MW Costco customers showed up despite a cold February. That's not the only thing impressing analysts.

By Steve Gelsi

The retailer's U.S. same-store sales jumped 8.6% in February, while its Q2 results were mixed

Analysts praised Costco's ability to shrug off potential tariffs on imported goods, and its stronger-than-expected same-store sales in February was a bright spot in the retailing giant's results.

Upbeat comments from analysts came after Costco $(COST)$ reported mixed second-quarter results late Thursday.

Costco's stock fell 1.8% in premarket trades on Friday. As of Thursday's close, the stock was up 12% so far in 2025, while the S&P 500 SPX is down 2.4%.

While consumers shied away from other retailers in what turned out to be a colder-than-normal month, Costco customers still showed up in force in February as U.S. core comparable-store sales jumped 8.6%, ahead of the analyst estimate of 7.7%

The Midwest, Northeast and Los Angeles were the strongest American regions; while Mexico, Taiwan and Korea led international business.

"February's results are particularly impressive given the softer start ... that we have seen across much of the retail landscape, driven by severe winter weather in most of the U.S. and potentially from the rapid-fire changes coming out from the new Trump Administration (DOGE, immigration, tariffs, etc.)," Truist analyst Scot Ciccarelli said in a Friday research note.

He reiterated a hold rating on Costco and raised his price target on the stock to $995 a share from $935 a share.

"Costco is among the best positioned companies in our coverage given: 1) its largely needs-based demand structure with about 60% of sales coming from foods/groceries, virtually all of which is domestically source," Ciccarelli said.

The company also has flexibility to source products from countries with less or no tariff impact, he said.

"Overall, we believe Costco continues to benefit from an increasing focus from consumers on value/newness, which the company consistently delivers," he said.

J.P. Morgan analyst Christopher Horvers reiterated an overweight rating on Costco and bumped his price target by $5 a share to $1,070 a share.

"No other major retailer of this scale has succeeded in every country it entered, and the club model ranks near auto parts, the top of the best sector in retail, in our view," Horvers said in a research note.

Costco has the potential to open about 220 more clubs in the U.S., he said

In the second quarter, Costco's nonfoods items, such as 100-inch TVs were the best performers. Its low-teens growth was boosted by strength in consumer electronics, jewelry, gift cards, toys, houseware, appliances, sporting goods and home furnishings - followed by fresh foods.

Stifel analyst Mark S. Astrachan reiterated a buy rating on Costco and kept his price target at $1,075 a share.

"Continued share gains and Costco's ability to outperform should inflation increase supports the premium multiple, in our view," he said.

-Steve Gelsi

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March 07, 2025 08:29 ET (13:29 GMT)

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