Costco vs Walmart Stock: Which Wins Before COST Earnings?

Costco reports fiscal fourth-quarter results after the closing bell on September 24, and the obvious comparison is Walmart. Both retailers sell stability at a premium. Only one enters Thursday’s earnings event with most of its quarterly sales already disclosed.

That difference matters more than the familiar warehouse-versus-supercenter debate. Costco has told investors that fiscal fourth-quarter net sales rose 11.3% to $93.9 billion and adjusted comparable sales increased 6.7%. The unresolved questions are membership income, merchandise margins, expenses and management’s account of the next year. Walmart has no comparable event risk on Thursday, but its shares carry their own demanding valuation after the company turned stores into fulfillment hubs and advertising inventory into a faster-growing profit stream.

The decision before Costco’s report is therefore narrow: pay more for the cleaner membership model and accept an earnings-night reset, or buy Walmart’s broader digital engine at a slightly lower multiple. On the evidence available before the open on September 24, Walmart offers the better risk-adjusted setup. Costco remains the stronger pure retailer, but its premium leaves less room for an ordinary quarter.

The short version

• Business quality: Costco wins on recurring membership economics, customer loyalty and balance-sheet strength.
• Current growth: Costco’s disclosed fiscal-Q4 sales growth is stronger than Walmart’s latest reported top-line growth.
• Digital monetization: Walmart wins because e-commerce, advertising, marketplace and fulfillment services are becoming meaningful profit levers.
• Valuation: Walmart is cheaper, although neither stock is conventionally cheap.
• Event risk: Walmart wins before Thursday’s close because Costco still has to defend its premium in the earnings call.

Costco vs Walmart stock: the numbers before earnings

The U.S. market was still closed at 7:03 a.m. EDT on September 24. IEX data supplied through Alpaca showed Costco last traded at $904.46 at the September 23 close, while Walmart finished at $110.53. Those are closing prices, not live premarket quotes.

TECHi’s Costco stock dashboard puts the company’s market value near $401.2 billion and its trailing price-to-earnings multiple at 45.46. The stock was 5.6% below its 200-day average, a useful reminder that an expensive company can still lose momentum before its fundamentals crack.

The Walmart stock dashboard shows a much larger $879.6 billion market value and a trailing P/E of 40.05. That is cheaper than Costco, but not a bargain multiple for a retailer with a roughly 3% net margin. Investors are paying Walmart for durability and for the belief that higher-margin businesses will gradually change the earnings mix.

Wall Street sees upside in both. TECHi’s Costco forecast page tracked 46 analyst ratings and a $1,069 primary target as of September 22, implying about 19% upside from the quoted price then. The Walmart forecast page tracked 48 ratings and a $127.43 primary target at the September 23 close, implying about 15% upside. Target prices are opinions rather than outcomes, but the comparison exposes the trade: Costco has more consensus upside and more immediate execution risk.

Costco has already revealed the sales beat

Costco’s scheduled event is timely because the company lists its fiscal-Q4 results and earnings call for September 24. The official Costco event calendar confirms the report will arrive after the closing bell.

The sales line should not surprise anyone who read the company’s monthly release. Costco said fiscal fourth-quarter net sales reached $93.9 billion, up 11.3%, while full-year sales rose 10.2% to $297.3 billion. Adjusted quarterly comparable sales grew 6.7%, and digitally enabled sales increased 19.8%. Those figures came directly from Costco’s August sales release.

That disclosure changes what counts as a beat. A headline revenue number near the known sales total will not settle the argument over the stock. Investors need evidence that traffic and renewals are converting into earnings without promotions, wages, freight or expansion costs eroding the benefit.

Three lines deserve attention:

• Membership fees and renewal behavior: Costco’s annual fee creates predictable cash flow, but the stock’s valuation assumes that loyalty survives price increases and international expansion.
• Gross and operating margin: Small changes matter because the merchandise model deliberately runs on thin markups.
• Capital allocation: Investors will listen for warehouse-opening plans, technology spending and any signal about special dividends or buybacks.

The previous quarter set a high standard. Costco reported $69.15 billion in net sales and $2.19 billion in net income for fiscal Q3. Diluted EPS reached $4.93, up from $4.28 a year earlier. Adjusted comparable sales increased 6.6%, and digitally enabled sales rose 20.8%, according to Costco’s fiscal-Q3 release.

The balance sheet gives management room to absorb a soft quarter. TECHi’s Costco financials show $18.95 billion in cash against $5.67 billion in total debt at the end of fiscal Q3. The same period produced $2.04 billion in free cash flow. Costco’s May 2026 Form 10-Q supports the underlying statement data.

That financial strength is why Costco deserves a premium. It does not explain why the premium must remain above 45 times trailing earnings after every report.

Walmart’s advantage is no longer just scale

Walmart’s traditional edge is purchasing power. Its newer advantage is that a grocery trip can produce delivery fees, marketplace revenue, fulfillment income and an advertising impression.

The company’s fiscal-Q2 results show the shift. Walmart reported revenue growth of 5.9%, global e-commerce growth of 23% and advertising growth of 38%. Walmart U.S. e-commerce increased 24%, while store-fulfilled delivery grew 40%. The company also generated $19.7 billion in operating cash flow and $5.5 billion in free cash flow. These figures are from Walmart’s official fiscal-Q2 FY2027 release.

The caution sits beside the progress. Walmart U.S. comparable sales increased only 2.6% excluding fuel in that quarter. Adjusted operating-income growth benefited from tariff refunds, although management said underlying growth still landed at the top of its 7% to 10% guidance range. The company raised its annual sales and operating-income outlook, but the gap between headline growth and recurring performance deserves scrutiny.

TECHi’s Walmart financials show quarterly revenue of $186.1 billion, a 3.42% net margin and a 5.04% operating margin for the period ended July 31. Walmart also carried net debt of roughly $28.4 billion. Costco has the cleaner balance sheet; Walmart has the broader engine.

That engine is the reason Walmart can plausibly grow earnings faster than sales. Advertising and marketplace services carry better economics than moving groceries through a checkout lane. If those businesses keep expanding, today’s multiple may look less extreme in retrospect. If they slow, Walmart becomes a low-margin retailer priced like a platform.

Which company has the better moat?

Costco’s moat is behavioral. Members pay before they shop, renew at high rates and accept a deliberately limited assortment in exchange for value. The fee income supports low product markups, which reinforces trust and traffic. Few competitors can copy that loop without spending years building the same purchasing scale and customer habit.

Walmart’s moat is operational. Its stores sit close to a huge share of U.S. households, so the same real estate supports shopping, pickup, delivery and returns. That network lowers the last-mile hurdle that has damaged many online retailers. Advertising then monetizes the traffic without requiring another store visit.

Costco has the more elegant model. Walmart has more ways to win.

That distinction becomes important when consumer spending slows. Costco’s members tend to be affluent, and bulk purchases can look attractive during inflation. Walmart reaches more income groups and historically gains share when households trade down. Both are defensive, but their defenses work differently.

Valuation decides the Costco vs Walmart stock verdict

Costco’s superior sales growth and net-cash position would normally settle the comparison. At 45.46 times trailing earnings, they do not. Walmart’s 40.05 multiple is also rich, yet the five-turn discount comes with a larger addressable profit pool in advertising, fulfillment and marketplace services.

The comparison is clearest as a set of conditions:

• Costco wins if membership income, margins and fiscal-2027 commentary show that double-digit sales growth can keep producing faster earnings growth.
• Walmart wins if its higher-margin digital businesses continue expanding while grocery traffic protects the core during a weaker economy.
• Costco loses the event if the quarter is merely good. A premium stock often needs an exceptional report to avoid multiple compression.
• Walmart loses the longer contest if e-commerce growth remains expensive and advertising cannot lift consolidated margins.

For investors choosing before Costco reports, Walmart is the better risk-adjusted stock. Its valuation is lower, the next earnings binary is farther away, and its digital mix supplies more routes to margin expansion. Costco is the better business for investors who prioritize balance-sheet quality and recurring membership economics, but the stock requires a cleaner result on Thursday night.

That is not a permanent ranking. A Costco pullback after a sound report could reverse the answer quickly. Price is part of the thesis, especially when both companies trade at multiples normally associated with faster-growing technology businesses.

What to watch after Costco reports

The first follow-up should compare reported EPS, membership fees, renewal trends and operating margin with the expectations embedded in the stock. Revenue matters less because Costco has already disclosed most of the sales picture.

The second test is market reaction. A share-price decline after solid numbers would signal that investors wanted a stronger margin or outlook. A rally on ordinary earnings would suggest the market is looking through near-term expenses and rewarding the durability of the model.

The third test is whether management changes the capital-return story. Costco’s net-cash balance supports flexibility, but special dividends arrive on management’s timetable rather than investors’. Any comment on warehouse growth or technology investment will help show where excess cash is going.

Walmart remains the control case. Its latest quarter provides a benchmark for digital growth, advertising momentum and cash generation. Costco does not need to imitate that model. It needs to demonstrate that the membership model can produce enough earnings growth to justify a higher price for each dollar of current profit.

The verdict

Costco enters fiscal-Q4 earnings with the faster disclosed sales growth, cleaner balance sheet and stronger membership moat. Walmart enters the same day with the lower earnings multiple, a more diversified digital profit story and less immediate event risk.

Before the report, Walmart wins on risk-adjusted value. Costco wins on pure business quality. Investors willing to own Costco through earnings are betting that margins and membership economics will turn already-known sales growth into an exceptional profit result. Investors choosing Walmart are accepting slower retail growth in exchange for more ways to expand profit per customer.

The distinction is small enough that Thursday’s Costco report can change it. Until those numbers arrive, Walmart offers the wider margin for error.

This article is for informational purposes only and does not constitute investment advice. Market prices and analyst targets can change after publication. Investors should verify current data and consider their own risk tolerance before making decisions.