Costco Wholesale Corporation COST is expanding its same-day delivery reach through DoorDash and Uber Eats, offering more ways for members to shop without visiting a warehouse. During its fourth-quarter fiscal 2026 earnings call, management informed that its Uber Eats partnership had expanded from 17 states to nationwide coverage, alongside the broader rollout of the DoorDash partnership. These developments complement Costco's successful delivery collaboration with Instacart in both the United States and Canada.
The key question is whether faster, easier ordering increases member spending or simply shifts sales from physical locations. Management noted that sales through these marketplaces have been largely incremental, with limited impact on the core warehouse grocery business. Customers often use delivery for fill-in purchases while continuing their regular warehouse visits. Different platforms also attract different shoppers, suggesting that greater delivery choice could create additional shopping occasions.
Convenience is what matters. Average delivery times across the three platforms are under an hour, and management said most same-day orders can be completed within 45 minutes when requested. The services cover needs ranging from groceries to prescriptions, while users of the newer marketplaces tend to be considerably younger than Costco's overall member base.
Management indicated that digitally enabled sales exceeded $33 billion in fiscal 2026, growing more than 20%. Momentum continued into September, with digitally enabled sales rising 19%, demonstrating sustained demand for convenient purchasing channels. Broadening accessibility via DoorDash and Uber Eats is an effective way to capture new shopping trips, attract younger demographics and lift digital sales without cannibalizing foot traffic inside physical wholesale locations.
How Are Walmart and Target Competing in Fast Delivery?
Walmart Inc. WMT is strengthening its fast-delivery capabilities to capture additional shopping occasions and deepen customer engagement. In second-quarter fiscal 2027, Walmart's U.S. e-commerce sales grew 24%, supported by more than 40% growth in store-fulfilled deliveries. Fast delivery increased 48%, while sub-30-minute delivery expanded to 38 U.S. markets. Walmart noted that customers using faster delivery shop more frequently, reinforcing its potential to drive incremental spending.
Target Corporation TGT is also leveraging same-day fulfillment to strengthen convenience and drive digital sales. In second-quarter fiscal 2026, Target's digital comparable sales rose 8.7%, led by more than 25% growth in same-day delivery. This outpaced Target's overall comparable sales growth of 3.8%, highlighting the growing importance of faster fulfillment. Target's continued emphasis on convenience and digital accessibility could encourage more frequent purchases and support incremental sales opportunities.
How Does Costco Stack Up Against Its Industry?
Costco stock has climbed 17.4% year to date compared with the industry’s rise of 13.2%.
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What Does Costco’s Current Valuation Suggest?
Costco's forward 12-month price-to-earnings ratio stands at 43.86, higher than the industry’s ratio of 28.88. However, it is trading below its 12-month median level of 44.12, indicating some moderation in valuation.
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What Do Earnings Estimates Signal for Costco?
The Zacks Consensus Estimate for Costco’s current fiscal-year sales and earnings per share implies year-over-year growth of 8.5% and 11%, respectively. For the next fiscal year, the consensus estimate indicates sales growth of 7.2% and earnings growth of 9.8%.
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Costco’s Investment Case
Costco’s strong membership loyalty, sustained comparable sales growth, warehouse expansion and rising digital engagement support its long-term growth prospects. Same-day delivery partnerships offer incremental sales opportunities, while pricing investments reinforce its value proposition. However, premium valuation, moderating membership growth and ongoing cost pressures temper near-term upside potential, warranting a balanced view of the stock. Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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