5 and below, preserving its core value proposition, while curated higher-priced products expand customer choice without diluting affordability. Simplified pricing, integrated Five Beyond merchandise and stronger product storytelling are making stores easier to shop and improving the overall customer experience.
Store expansion remains another key pillar of growth. Five Below opened 49 net new stores during the first quarter, ending the period with 1,970 locations across 46 states. Since then, the company has reached another significant milestone with the opening of its 2,000th store, highlighting the scalability of its retail concept and management's confidence in the brand's long-term expansion potential. Management continues to see significant white-space opportunities across the United States, with disciplined expansion expected to support market share gains and long-term revenue growth.
What to Expect From FIVE in the Future?
Following a stronger-than-expected first quarter, Five Below raised its fiscal 2026 outlook, reflecting management's confidence in the company's business momentum and execution. The company now expects net sales of $5.40-$5.48 billion, indicating approximately 14% year-over-year growth at the midpoint, while comparable sales are projected to increase 6-8%. The higher outlook reflects sustained customer demand, continued traffic growth and confidence in the company's operating strategy.
Five Below also expects continued profitability improvement during fiscal 2026. The company projects adjusted diluted earnings per share of $8.65-$9.05, while adjusted operating margin is expected to expand approximately 170 basis points to 11.6%. Gross margin expansion, fixed-cost leverage and distribution efficiencies are expected to offset higher investments in marketing, store labor and employee incentives, supporting both earnings growth and future investments.
The company remains committed to investing in long-term expansion. Five Below expects to open approximately 150 net new stores during fiscal 2026 while investing $230-$250 million in capital expenditures to support store growth, technology upgrades and infrastructure improvements. These investments are expected to strengthen the company's nationwide footprint and provide a solid foundation for scalable, sustainable growth.
Upward Estimate Revisions Signal Optimism on FIVE’s Earnings
Reflecting positive sentiment around Five Below, the Zacks Consensus Estimate for EPS has seen upward revisions. In the past seven days, the consensus estimates for the current and next fiscal years have increased by 5 cents to $9.01 and by 10 cents to $9.89 per share, respectively.
Image Source: Zacks Investment Research
How to Play FIVE Stock?
Five Below offers a compelling opportunity for long-term investors, backed by broad-based customer demand, strong traffic trends and a highly scalable store expansion strategy. The company's differentiated value proposition, customer-centric initiatives, merchandising innovation and growing digital engagement continue to strengthen its competitive position. Coupled with its raised fiscal 2026 outlook and upward earnings estimate revisions, Five Below appears well-positioned to deliver sustainable revenue and earnings growth.
Existing investors may consider maintaining their positions, while new investors can view the stock as an attractive long-term buying opportunity. Five Below currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Five Below Jumps 41% in a Year: Should You Still Buy the Stock?

Walmart Inc. WMT has consistently earned a premium valuation in the retail industry, reflecting investors' confidence in its ability to generate dependable earnings growth across economic cycles. The stock currently trades at a forward price-to-earnings (P/E) multiple of 36.74X, above the industry average of 33.47X, indicating that the market continues to place a higher value on Walmart's long-term growth prospects.
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The omnichannel retailer also trades at a significantly higher multiple than The Kroger Co. KR and Dollar General Corporation DG, which currently have forward P/E ratios of 10.54 and 15.83, respectively. Meanwhile, Costco Wholesale Corporation COST trades at an even higher multiple of 41.28.
As WMT expands its digital ecosystem and scales higher-margin businesses, investors expect those initiatives to support sustainable profit growth. At the same time, a premium multiple leaves limited room for operational disappointments, making continued execution increasingly important.
Walmart’s Growth Strategy Continues to Strengthen
Walmart is leveraging its enormous physical footprint to build an integrated omnichannel ecosystem that combines digital commerce, marketplace services, advertising, memberships and technology-driven operations.
Digital commerce continues to be one of Walmart's strongest growth engines. Global e-commerce sales increased 26% in the first quarter of fiscal 2027, supported by robust demand for pickup, delivery and marketplace services across its operating segments. The company's extensive store network allows it to fulfill online orders efficiently, enabling faster deliveries while keeping fulfillment costs under control. This combination of physical infrastructure and digital capabilities remains a significant competitive advantage.
At the same time, Walmart is steadily increasing the contribution of higher-margin businesses. Global advertising revenues advanced 37%, membership fee revenues grew 17.4%, and U.S. marketplace sales surged nearly 50% during the quarter. These businesses diversify Walmart's revenue base, generate recurring income streams and contribute more favorably to profitability than traditional merchandise sales.
Technology investments are further strengthening Walmart's competitive position. The company continues expanding automation throughout its supply chain while embedding Artificial Intelligence across customer-facing and operational processes. Its AI-powered shopping assistant, Sparky, is seeing growing customer adoption, and automation across fulfillment centers is helping improve inventory management, delivery speed and operating efficiency. These initiatives are designed to enhance productivity while supporting long-term margin expansion.
Walmart is also benefiting from continued market-share gains. The company continues attracting customers across various income levels by combining value pricing with greater convenience, broader assortment and faster fulfillment. This balanced growth strategy has helped reinforce investor confidence and supports the stock's premium valuation.
WMT Shares Continue to Outperform Retail Peers
Walmart's strong execution has translated into solid shareholder returns. Over the past year, shares have appreciated 18.3%, comfortably exceeding the broader industry's 15.6% growth as well as the Zacks Retail – Wholesale sector's 3.4% increase during the same period.
The stock has also delivered stronger performance than several major competitors. During the past year, Dollar General shares have gained 11%, while Kroger and Costco have declined 21.7% and 3.9%, respectively. The outperformance reflects the market's confidence in Walmart's ability to consistently execute across multiple growth initiatives.
Image Source: Zacks Investment Research
Walmart Faces Near-Term Challenges
Despite its favorable long-term outlook, Walmart continues to operate in a challenging environment. Cost pressures remain an area to watch. During the latest quarter, higher fuel expenses weighed on the company's distribution and fulfillment network, affecting operating income. Management indicated that if elevated fuel costs persist, retail price inflation could move higher over the coming quarters.
Meanwhile, Walmart continues investing heavily in pricing, automation, technology infrastructure and associate benefits. Although these investments should strengthen the business over the long run, they can pressure profitability in the near term. The company also continues operating in a highly competitive retail landscape, where maintaining price leadership while funding strategic initiatives requires disciplined execution.
Stable Earnings Estimates Reflect Confidence in WMT
Analysts have maintained a steady outlook for Walmart's earnings. The Zacks Consensus Estimate for the current and next fiscal year’s earnings per share (EPS) has remained unchanged at $2.89 and $3.27, respectively, in the past 30 days. Although estimates have not moved higher, they continue to project healthy earnings growth of 9.5% for the current fiscal year and 13.3% for the next fiscal year.
Image Source: Zacks Investment Research
The stable consensus suggests analysts remain confident that Walmart can continue expanding earnings despite ongoing investments and a still-uncertain macroeconomic environment.
How Should Investors View WMT Stock Today?
Walmart has evolved into a technology-enabled retailer, with digital commerce, advertising, marketplace services, memberships, AI and automation supporting long-term growth. These initiatives continue to strengthen its competitive position and diversify its earnings base. However, the stock’s premium valuation suggests that investors have already priced in many of these strengths. While Walmart’s fundamentals remain solid, further upside will likely depend on consistent execution, sustained earnings growth and continued improvement in profitability.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Walmart Commands a 36.74X Forward P/E: Is the Stock Worth Buying?

Costco Wholesale Corporation’s COST June sales update provides fresh insight into the warehouse retailer’s operating momentum amid an evolving consumer spending environment. Backed by a loyal membership base, strong traffic trends and a proven business model, Costco has long remained an investor favorite. However, with its latest monthly sales results showing some moderation in growth, investors may be wondering whether the stock still represents an attractive buying opportunity.
Breaking Down Costco’s June Sales Report
Costco’s June sales data indicated that consumer demand remained resilient, even as comparable sales growth moderated from the preceding months. For the five weeks ended July 5, 2026, the company reported an 8.8% year-over-year increase in total comparable sales. This marked a slowdown from total comparable sales growth of 12.5% in May and 11.6% in April. (Read: Costco's Comparable Sales Stay Strong Despite Slower June Growth)
Costco’s net sales for June increased 10.6% to $29.24 billion from $26.44 billion in the year-ago period. Although growth moderated from May’s 14.5% increase and April’s 13% advance, the retailer’s June performance suggests that its value proposition and digital strength continue to support solid sales momentum. Digitally enabled comparable sales remained a bright spot, rising 20.9% in June, or 21.5% after adjusting for fuel and currency impacts.
Unlocking Costco’s Growth Drivers
Costco has built one of the most resilient retail business models by combining exceptional value with a membership-driven ecosystem that continues to strengthen customer loyalty. The company consistently attracts shoppers through its low-price strategy, high-quality merchandise and carefully curated product assortment, enabling it to gain market share even in uncertain economic environments. This disciplined approach has resulted in strong sales momentum across geographies and categories, reinforcing Costco's ability to generate sustainable growth regardless of changing consumer spending patterns.
Costco continues to benefit from its membership model and high renewal rates. The company's growing Executive Membership base further strengthens this advantage, as these members tend to shop more frequently and spend more per visit. Executive memberships reached 41.2 million at the end of the third quarter of fiscal 2026, representing growth of 9.6% from the prior year. Executive members also accounted for approximately 75% of worldwide sales. Growth is being driven by both upgrades from Gold Star memberships and a higher proportion of new customers selecting the Executive tier at sign-up.
Costco is also successfully transforming its digital capabilities without compromising its highly efficient warehouse model. The company continues to enhance its mobile app, e-commerce platform, checkout technology and same-day delivery services, making shopping more convenient while improving productivity. Personalized product recommendations, artificial intelligence initiatives and stronger digital engagement are helping Costco attract new shoppers and increase conversion rates, while retail media is emerging as an additional high-margin growth opportunity.
Beyond digital initiatives, the company is steadily increasing its warehouse footprint across North America and several international markets while relocating high-volume warehouses to larger locations with expanded parking and gasoline facilities. At the same time, investments in logistics infrastructure, manufacturing capabilities and technology are improving operational efficiency and supporting future growth. Management is targeting more than 30 net new openings annually in the coming years and expects 26 net openings in fiscal 2026. Management sees particularly strong multi-year opportunities in Canada, China, Japan, Korea, Spain, France and the United Kingdom.
Supporting these investments is Costco's exceptionally strong balance sheet and cash-generating ability. Cash and cash equivalents increased to $18.9 billion at the end of the third quarter of fiscal 2026 from $14.2 billion at fiscal 2025-end, while operating cash flow for the first 36 weeks rose to $11.1 billion from $9.5 billion in the prior-year period. This strong liquidity position gives Costco ample flexibility to invest in warehouse expansion, digital capabilities, supply-chain infrastructure and the continued development of its Kirkland Signature portfolio.
Costco Navigates Competitive Landscape as Peers Scale Up
Costco's decent sales figures are part of a larger retail picture where competition is intensifying. Rivals like Dollar General Corporation DG and Target Corporation TGT are investing in expanding their product assortments, enhancing supply-chain efficiency and upgrading in-store and digital experiences to capture greater market share. These retailers are also sharpening their value propositions through competitive pricing, private-label expansion and targeted promotional strategies.
Margins remain a critical area to monitor, with potential concerns stemming from any deleverage in the selling, general and administrative rate. Foreign exchange volatility, potential tariffs on key imports and inflationary pressure create uncertainty.
Is Costco's Premium Valuation Justified?
Costco stock has fallen 8.3% over the past three months compared with the industry’s decline of 5%. Among key retail peers, Dollar General shares have dropped 4.3% during the same period, while Target has gained 8.2%. Now the key question is whether the recent pullback has made Costco a more attractive investment at current valuation levels.
Image Source: Zacks Investment Research
Despite Costco's strong fundamentals, valuation remains an important consideration. The stock has historically commanded a premium due to its consistency, brand strength and membership economics. However, that premium can limit near-term upside, especially if investor expectations become too high.
Valuation metrics continue to reflect this premium positioning. Costco’s forward 12-month price-to-earnings ratio stands at 41.28, well above the industry’s 30.06 and the S&P 500’s 21.13. It also trades at a significant premium to Target and Dollar General, whose corresponding multiples are 16.09 and 15.83, respectively. However, Costco’s current valuation remains below its 12-month median of 46.28, indicating that the recent share-price decline has made the stock somewhat less expensive than it was previously.
Image Source: Zacks Investment Research
Costco's Earnings Estimates Continue to Move Higher
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.6% and 13.3%, respectively. For the next fiscal year, the consensus estimate indicates a 7.8% rise in sales and 10.2% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has increased by 7 cents and 8 cents to $20.38 and $22.46, respectively, over the past 60 days.
Image Source: Zacks Investment Research
How to Play Costco Stock: Buy, Hold or Sell?
Although June sales growth moderated, Costco's underlying fundamentals remain intact, and rising earnings estimates reflect continued confidence in the stock. While Costco continues to command a premium valuation, the recent pullback has made its valuation somewhat more reasonable. Current shareholders may consider holding the stock given its competitive advantages and long-term growth prospects, while prospective investors may prefer to wait for a more attractive entry point before building or adding to positions.
Costco currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Is Costco Stock Still a Buy After Its June Sales Update?

In the latest close session, Dollar General (DG) was down 2.67% at $120.14. This change lagged the S&P 500's daily gain of 0.38%. Elsewhere, the Dow saw an upswing of 0.02%, while the tech-heavy Nasdaq appreciated by 0.9%.
Prior to today's trading, shares of the discount retailer had gained 6.06% outpaced the Retail-Wholesale sector's gain of 0.77% and the S&P 500's gain of 1.27%.
Market participants will be closely following the financial results of Dollar General in its upcoming release. The company is expected to report EPS of $2, up 7.53% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $11.17 billion, indicating a 4.16% increase compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $7.36 per share and a revenue of $44.4 billion, representing changes of +7.45% and +3.92%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Dollar General. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. Dollar General currently has a Zacks Rank of #3 (Hold).
From a valuation perspective, Dollar General is currently exchanging hands at a Forward P/E ratio of 16.76. Its industry sports an average Forward P/E of 27.98, so one might conclude that Dollar General is trading at a discount comparatively.
We can additionally observe that DG currently boasts a PEG ratio of 1.88. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Retail - Discount Stores industry stood at 2.46 at the close of the market yesterday.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 7, this industry ranks in the top 3% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Costco Wholesale Corporation's COST valuation remains among the highest in the retail sector, leaving little room for operational missteps. That makes monthly sales updates closely monitored by investors. June's sales results once again highlighted resilient consumer demand, decent comparable sales growth and strong digital momentum, but are these trends enough to support the stock's premium multiple going forward?
A Closer Look at Costco's June Sales
For a retailer trading at a premium multiple, the quality and consistency of growth matter as much as the pace. Costco’s June report certainly provided encouraging evidence. Net sales increased 10.6% year over year to $29.24 billion during the five weeks ended July 5, 2026. Comparable sales rose 8.8% companywide, while adjusted comparable sales, excluding gasoline price and foreign exchange impacts, advanced 7%. Those figures point to broad-based demand rather than growth driven solely by external factors.
Although June comparable sales remained strong, they moderated from the 12.5% and 11.6% growth recorded in May and April, respectively. The sequential slowdown does not undermine Costco's performance, but it highlights the broad-based growth needed to support its premium valuation.
Digital performance remained another bright spot. Costco's digitally enabled comparable sales climbed 20.9% on a reported basis and 21.5% after adjusting for fuel and currency effects. Sustained online growth of this magnitude complements warehouse traffic and reinforces the company's ability to expand sales beyond its physical footprint without compromising its value proposition.
Do Costco’s Latest Metrics Justify Its Premium Valuation?
Costco trades at a forward 12-month price-to-earnings ratio of 41.30, well above the industry’s ratio of 30.05. The premium reflects investors' confidence in the company's membership-driven business model, recurring fee income, resilient sales growth and disciplined execution. Even so, the multiple remains below its 12-month median of 46.32, indicating that valuation has moderated from historical levels.
The premium is even more evident when compared with mass-merchandise retailers. Costco continues to command a meaningful premium over Dollar General Corporation DG and Target Corporation TGT. Costco is trading at a premium to Dollar General (forward 12-month P/E of 15.53) and Target (15.73).
Why Has Costco Stock Pulled Back?
Despite another month of resilient sales growth, Costco shares have dropped 6.5% over the past month, modestly underperforming the industry's 5.6% decline. The softness may be tied to the stock’s rich valuation rather than to any deterioration in underlying fundamentals. The moderation in June’s comparable sales growth from the stronger gains recorded in May and April may have also tempered investor enthusiasm.
Over the same period, shares of Dollar General have gained 2.2%, while Target has advanced 1.5%.
How Are Costco's Earnings Estimates Trending?
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.6% and 13.3%, respectively. For the next fiscal year, the consensus estimate indicates a 7.9% rise in sales and 10.2% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has increased by 6 cents and 8 cents to $20.38 and $22.47, respectively, over the past 60 days. The upward revisions suggest that analysts remain confident in Costco's ability to deliver steady earnings growth.
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Can Costco Continue to Command a Premium?
Costco’s June sales once again reinforced the strength of its membership-driven business model, supported by healthy comparable sales growth and continued digital momentum. Improving earnings estimates further lend support. However, given its significant premium to the industry, Costco will need to sustain strong execution to justify its valuation and drive the stock higher.
Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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Are Costco's June Sales Enough to Defend Its Rich Valuation?

Costco Wholesale Corporation COST is expanding its retail media capabilities to build an incremental digital revenue opportunity while strengthening member engagement. A major step in this strategy is the recently launched collaboration with Google Commerce Media and YouTube. This partnership serves as a significant milestone on the warehouse giant's journey toward expanding its share of retail media revenues. It also simplifies how brands and agencies collaborate with Costco's retail media network.
The opportunity is supported by accelerating digital engagement, with digitally enabled comparable sales rising 21.5%, and site and app traffic increasing 37% during the third quarter of fiscal 2026.
Management emphasized that the company's business model differs from other players due to its high SKU efficiency. However, Costco approaches this opportunity with a strict philosophy where the member always comes first. The primary focus of their retail media expansion is building personalization capabilities to deliver relevant messaging that helps members save both time and money. At the same time, Costco has introduced media activity on third-party sites.
We note that personalized product recommendation carousels generated conversion rates three times higher than typical levels and contributed just under $0.5 billion in e-commerce sales during the quarter.
Management expects retail media revenues to ramp up meaningfully. Brand partners participate to secure a better return on their marketing spend while providing relevant experiences. Costco maintains a strict structural guardrail for this digital revenue stream. Between 80% and 90% of the value generated from retail media is directly reinvested into the membership base through better pricing and greater value, reinforcing Costco's member-first strategy while supporting long-term retail media expansion.
What the Latest Metrics Say About Costco
Costco, which competes with Dollar General Corporation DG and Target Corporation TGT, has seen its shares drop 6.1% over the past three months compared with the industry’s 2.9% decline. While shares of Dollar General have fallen 2.6%, those of Target have jumped 8.9% in the aforementioned period.
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 43, higher than the industry’s ratio of 30.6. However, the stock is trading below its 12-month median level of 46.35, indicating some moderation in valuation despite sustained investor confidence in the stock.
Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 15.18) and Dollar General (15.46).
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.5% and 13.3%, respectively. For the next fiscal year, the consensus estimate indicates a 7.9% rise in sales and 10.2% growth in earnings.
The consensus estimates for earnings per share for the current and next fiscal year have increased by 6 cents to $20.38 and 10 cents to $22.46, respectively, over the past 60 days.
Image Source: Zacks Investment Research
Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can Costco Stock Build a Meaningful Retail Media Business?

Looking at the universe of stocks we cover at Dividend Channel, on 7/7/26, Dollar General Corp (Symbol: DG) will trade ex-dividend, for its quarterly dividend of $0.59, payable on 7/21/26. As a percentage of DG's recent stock price of $117.59, this dividend works out to approximately 0.50%.
In general, dividends are not always predictable; but looking at the history above can help in judging whether the most recent dividend from DG is likely to continue, and whether the current estimated yield of 2.01% on annualized basis is a reasonable expectation of annual yield going forward. The chart below shows the one year performance of DG shares, versus its 200 day moving average:
Looking at the chart above, DG's low point in its 52 week range is $95.11 per share, with $158.23 as the 52 week high point — that compares with a last trade of $117.62.
According to the ETF Finder at ETF Channel, DG makes up 16.82% of the AGF U.S. Market Neutral Anti-Beta Fund ETF (Symbol: BTAL) which is trading lower by about 0.5% on the day Monday. (see other ETFs holding DG).
In Monday trading, Dollar General Corp shares are currently down about 0.5% on the day.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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