Costco’s Secret Growth Engine May Be Running Out of Gas

Costco's recent strong sales growth has been significantly driven by elevated gasoline prices, which the company uses as a loss-leader to attract members. As fuel prices normalize following their May peaks, the company's comparable sales growth is expected to decelerate. While the stock has declined over 10% from its all-time high of $1,096, analysts debate whether new members will provide durable revenue or if the growth was merely temporary. The stock currently trades at 46x forward earnings, and investors await June sales figures and September earnings to determine if Costco can justify its premium valuation without the gas tailwind.