Here's why Jim Cramer is putting Costco stock in the penalty box
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Jim Cramer said Thursday that "something's wrong" at Costco, and he plans to get to the bottom of it one way or another. Costco's slightly better-than-expected August same-store sales, or comps in retail-speak, reinforced a growing concern of Jim and other investors: The company's execution needs to be perfect to maintain the stock's lofty price-to-earnings valuation of nearly 41 times forward earnings estimates. Comps that just about exceed expectations are not perfect execution, especially as the retailer tries to figure out how to get younger members to renew their memberships at a greater pace. For the four weeks ending Aug. 30, Costco reported on Wednesday evening an overall comp sales increase of 5.4%, excluding the impact of gasoline prices and foreign exchange fluctuations. The company saw a 75 basis point, or three-quarters of a percentage point, drag on growth due to Labor Day being a week later this year. Adjusting for the calendar headwind, according to Wells Fargo, same-store sales would have been up 6.2% last month, versus an expected 6.1%. On top of just eking out a beat, the analysts pointed to traffic decelerating 110 basis points, or 1.1 percentge points, and tracking below the trailing 12-month average. COST mountain 2024-12-31 Costco performance since 2025 Costco shares were flat Thursday at $929 each - down 15% from their all-time high of nearly $1,097...
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