Costco's stock has a great track record of recovering from adversity.
Costco's stock has a great track record of recovering from adversity.
When Costco Wholesale (COST +1.14%) stock falls 10% or more from its peak, like right now, history says it usually sets a new high within a year, though there are a couple of important (and recent) counterexamples to be aware of. The stock's most recent record high was in May of this year, and a recovery is already in progress; at the lows, its drawdown was just a hair over 18%.
For shareholders like yours truly, these stretches of bumpiness are annoying, but they're also great opportunities to buy more shares. Let's take a look at how Costco tends to perform in the periods after these declines to see why that's the case.
This stock doesn't stay down for long
Over the last 10 years, Costco's stock fell 10% or more seven different times before this most recent one drop. In five of those instances, it went on to set a new record within 12 months. And, in all seven cases, it eventually recovered, with the slowest recovery taking around 19 months.
The 2017 slump happened after Amazon agreed to buy the grocer Whole Foods in June, and at least one investment bank downgraded Costco's rating over fears that its members would defect. It went on to hit a fresh record high on Nov. 30, 2017 after its memberships kept growing anyway.
What's more, Costco's earnings per share (EPS) grew consistently throughout 2017 to 2026, showing significant resilience against the impacts of the pandemic and the inflation spike afterwards. Members keep renewing all the while, which is why Costco is at home among stocks with wide moats, with 92.3% of U.S. and Canadian members renewing their memberships in the fiscal fourth quarter of 2026.
The exceptions to the stock's habit of bouncing back are the two most recent data points, which suggest investors shouldn't be quite as gung-ho about its resilience as in the past.
$989.11+$11.10 (+1.14%)
NASDAQ · As of 4:00 PM ET 10/16/26
Averytin News Financial update.