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Walmart (WMT) and Costco Wholesale (COST) are the two retail stocks with the clearest recent operating evidence for a holiday-season watch list. Walmart combines grocery frequency, general merchandise and fast store-fulfilled delivery; Costco combines membership income, warehouse scale and strong comparable-sales momentum.
That is an operating case, not a complete buy recommendation. Current share prices, valuation multiples, free-cash-flow yields and an independent 2026 holiday-sales forecast still need to be checked before you invest.
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Why these two retailers stand out
Holiday retail winners need more than a popular product range. They need traffic, inventory availability, convenient fulfillment and a customer proposition that holds up when households are watching their budgets. Walmart and Costco approach that challenge differently, giving investors two distinct operating profiles.
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Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →- Walmart: a broad, high-frequency model anchored by groceries and general merchandise, with stores that also serve as fulfillment hubs.
- Costco: a membership-warehouse model that uses a limited assortment, low prices and rapid inventory turnover to drive large baskets and recurring fee income.
The figures below come from each company’s 2026 disclosures and should be read with their stated adjustments and calendar effects.
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Walmart (WMT): broad demand and fast fulfillment
What the latest results show
In its Q2 FY27 presentation dated August 20, 2026, Walmart reported total revenue of $187.9 billion, up 5.9% year over year. Global e-commerce grew 23%, while adjusted operating income increased 17.4% in constant currency.
Walmart U.S. net sales were $125.2 billion, with U.S. e-commerce up 24%. U.S. comparable sales rose 2.6%; transactions excluding fuel increased 1.5% and average ticket excluding fuel rose 1.1%. About 37% of store-fulfilled orders were delivered in less than three hours, an indication of how the store network can support last-minute seasonal orders.
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Guidance entering the holiday quarter
Walmart’s August 20 earnings release guided Q3 FY27 net-sales growth of 3.0% to 3.75% and adjusted operating-income growth of 2.0% to 4.0%. For FY27, management guided net-sales growth of 4.0% to 5.0% and adjusted operating-income growth of 7.0% to 8.5%, all in constant currency.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsWhy the model could fit holiday demand
Grocery visits can bring customers into stores frequently, where they may add toys, electronics, apparel and home goods. Walmart’s marketplace broadens the digital assortment, while store-fulfilled delivery can help with short-notice purchases. These capabilities support holiday readiness, but the company has not published a separate incremental holiday-sales forecast in the figures cited here.
Costco (COST): membership economics and warehouse momentum
What the latest results show
Costco’s September retail-month release, dated October 7, 2026, reported net sales of $30.02 billion, up 13.0% year over year. Total comparable sales grew 11.4% as reported, or 7.6% excluding gasoline-price and foreign-exchange effects. Digitally enabled sales increased 19.0%.
In its September 24 fiscal-year release, Costco reported fourth-quarter net sales of $93.9 billion, up 11.2%. Fiscal-year net sales reached $297.2 billion, up 10.1%. Fiscal-year total comparable sales growth was 8.4% reported or 6.6% after adjustment, and the company ended the year with 939 warehouses.
Rank #4
How Costco’s model supports seasonal spending
Costco describes its model as membership warehouses and e-commerce sites offering low prices on a limited selection of national brands and private-label products across many categories, producing high sales volumes and rapid inventory turnover. The membership relationship can encourage larger stock-up trips, while a rotating “treasure-hunt” assortment gives shoppers a reason to visit repeatedly. Digitally enabled sales growth shows that the warehouse proposition also reaches online customers.
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Read the September number carefully
Costco said a one-week shift in Labor Day lifted September total and comparable sales by a little more than 50 basis points. The 13.0% reported sales increase therefore should not be treated as a pure underlying holiday-demand rate. The 7.6% comparable-sales figure removes gasoline-price and foreign-exchange effects, but it still reflects the calendar timing noted by the company.
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Walmart versus Costco at a glance
| Measure | Walmart | Costco |
|---|---|---|
| Most recent period | Q2 FY27 presentation, August 20, 2026 | September retail month, released October 7, 2026 |
| Reported sales growth | $187.9 billion revenue, up 5.9% year over year | $30.02 billion September net sales, up 13.0% year over year |
| Comparable-sales evidence | U.S. comps up 2.6%; transactions ex-fuel +1.5%; average ticket ex-fuel +1.1% | September comps +11.4% reported, +7.6% excluding gasoline-price and foreign-exchange effects |
| Digital performance | Global e-commerce +23%; U.S. e-commerce +24% | Digitally enabled sales +19.0% |
| Operating model | Grocery, general merchandise, marketplace and store-fulfilled delivery | Membership warehouses, limited assortment and e-commerce |
| Scale metric | U.S. net sales of $125.2 billion in the reported quarter | 939 warehouses at fiscal year-end |
Which stock fits which investor?
Walmart may suit investors seeking defensive frequency
Walmart’s grocery exposure and broad price architecture can make it a diversified way to participate in holiday spending. Its e-commerce and rapid delivery figures are relevant if consumers continue shifting orders online or waiting until close to a holiday. The trade-off is that its reported growth is more moderate than Costco’s latest monthly pace, so valuation will determine whether that steadier profile is already reflected in the share price.
Costco may suit investors prioritizing membership-led loyalty
Costco’s adjusted comparable-sales growth and warehouse expansion provide stronger recent momentum. Membership fees and a curated assortment can support customer retention and inventory discipline. The trade-off is interpretive: monthly sales can be affected by gasoline, foreign exchange and calendar timing, and a high-quality business can still be an unattractive purchase if its valuation assumes unusually strong holiday results.
Risks that could change the holiday outcome
Both companies identify risks that matter directly to seasonal retail results:
- Consumer confidence and disposable income can reduce discretionary purchases.
- Inflation or deflation can change ticket sizes, margins and reported sales comparisons.
- Tariffs, trade restrictions and supply-chain disruptions can affect product costs or availability.
- Seasonal buying patterns and changing shopping habits can make quarter-to-quarter results uneven.
- Competitive pressure can force lower prices, higher fulfillment spending or heavier promotions.
For Costco specifically, separate reported and adjusted figures matter because gasoline prices, foreign exchange and the Labor Day shift affected the latest comparisons. For Walmart, the company’s forward-looking statements carry the same uncertainty: its guidance is a management outlook, not a guarantee of holiday performance.
What to check before buying either stock
- Pull a current valuation: compare forward price-to-earnings, enterprise value to operating income and free-cash-flow yield with each company’s own history and with large retailers.
- Update the operating trend: review the next quarterly release for comparable sales, e-commerce growth, inventory and gross-margin changes.
- Separate reported from underlying growth: adjust Costco’s figures for gasoline, foreign exchange and calendar effects, and keep Walmart’s constant-currency guidance in its stated context.
- Test your risk tolerance: decide whether you prefer Walmart’s diversified, high-frequency model or Costco’s membership concentration and stronger recent momentum.
- Size the position: holiday demand is seasonal and uncertain; avoid making a single-quarter thesis the whole investment case.
On operating evidence alone, Walmart and Costco are credible candidates for further valuation work before the 2026 holiday season. A final buy decision requires the missing piece: what the market is charging for those earnings and cash flows today.
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