Costco vs Home Depot
This page compares Costco Wholesale and The Home Depot, examining their business models, financial performance, and market context in a balanced, accessible way. It offers neutral explanations of how each retailer operates, their growth drivers, competitive positions, and the environments in which they compete, without speculation. Educational content, not financial advice.
This page compares Costco Wholesale and The Home Depot, examining their business models, financial performance, and market context in a balanced, accessible way. It offers neutral explanations of how ...
Why It's Moving
Costco stock slides after mixed holiday-quarter metrics and analyst trims shake confidence
- Preliminary Q4 sales: Costco reported fiscal fourth-quarter comparable-sales growth that beat consensus for the period but showed November’s monthly comps cooling versus October, signaling the holiday cadence may be losing momentum for U.S. shoppers.
- Analyst actions: Several firms trimmed price targets or adjusted coverage in the last week, reflecting concern that slower comps and a rich valuation compress near-term upside for the stock.
- Macro/strategy readthrough: Management is still expanding warehouses and pushing e-commerce and international growth as offsetting drivers, but the recent slowdown shifts investor focus from long-term growth projects to whether U.S. consumer demand holds through the rest of the season.
Home Depot reaffirms 2025 guidance and unveils optimistic 2026 outlook at investor conference, signaling steady growth ahead.
- Reaffirmed FY2025 guidance includes ~3% sales growth, $2B from GMS, and 12 new stores, underscoring resilience despite a 5-6% EPS dip from 2024.[1][3]
- Preliminary 2026 outlook anticipates modest demand pickup from lower rates and replacement cycles, with potential for 4-5% comps in a market recovery scenario driving faster profit growth.[1][2][3]
- Shares climbed 0.92% to $354.39 Friday as analysts eye the event as a pivot from earnings declines, with JP Morgan forecasting 2.2% SSS and $15.46 EPS.[2]
Costco stock slides after mixed holiday-quarter metrics and analyst trims shake confidence
- Preliminary Q4 sales: Costco reported fiscal fourth-quarter comparable-sales growth that beat consensus for the period but showed November’s monthly comps cooling versus October, signaling the holiday cadence may be losing momentum for U.S. shoppers.
- Analyst actions: Several firms trimmed price targets or adjusted coverage in the last week, reflecting concern that slower comps and a rich valuation compress near-term upside for the stock.
- Macro/strategy readthrough: Management is still expanding warehouses and pushing e-commerce and international growth as offsetting drivers, but the recent slowdown shifts investor focus from long-term growth projects to whether U.S. consumer demand holds through the rest of the season.
Home Depot reaffirms 2025 guidance and unveils optimistic 2026 outlook at investor conference, signaling steady growth ahead.
- Reaffirmed FY2025 guidance includes ~3% sales growth, $2B from GMS, and 12 new stores, underscoring resilience despite a 5-6% EPS dip from 2024.[1][3]
- Preliminary 2026 outlook anticipates modest demand pickup from lower rates and replacement cycles, with potential for 4-5% comps in a market recovery scenario driving faster profit growth.[1][2][3]
- Shares climbed 0.92% to $354.39 Friday as analysts eye the event as a pivot from earnings declines, with JP Morgan forecasting 2.2% SSS and $15.46 EPS.[2]
Which Baskets Do They Appear In?
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Published: October 9, 2025
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Explore BasketSleep Well At Night Portfolio
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Explore BasketWhich Baskets Do They Appear In?
Retail Hybrid Model Growth Trends 2025
Costco's impressive sales growth, fueled by a 26.1% jump in digital demand, highlights the power of blending physical and online retail. This trend creates an investment opportunity in the e-commerce platforms, payment processors, and logistics companies that enable this successful hybrid model for all retailers.
Published: October 9, 2025
Explore BasketPowering The AI Supercluster
OpenAI and Oracle are partnering on a $500 billion project to build a massive AI supercluster in the U.S. This historic infrastructure investment creates a significant opportunity for companies that supply the essential power, cooling, and construction services needed to support this build-out.
Published: July 23, 2025
Explore BasketSleep Well At Night Portfolio
A collection of premium defensive stocks expertly selected by our analysts to help protect your investments during market turbulence. These industry giants offer stability through consistent earnings, reliable dividends, and proven resilience in any economic climate.
Published: June 18, 2025
Explore BasketGen-X Core Holdings
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Published: June 17, 2025
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Companies that create lasting value through quality and customer trust rather than chasing quick profits. This carefully curated collection showcases market leaders who've proven that patient, sustainable growth leads to superior long-term returns.
Published: June 17, 2025
Explore BasketInvestment Analysis
Costco
COST
Pros
- Costco has a strong and loyal customer base with 79.6 million membership households, contributing predictable, recurring revenue.
- It consistently grows same-store sales, with a 5.7% increase in its latest fiscal quarter despite macroeconomic uncertainty.
- Costco operates a unique membership model that supports steady revenue streams and high-margin income.
Considerations
- Shares trade at a very high price-to-earnings ratio near 57-60, which may indicate overvaluation and potential multiple contraction.
- Costco's higher stock price volatility suggests greater risk compared to some peers like Home Depot.
- Its no-frills warehouse model limits appeal to more premium or convenience-oriented shoppers and could cap growth.
Pros
- Home Depot is the clear leader in the large $1 trillion home improvement market with a 16% market share and growth runway.
- The company has reasonable valuation metrics with a price-to-earnings ratio around 25-27, making it more attractively priced.
- It benefits from significant untapped homeowner equity and an aging housing stock, driving demand for home upgrades.
Considerations
- Home Depot experiences more cyclical demand sensitivity and recent softness in same-store sales growth.
- The home improvement sector faces consumer hesitation toward discretionary big-ticket spending, impacting near-term performance.
- Despite its leadership, growth may be challenged by competition and execution risks in maintaining omnichannel capabilities.
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