Source: davit kirakosyan
Telsey Advisory Group Maintains Outperform Rating on Costco Ahead of December Sales Report
Telsey Advisory Group, a leading independent equity research and consulting firm, has maintained its Outperform rating and $1,100 price target on Costco Wholesale (NASDAQ: COST) in anticipation of the company’s upcoming December sales report. This rating comes as the firm prepares for Costco’s sales results for December, which are scheduled to be released after the market closes on Wednesday, January 7, 2026.
Telsey Forecasts Modest Comparable Sales Growth for Costco
Telsey Advisory Group has forecasted modest growth in total comparable sales for December 2025, expecting a 2.2% increase. This represents a slowdown from the 7.4% growth seen in the same period the previous year. However, it is important to note that this estimate excludes the estimated net benefit of approximately 20 basis points from gasoline prices and foreign exchange.
When considering core merchandise comparable sales growth, the firm projects a 2.0% increase, compared to the 9.9% growth seen a year earlier. This projection takes into account the estimated net benefit from gasoline prices and foreign exchange rates.
Regional Sales Projections for Costco
On a regional basis, Telsey anticipates that U.S. comparable sales, excluding gas, will rise by 1.0%, down from the previous year’s increase of 9.8%. In Canada, the firm projects comparable sales, excluding gas and foreign exchange, at 4.0%, down from 10.3% the previous year.
For other international markets, Telsey predicts a comparable sales growth of 5.0%, excluding foreign exchange. This is a dip compared to the 9.8% growth experienced in the same markets the previous year.
Gasoline Prices and Currency Trends Impacting Sales
The firm also highlighted several factors that could influence Costco’s comparable sales. One such factor is the decline in gasoline prices, which dropped in the low single-digit range during December. This is expected to create a roughly 20 basis point headwind to comps. On the other hand, a weaker U.S. dollar could provide a tailwind of an estimated 40 basis points, based on recent currency trends.
Projected Traffic and Average Ticket Growth
In terms of customer traffic, Telsey predicts a growth of 0.5%, a significant decrease from the 5.5% growth seen last year. However, this decline is consistent with the trend of consumers continuing to visit stores frequently in search of value amidst the ongoing economic uncertainties.
The firm also expects average ticket growth of 1.7%, roughly in line with the prior year. This figure is supported by tariff-related inflation and positive category trends.
Digital Sales and Category Trends
On the digital front, Telsey forecasts a 5.0% increase in sales, a slowdown from the 34.4% growth witnessed last year. This growth is expected to be driven by gains in non-food categories and the ongoing benefits from assortment expansion, including the introduction of CostcoNext.com, and targeted marketing around key events.
In terms of category trends, the firm expects consistency with the company average. Non-food sales are expected to benefit from holiday and gift-driven demand. Meanwhile, Food & Sundries and Fresh Foods are expected to remain solid due to at-home consumption trends and Costco’s value-focused assortment.
In conclusion, Telsey Advisory Group’s Outperform rating reflects their confidence in Costco’s ability to continue delivering solid sales performance, despite the challenging market conditions. The firm’s projections also underscore the potential impact of external factors such as gasoline prices and foreign exchange rates on the company’s sales figures.