WMT

Walmart has delivered strong gains for long term shareholders in recent years, so the key issue now is whether its current US$121.12 share price is still aligned with what the retailer earns. With the stock moving higher again in recent weeks, the question for you is how much of Walmart's earnings power is already reflected in today's valuation. - Walmart has returned 160.6% over the past 5 years, which puts a lot of accumulated optimism on the line when you ask what its earnings justify today. - New efforts around memberships, automation and AI driven shopping experiences can influence expectations for future profitability, cash generation and the earnings base investors are effectively paying for. - Your read on Walmart is one view; the desks covering it have another. See what analysts think Walmart's shares could be worth. The issue now is whether that recent share price, after years of gains and a busy run of announcements, is reasonable when you line it up against Walmart's earnings. Walmart is one case study in how much earnings power can be priced in after a strong run, but you can also start from a clean slate by screening for 30 high quality undervalued stocks. The P/E ratio fits Walmart because investors often look at what they are paying for each dollar of earnings at a large, established retailer. At about 43.5x, Walmart's current P/E is well above both the Consumer Retailing industry average of 18.0x and the broader peer group near 24.6x, so the market is applying a clear premium to its earnings base. The fair multiple implied by the tailored model that blends Walmart's growth profile, margins, size and risk comes in lower than where the shares trade today, so on this framework the stock screens as overvalued on earnings. Because the retailer is investing heavily in areas like automation, AI shopping tools and memberships, especially after moves such as the combined Walmart+ and Sam's Club Plus offering, buyers today are already paying a high price for each dollar of profit. Explore the numbers behind Walmart's P/E valuation. Simply Wall St Narratives for Walmart pick up where the P/E debate leaves off and explain which paths for growth, profitability and earnings would need to occur for the stock to warrant a meaningfully higher or lower price than today. Instead of relying on a single ratio or model output, they unpack the future assumptions behind that number so you can watch in real time whether Walmart's actual progress continues to align with that story on the Community page. One of the top community narratives on Walmart: roughly fairly valued The main factor that has to go right is the continued growth and profitability of higher margin alternative profit pools such as advertising... Discover why this Narrative puts Walmart at roughly fairly valued. Price tells you what the market thinks of Walmart today, but the people setting priorities, signing off on capital allocation and how they are rewarded for those choices can shape what happens next. See who runs Walmart and how they are paid. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include WMT. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Costco Wholesale Corporation COST pairs durable membership economics with steady sales growth and expanding digital reach. Fourth-quarter fiscal 2026 revenues reached $95.72 billion, while earnings came in at $6.60 per share, excluding a 15-cent nonrecurring benefit related to tariff refunds. The growth case remains attractive, but the stock already reflects much of that quality. Investors must weigh Costco's operating consistency against a forward earnings multiple that sits well above its industry and the broader market. The Zacks Consensus Estimate calls for fiscal 2027 revenues of $328.53 billion, up 8.4% from fiscal 2026. Earnings are projected to rise 11% to $22.70 per share, extending Costco's multiyear earnings compounding. Fourth-quarter comparable sales increased 9.4%, or 6.7% after excluding gasoline-price and foreign-exchange effects. Shopping frequency rose 3.3%, supporting the view that growth is being driven by continued member engagement rather than price alone. Image Source: Zacks Investment Research Paid memberships increased 3.8% to 84.1 million in fiscal 2026, while Executive memberships climbed 9.4% to 42.3 million. Executive members accounted for 75.2% of worldwide sales, giving Costco a large base of higher-spending customers. Renewal rates reached 92.3% in the United States and Canada and 89.8% worldwide. Membership fee income also grew 7.3% in the fourth quarter, reinforcing the recurring-revenue foundation of the warehouse model. Digitally enabled sales exceeded $33 billion in fiscal 2026 and increased more than 20%. Fourth-quarter digitally enabled comparable sales rose 19.5%, while website and app traffic advanced 30% as Costco expanded delivery partnerships and personalization efforts. The competitive benchmark remains demanding. Walmart Inc. WMT reported 23% global e-commerce growth in its fiscal 2027 second quarter, while Target Corporation TGT posted 8.7% digital comparable-sales growth in second-quarter fiscal 2026. Costco's digital momentum therefore adds another growth channel without replacing its warehouse-led model. COST trades at 42.3X forward 12-month earnings, compared with 28.7X for the Zacks sub-industry and 19.6X for the S&P 500. The stock's five-year median multiple is 42.7X, indicating that investors have long assigned Costco a premium valuation. That premium still reduces the margin for error. Slower earnings growth, softer comparable sales or a reassessment of premium retail valuations could pressure the shares even if the underlying business remains healthy. Image Source: Zacks Investment Research Fourth-quarter gross margin fell 11 basis points to 11.02%. Although gross margin improved 20 basis points excluding gasoline inflation, a $152 million LIFO charge and higher costs in electronics, fuel-related products and other commodities weighed on reported profitability. Selling, general and administrative expenses improved 27 basis points as a percentage of sales, but only two basis points excluding gasoline inflation. Higher labor, health-care and liability costs, merchandise inflation and tariff uncertainty could limit operating leverage if sales growth moderates. Costco's growth profile remains attractive, but its valuation sets a high bar for execution. The current setup supports a measured stance rather than treating operating strength alone as sufficient reason to chase the stock. COST carries a Zacks Rank #3 (Hold). Its Growth Score of A and VGM Score of B support the quality of its growth characteristics, while a Momentum Score of C is neutral and a Value Score of D underscores the valuation concern. For now, the combination points to patience unless earnings growth or valuation becomes more favorable. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Costco Wholesale Corporation (COST) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Walmart Inc. (WMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Amazon.com (AMZN) stock trades at 20.5 times earnings for the twelve months to June 2026. Those earnings actually exceeded the company's operating profit. In the quarter to June 2026 alone, net income was $62.6 billion against operating income of $27.5 billion. The scenario grows all of those earnings, including the part from outside the business. Amazon's multiple is well below the 41.2 average recorded at the stock's last 12 fiscal quarter ends, partly because those earnings were so high. So is the market underpricing Amazon, and what would the stock be worth in three years if its business grew and the multiple stayed put? What Could Amazon Stock Be Worth At Today's P/E? Under a few Trefis assumptions, Amazon stock would be worth about 34.7% more in three years at today's P/E. This scenario models revenue growing a little slower than it did in the twelve months to June 2026. The operating margin ends nearer today's level than its lower past average. Here is Amazon today beside the scenario three years on: | Today | In three years (scenario) Revenue | $776 billion | $1,131 billion Operating margin | 12.1% | 11.2% Earnings | $135 billion | $182 billion P/E | 20.5 | 20.5 Share price | $254.08 | $342.25 All of that gain would come from Amazon's business, none from a higher multiple. The scenario holds the P/E at today's level, which sits well below its old average. Within the business operations, the gain comes from Amazon selling more. Yet part of that progress is lost to the slightly lower margin. Is Recent Growth Ahead Of The Scenario's Pace? Amazon's revenue grew 15.8% in the twelve months to June 2026, outpacing the scenario's 13.4% a year. Growth accelerated in the quarter to June 2026. It reached 19.6%, against 13.3% in the same quarter of 2025. Management's only revenue guide is for the quarter to September 2026. They expect growth of 9% to 12%, which falls below the scenario's yearly pace. Amazon reports three segments: North America, International and Amazon Web Services (AWS). AWS grew fastest in fiscal 2025. It expanded by 19.7%, up from 18.5% in fiscal 2024. North America is the largest segment and grew 10.0% that year. At that rate, the other two segments would need to grow faster than the scenario's pace. International grew 13.3% in fiscal 2025, just under it, so AWS would carry most of the load. Amazon Stock With Weaker Revenue, Margins Or P/E In each row below, one assumption differs from the scenario while the rest stay as they are: If instead | Upside Nothing changes (the scenario) | 34.7% Revenue growth of 11.4% a year instead of 13.4% | 27.7% Operating margin of 9.0% in year three instead of 11.2% | 8.7% 5 years at the same assumptions instead of 3 | 73.2% Amazon starts from a high margin. It stands at 12.1% today, against a 9.0% average at quarter ends from June 2023 to March 2026. The scenario also holds the share count at today's level. Yet Amazon's diluted count rose 4.3% in the three years to June 2026. With more shares, each one would get a smaller part of the gain. Taken alone, revenue growth could slow from 15.8% in the twelve months to June 2026 to 2.7% a year before three years of owning the stock return nothing. On those same terms, the operating margin could fall from 12.1% today to 8.3%. The P/E could fall from 20.5 today to 15.2. Looking ahead, Amazon's revenue growth for the quarter to September 2026 is the measure to watch in the report expected on or around October 28, 2026. How To Act On AMZN? Now you know AMZN better. And that's our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks. There is a smarter choice. Since its inception, the Trefis High Quality (HQ) Portfolio has beaten the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If you'd rather act on AMZN itself: Play Offense | Play Defense Learn More About AMZN & Invest | Save Taxes On Capital Gain Earn From AMZN Cash Secured Puts | Covered Call Against AMZN See Your Next Steps On AMZN

Following its $12.5M Series A, Atomic adds a supply chain leader with 15+ years at Deloitte, Walmart eCommerce and high-growth consumer brands to partner with customers BOSTON, Oct. 13, 2026/PRNewswire/ -- Atomic, the AI-native supply chain planning platform, today announced that Chad Brinton has joined the company as General Manager, Strategic Accounts. Brinton brings more than 15 years of supply chain and operations leadership, spanning management consulting, e-commerce analytics at Walmart, and operations for some of the fastest-growing direct-to-consumer brands of the last decade. As General Manager, Brinton will partner with Atomic's customers – including DoorDash's DashMart, GoodChop (HelloFresh), and Braintree-based OOFOS – to design solutions that meet their planning goals and will help shape the Atomic product roadmap based on what planners need most. His focus is squarely on customer outcomes: helping fast-growing companies reduce the working capital required to stay in stock as they scale. Brinton knows the problem from the customer's side of the table. He was Atomic's first customer as SVP Operations at Made in Cookware, and he pairs that operator's perspective with experience building planning analytics at Walmart eCommerce and developing supply chain software applications. "Chad was the first person to bet on Atomic as a customer, so he understands exactly what our customers are up against and what it takes to plan well when the business is growing fast," said Michael Rossiter, co-founder and CEO of Atomic. "Bringing on an operator who has sat in the planner's seat proves how seriously we take building an enterprise-grade customer function. As we scale following our Series A, Chad will make sure every deployment is measured by the business results our customers care about." "I partnered with Atomic as a customer because we needed a better way to balance inventory and cash, and the team delivered," said Brinton. "Fast-growing companies are under constant pressure to keep up with demand without tying up too much capital in inventory. I'm excited to help more planning teams unlock growth, and to shape our product roadmap to solve our customer's needs." Brinton holds degrees in Business and Mathematics. He began his career in Deloitte's Manufacturing & Supply Chain Operations consulting practice before moving into e-commerce strategy at Walmart, where he developed planning analytics for Walmart eCommerce. He went on to lead operations for high-growth direct-to-consumer brands, serving as a founding member of Made In Cookware and as Head of Operations at True Classic. Most recently, Brinton has focused on building supply chain software solutions, bringing a combination of operational expertise and software development experience to Atomic's platform and customers. Brinton's appointment comes on the heels of Atomic's $12.5 million Series A, co-led by Klass Capital and Madrona Venture Group. The company plans to double its headcount by the end of 2026, with most new roles based in Boston and New York. To learn more about open roles, visit www.atomic.supply. About Atomic Atomic is building the AI control system for physical goods companies. Founded by former Tesla planning leaders, Atomic gives planning teams a model of their business at the product level, recommendations that show their reasoning, and AI agents that take on more of the work as trust builds. Atomic is backed by DVx Ventures, Klass Capital, Madrona, Alumni Ventures, and Sandberg Bernthal Venture Partners. Learn more at atomic.supply. Media contact: Lindsay Mahaney [email protected] View original content:https://www.prnewswire.com/news-releases/atomic-names-chad-brinton-general-manager-to-help-enterprise-planning-teams-turn-supply-plans-into-results-302906559.html

Walmart Inc. (NASDAQ:WMT) and Costco Wholesale Corporation (NASDAQ:COST) compete for household spending through different models. Walmart combines stores, delivery, marketplaces and advertising. Costco relies on low merchandise markups and a paid membership relationship. Both can be resilient without being inexpensive. Trailing earnings cost investors about 39 times for Walmart and 45 times for Costco at the October 7 close. On trailing free cash flow, that order reversed: Walmart cost about 64 times and Costco 44 times. The reversal makes investment spending central to the stock choice. WMT ranks fourth on our list of 10 Best Bear Market Stocks to Invest In Right Now. See which three stocks attracted more hedge funds and generated higher free cash flow than Walmart. Pixabay/Public Domain Our Walmart analysis examines how faster delivery and cross-border access expand the retailer's online opportunity. The broader e-commerce screen shows how Walmart's fulfillment model differs from Costco's growing digital channel. Walmart's fiscal second-quarter revenue increased 5.9% to $187.9 billion. Global e-commerce sales grew 23%, advertising grew 38%, and membership fee revenue increased 17%. Its bull case is that a large retail network can support higher-value services while making delivery more convenient. The spending required to build that proposition is already visible. First-half operating cash flow rose to $19.71 billion from $18.35 billion, but equipment spending increased to $14.18 billion from $11.41 billion. Free cash flow consequently fell to $5.53 billion from $6.94 billion. The decline is not showing waste, what it does expose is expansion costs obscured by the earnings multiple. Walmart also reported tariff-refund benefits in operating-income growth, so the headline increase should not all be treated as an enduring operating improvement. Walmart had 111 holders in Insider Monkey's Q2 2026 data, up from 99 in Q1. Fisher increased shares about 2%. Costco's fiscal fourth-quarter sales rose 11.2% to $93.9 billion. Annual membership fees increased about 11% to $5.91 billion. Membership reinforces purchasing scale and repeat visits. The bear case is its already high earnings price and thin merchandise economics. Membership revenue should not be equated with pure company profit; the retailer still has employees, warehouses and operating costs. Its fourth quarter covered 16 weeks, unlike Walmart's quarter, so their revenue levels are not a like-for-like quarterly comparison. Costco had 104 holders, down from 107 in Q1, while Fisher increased shares about 2%. Trailing operating cash flow less capital spending was about $13.51 billion for Walmart and $9.38 billion for Costco, ending in July and August 2026, respectively. Costco's figure uses the October 7 annual filing. At fixed October 7 equity values, Walmart needs about $19.28 billion annually to match Costco's 44.5 times cash multiple, 43% above its trailing amount. That is a hurdle -- Walmart could earn it if investments produce more profitable sales without another equivalent spending increase. Costco could lose its advantage if weaker membership economics or heavier investment depress cash conversion. A defensive business also needs a valuation test. Our bear-market screen explains which financial filters Walmart clears and why those filters do not establish that its shares are cheap. Costco's September 15 short interest was 7.36 million shares, 1.7% of float. Costco gets the edge on current cash economics despite its higher earnings multiple. Walmart becomes preferable if omnichannel investment lifts sustainable cash toward that hurdle. While we acknowledge the potential of WMT and COST as investments, we believe certain other AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. Disclosure: None. Follow Insider Monkey on Google News.

- Solana surged 48% in Q3 2026 but still sits 58% below its $293 all-time high, with a realistic year-end ceiling near $180. - Solana ETFs posted 11 straight weeks of inflows, including a best-in-10-months week of $188 million, accumulating nearly $2 billion in total holdings. - A Fed rate hike at its October 27-28 meeting or a week of ETF outflows could send Solana below its $124 year-start price. - Building a portfolio and living off one are two completely different skills, and almost nobody teaches the second. This problem is what The Definitive Guide to Retirement Income helps, and it is free today. Read more here. (Sponsor) Solana (CRYPTO:SOL) saw a remarkable gain of 48% during the third quarter of 2026, rising from around $80 in early July to $118 by September 30. This performance outpaced Bitcoin's (CRYPTO:BTC) 36% and XRP's (CRYPTO:XRP) 37% increases over the same period. Only Ethereum (CRYPTO:ETH), which climbed 57%, performed better among the major cryptocurrencies. As of October 2, Solana is priced at about $122, still 58% below its all-time high of $293, reached on January 19, 2025. So, how high can Solana realistically go before the year concludes on December 31? Right now, Solana's market value—calculated by multiplying its price by the approximately 588 million coins in circulation—stands at around $72 billion. To reach the previous record of $293 billion, its market value would need to jump to about $172 billion, meaning Solana must more than double its value and add around $100 billion in just three months. Solana's token supply also continues to grow. Solana rewards validators—who maintain the network and process transactions—with new coins, meaning more coins will need to share any potential price increases. This makes hitting the previous record harder than the percentage gain alone suggests. ------ Many successful investors eventually reach the same moment. The saving is done, the portfolio is built, and the question quietly changes from how much can I grow this to how much can I take out? Get that second question wrong and decades of good investing can come apart in a handful of years. That is exactly what The Definitive Guide to Retirement Income helps answer. It covers what your retirement could actually cost, which income sources are worth using, and the withdrawal math that decides whether the money lasts. It is free today from Fisher Investments. Read More Here › ------ If Solana were to replicate its third-quarter performance and gain another 48% by December 31, it could end 2026 around $180. That would still be a strong showing but would be about 39% short of its previous record. Additionally, Solana began the year at roughly $124, so a positive close is just a 2% increase from its current level. U.S. spot Solana exchange-traded funds (ETFs), which hold the coin and trade like stocks, indicate solid demand for Solana. These funds attracted $188 million in the week ending September 27, marking their best week in 10 months and extending inflows to 11 consecutive weeks. Since July 13, these funds have accumulated approximately 4.37 million SOL and now hold about $1.93 billion in total—roughly 2.8% of Solana's market value. However, demand for these ETFs can fluctuate. For instance, in early September, Solana ETF inflows dropped by 96% in just one week, but buying picked back up thereafter. The consistent influx of funds supports the possibility of Solana reaching $180, but it doesn't guarantee it. A week of net outflows could signal that the momentum behind the third-quarter rally is fading. The Federal Reserve raised interest rates to a range of 3.75% to 4% on September 16. Traders are now watching the Fed's meeting on October 27-28, where it may discuss another rate increase. Following a cooler inflation report on September 30, the chance of an October hike fell from about 71% to below 50%. Investors are also weighing bond returns. As of September 25, the 10-year Treasury yield was 5.17%, a return backed by the U.S. government, while Solana pays no interest unless staked. Higher interest rates could make bonds more appealing compared to cryptocurrencies like Solana. Realistically, Solana could aim for a ceiling close to $180 in 2026 if it repeats its impressive 48% performance from the third quarter. While a return to its previous $293 record is unlikely by December 31, a positive close is just about 2% higher than the current value. However, Solana still trades 58% below its peak, and any negative quarter could erase much of the gains made. Two key indicators will likely determine Solana's trajectory. If the Fed holds rates at its October meeting and ETF inflows continue into November, a push toward $180 seems achievable. On the other hand, if the Fed raises rates and funds see a week of outflows, Solana could give back part of its 48% gain and finish 2026 lower than where it started. (Sponsor) Most people spend their entire working lives focusing on one thing: growing a pile of money. Then they retire and discover the skill they actually need is close to the opposite. Turning that pile into steady income, year after year, through good markets and bad, without ever running out. It may be the least discussed and most consequential transition in personal finance, and plenty of otherwise careful investors walk into it with no real plan. That is exactly what The Definitive Guide to Retirement Income helps answer. It is a free guide from Fisher Investments covering what your retirement will really cost, where the cash flow should come from, and how much you can safely withdraw each year. Learn more here. Learn More Here › Contact [email protected] for any questions or corrections.

The Kroger Co. KR exited the second quarter with a widening gap between digital momentum and core sales growth. Adjusted e-commerce sales rose 20%, but identical sales excluding fuel increased only 0.2%. That contrast now defines the fiscal 2026 setup. Kroger's digital, retail-media and private-label businesses are improving the profit mix, while a lower comparable-sales outlook and persistent cost pressure keep the top-line picture restrained. The Kroger Co. price-consensus-eps-surprise-chart | The Kroger Co. Quote Second-quarter fiscal 2026 adjusted earnings rose 4.8% year over year to $1.09 per share, beating the Zacks Consensus Estimate of $1.05. Cost savings, stronger pharmacy and fuel performance, and better e-commerce profitability supported earnings. Total sales increased 2% to $34.62 billion but missed the consensus mark of $34.69 billion. Identical sales excluding fuel rose 0.2%, and Kroger cut its fiscal 2026 identical-sales outlook to 0.2%-0.8% from 1%-2%. Adjusted earnings guidance remained $5.10-$5.30 per share. Image Source: Zacks Investment Research Adjusted e-commerce sales advanced 20% in the quarter, following 19% growth in the first quarter. New digital customers also increased 20%, while pickup perfect-order performance reached a record level and delivery orders completed in less than an hour continued to grow. Kroger also delivered a second consecutive quarter of profitable e-commerce growth when combined with retail media. The company is emphasizing faster, store-based fulfillment as it works to reduce the cost to serve and improve reliability across digital grocery. Kroger Precision Marketing profit increased 24%, its best growth rate since 2021, while media monetization improved 88 basis points. First-party customer data covering 63 million households gives the business scale to support personalization and advertising activity. Our Brands added another source of support. Sales outpaced national brands, penetration increased about 50 basis points and Private Selection sales rose more than 14%. Walmart Inc. WMT, meanwhile, reported 24% Walmart U.S. e-commerce growth in its fiscal 2027 second quarter, showing how digital convenience remains a major competitive battleground in grocery retail. Kroger's 0.2% identical-sales growth excluding fuel absorbed about 265 basis points of combined pressure. The Inflation Reduction Act accounted for roughly 140 basis points, the shift from branded to generic prescriptions about 60 basis points, Cyclospora about 35 basis points and egg deflation about 30 basis points. Higher shrink, transportation expenses, healthcare costs and customer-value investments also pressured results. Costco Wholesale Corporation COST reported 7.2% adjusted U.S. comparable-sales growth and 19.8% adjusted digitally enabled growth in its fiscal fourth quarter, highlighting the competitive standard Kroger faces as rivals combine store traffic with digital expansion. Digital growth is improving Kroger's business mix, but the softer fiscal 2026 sales view means those gains still need to translate into broader sales productivity. Continued e-commerce profitability, media expansion and private-label momentum provide offsets, while pharmacy and logistics pressures remain important constraints. KR currently carries a Zacks Rank #3 (Hold). It also has a VGM Score of A, Value Score of A, Growth Score of B and Momentum Score of D. The Style Scores point to favorable value and growth characteristics but weaker momentum, while the Zacks Rank indicates a more neutral near-term earnings-revision backdrop. That combination keeps the focus on execution rather than digital growth alone. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Kroger Co. (KR) : Free Stock Analysis Report Walmart Inc. (WMT) : Free Stock Analysis Report Costco Wholesale Corporation (COST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Costco Wholesale (COST) stock rose 2.9% in the first session after its Q4 FY2026 report. The shares trade at 46.4 times earnings, more than twice the S&P 500's 21.9, so holders are counting on growth that keeps coming. What should a Costco holder take from a quarter that beat estimates and lifted the stock, yet left questions about whether its price cuts are driving more sales? Costco Beat Estimates, And Its Core Sales Held Up Holders should take away that Costco's core sales held up, and the headline figures came in ahead of forecasts. Revenue was $95.72 billion, ahead of the roughly $94.8–95.0 billion consensus. EPS was $6.75, including a $0.15 tariff refund benefit. Excluding it, EPS was $6.60, still above the roughly $6.48–6.55 consensus. The stock outpaced the market, while the S&P 500 gained 0.5% over the same session. Walmart and Target each gained less than 1%. The beat helps explain the rise, and the results also show solid demand once gas prices are set aside. Comparable sales, a like-for-like measure of sales at existing warehouses, rose 9.4% in the quarter. Adjusted for gas prices and currency, they rose 6.7%. Management said higher gas prices added nearly 3% to sales. Traffic, meaning how often members shopped, rose 3.3%. Costco also received money from tariff refunds in the quarter. Where Is Costco's Tariff Refund Money Going? Most of it is going back to members as lower prices. Costco received $184 million in tariff refunds in Q4 FY2026. In the second half of the quarter, it cut prices on items such as produce, meat, beverages, and hardware. Costco has already received a similar amount in Q1 FY2027, management said. Costco intends to reinvest most of that money too. Costco's reported gross margin rate was 11 basis points (hundredths of a percentage point) lower than a year earlier. Excluding gas inflation, it was 20 basis points higher. Excluding the refunds and the price cuts, core margins were 18 basis points higher. Management credited supply chain savings for that gain. On the Q4 FY2026 call, management was asked why monthly sales had not clearly picked up since the price cuts. Management answered that sales outside gas remain very robust. It described the cuts as a way to give the refund money back to members. Management gave no figure for extra spending from the price cuts, though CEO Ron Vachris said unit growth had responded well. Costco's September sales will be the next sign. Costco Reports September Sales On October 7 Costco will report September sales on Wednesday, October 7, after the market closes. The figures cover the five weeks ending October 4. The number that matters is comparable sales adjusted for gas and currency, set against the 6.7% of Q4 FY2026. A pace at or above 6.7% would show Costco holding its growth while it spends refund money on lower prices. Holders paying 46.4 times earnings are counting on that kind of steady growth. A slower pace would leave that growth in question while Costco keeps handing refund money back to members. Beyond COST: A Systematic Way To Grow Your Money Before you decide on COST, consider a better choice. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking.

Dollar General Corporation DG received a meaningful boost from tariff refunds during the second quarter of fiscal 2026, supporting margin expansion and profitability. The company reported that gross profit as a percentage of sales increased 127 basis points year over year to 32.6%. The improvement stemmed from tariff refunds, lower LIFO provisions and reduced distribution costs. Dollar General estimated that tariff refunds, after related reinvestments, contributed approximately 81 basis points to gross margin expansion during the quarter. The benefit from tariff refunds also flowed through to operating profitability. Operating profit increased 29.2% year over year to $769.2 million, while operating margin expanded 126 basis points to 6.8%. The company estimated that tariff refunds, after reinvestments, contributed approximately 66 basis points to operating margin growth. Earnings per share increased 33% to $2.48, including an estimated 25 cents benefit from tariff refunds after related reinvestments. Dollar General directed a substantial portion of the tariff refunds to enhance its customer value proposition. Management noted that the company invested in targeted promotional activities, lower everyday prices and customer-facing initiatives, including increased marketing expenses. The company received the majority of its expected tariff refunds in the second quarter and does not anticipate a material impact from tariff refunds after related reinvestments in the second half of fiscal 2026. While tariff refunds supported margin expansion during the quarter, Dollar General noted that other operational improvements also contributed to profitability, including supply-chain efficiencies, and progress in shrink and damages. Walmart Inc. WMT is also using tariff refunds as a temporary earnings and margin benefit while directing much of the proceeds back into pricing. In the second quarter of fiscal 2027, Walmart said tariff refunds helped lift gross profit and operating income, with operating income receiving an approximately 750-basis-point net benefit after price investments. Walmart expects to continue prioritizing the remaining tariff refunds toward customer experience and price investments in the second half. Target Corporation TGT saw an even more pronounced second-quarter fiscal 2026 earnings benefit from tariff refunds. Target recognized $994 million of pretax tariff refunds, which added $752 million to net earnings and $1.65 to earnings per share. Target said the refunds contributed 3.7 percentage points to both gross margin and operating margin in the quarter. Its full-year guidance includes about 90 basis points of operating-margin benefit from second-quarter refunds while excluding any potential future tariff refunds. Dollar General has seen its shares advance 8% over the past three months against the industry's 1.7% decline. Image Source: Zacks Investment Research From a valuation standpoint, Dollar General's forward 12-month price-to-earnings ratio stands at 15.13, lower than the industry's 27.38. The stock is also trading below its 12-month median level of 16.03. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Dollar General's earnings per share for the current and next fiscal year has increased by 50 cents and 32 cents to $7.89 and $8.39, respectively, over the past 30 days. Image Source: Zacks Investment Research Dollar General currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dollar General Corporation (DG) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Walmart Inc. (WMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Costco Wholesale Corporation's COST fourth-quarter fiscal 2026 results highlighted how the recovery of International Emergency Economic Powers Act ("IEEPA") tariffs could influence its earnings profile in fiscal 2027. In the fourth quarter of fiscal 2026, the company received $184 million related to IEEPA tariffs, comprising $174 million of refunds and $10 million of interest. Management said this represented a little more than one-third of the total refunds expected. Costco had already received a similar amount in the first quarter of fiscal 2027. The earnings impact, however, will depend on how much of these proceeds Costco retains versus reinvests. In the fourth quarter, tariff refunds, net of partial reinvestment in member value, contributed a nonrecurring benefit of 15 cents per share. Excluding this benefit, net income and EPS increased 12.3% and 12.4%, respectively. Management highlighted that tariff refunds and related reinvestment added nine basis points to gross margin. Management intends to reinvest the majority of future refunds in increased member value, primarily through lower prices. During the fourth quarter, such investments included reductions across produce, meat, beverages, home furnishings and hardware. Fiscal 2027 earnings could see periodic benefits from additional refunds, but the net contribution may vary depending on the pace and magnitude of reinvestment. Costco has already indicated that it intends to reinvest the majority of future refunds and separately disclose their net quarterly impact, making the distinction between reported earnings and underlying operating performance particularly important. Walmart Inc. WMT is also using tariff refunds as a temporary earnings and margin benefit while directing much of the proceeds back into pricing. In the second quarter of fiscal 2027, Walmart said tariff refunds helped lift gross profit and operating income, with operating income receiving an approximately 750-basis-point net benefit after price investments. Walmart expects to continue prioritizing the remaining tariff refunds toward customer experience and price investments in the second half. Target Corporation TGT saw an even more pronounced second-quarter fiscal 2026 earnings benefit from tariff refunds. Target recognized $994 million of pretax tariff refunds, which added $752 million to net earnings and $1.65 to earnings per share. Target said the refunds contributed 3.7 percentage points to both gross margin and operating margin in the quarter. Its full-year guidance includes about 90 basis points of operating-margin benefit from second-quarter refunds, while excluding any potential future tariff refunds. Costco has seen its shares tumble 2.5% over the past three months compared with the industry's decline of 2.2%. Image Source: Zacks Investment Research From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 40.59, higher than the industry's ratio of 27.39. However, it is trading below its 12-month median level of 45.14, indicating some moderation in valuation. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Costco's current fiscal-year sales and earnings per share implies year-over-year growth of 7.9% and 10.4%, respectively. For the next fiscal year, the consensus estimate indicates a 7% rise in sales and 9.5% growth in earnings. The Zacks Consensus Estimate for earnings for the current fiscal year has increased by 7 cents to $22.57 per share, while the estimate for the next fiscal year has risen by 25 cents to $24.71 per share over the past seven days. Image Source: Zacks Investment Research Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Costco Wholesale Corporation (COST) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Walmart Inc. (WMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research