Shares in US warehouse retailer Costco Wholesale (COST:NASDAQ) have struggled to make headway this year, despite the firm posting high single-digit sales growth throughout the summer months as it picks up cash-strapped customers looking to buy in bulk and save money.

The issue looks to be valuation, with the shares trading on 53 times consensus 2025 earnings and 48 times consensus 2026 earnings.

That compares with an average of 22 times this year for the retail sector and ‘just’ 40 times this year and 29 times next year for AI chip designer Nvidia (NVDA:NASDAQ), the world’s most valuable company by market cap.

Meanwhile, whereas Nvidia is growing its earnings at more than 25% per year, Costco is growing at around 10%, so that 53 times valuation is a major barrier to further progress in many investors’ eyes.

The firm has a chance to change that perception on 25 September when it releases its results for the fourth quarter to the end of August, with analysts expecting quarterly sales of $86.1 billion, up 8% on last year, and EPS (earnings per share) of $5.79, up 12.4% on last year.

For the record, over the three previous quarters Costco has topped profit expectations each time by around 1%, which again given the valuation doesn’t really cut the mustard, so it will need to pull off a decent ‘beat and raise’ this month.Among recent initiatives to drive more spending, the firm introduced extended shopping hours for executive club members, its highest and most expensive membership level, giving them the opportunity to enjoy an hour-long private shopping experience most mornings before it opens its stores to the general public.

The company had over 37 million executive members at the end of the third quarter, and is famous for selling just about every conceivable type of good including one-ounce gold bars. 

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

23 Sep: AutoZone, Micron

24 Sep: Cintas, Paychex

25 Sep: Accenture, CarMax, Costco

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