Is Costco Stock a Buy, Sell, or Hold After April Sales Surged 13%?

Costco Wholesale (NASDAQ: COST) has built its reputation on consistency. Month after month, the membership-based wholesale retailer reports sales results steady enough that they almost feel scripted -- a key reason why its shares command such a high valuation. So when the company recently announced April sales surged 13% year over year, plenty of investors might have been tempted to call this stock a buy without much further thought.

But the headline number contains a few quirks worth knowing about. Once you do the work to back those out, however, the underlying picture is still compelling.

Despite this strong performance in April, Costco stock has come down from its 52-week high of $1,067. So, is this a reasonable time to start a position?

Imag source: Getty Images.

A strong month (but not as strong as it looks on the surface)

For the four-week retail month of April (ended May 3), Costco reported net sales of $23.92 billion, up 13% from $21.18 billion a year earlier. Total company comparable sales rose 11.6%, with digitally enabled comparable sales climbing 18.8%.

But April had one additional shopping day versus last year due to the calendar shift of Easter. Costco said this added approximately one and one-half to two percent to total and comparable sales for the period. So the underlying growth was meaningfully softer than the headline.

That said, Costco also reports comparable sales adjusted to strip out gasoline price changes and foreign exchange. On that basis, April's total company comps still rose 7.8%, with digital comps up 18.4%. That is a step up from the 6.4% adjusted total company comparable sales the wholesale retailer reported in the four-week month of January, and the 6.2% it reported in March -- a month dragged down by the same Easter shift, which flowed the other way.

Further, for the first 35 weeks of fiscal 2026, the adjusted figure now sits at 6.5% -- with digital comps at 21.1%.

Costco's fiscal second quarter painted a similarly strong picture.

Fiscal Q2 net sales rose 9.1%. And net income climbed nearly 14%. Further, Costco's membership fee income jumped 13.6% (7.5% after stripping out a U.S. and Canada fee increase from late 2024 and foreign exchange).

So, is Costco stock a buy?

For shareholders, the answer here seems straightforward: keep holding. The fundamentals continue to support the long-term story, and the company's pace of new warehouse openings -- 28 net new locations targeted in fiscal 2026, with more than 30 annually expected over the long run -- gives the business a meaningful runway. Further, a 13% increase in Costco's regular quarterly dividend, announced last month, also speaks to management's confidence.

But there are some risks. Costco CEO Ron Vachris said during the most recent earnings call that "the future impact of tariffs remains extremely fluid." And U.S. and Canada membership renewal rates ticked down 10 basis points in the most recent quarter. Though this is largely because the company is being more aggressive in its efforts to add new members (new online members are growing as a percentage of Costco's total base and renewing at a slightly lower rate than warehouse sign-ups but are bolstering total membership sign-ups).

For investors looking to buy, the answer is a bit more nuanced. As of this writing, Costco trades at about 53 times earnings -- a multiple that prices in years of more of the same spectacular execution and steady growth. With a business this strong, however, shares may rarely look cheap. For that reason, starting a very small position here could make sense for investors looking to add exposure to a high-quality compounder. But I wouldn't build it out to a normal-sized portfolio holding unless the valuation comes down meaningfully.

So, yes -- it's a buy. But with caveats.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.