What Cheaper Gas Would Mean For Costco’s Sales And Margins Trefis Team Mon, October 12, 2026 at 11:07 AM EDT 3 min read COST +0.90% ^GSPC -0.05% WMT +0.83% AMZN -0.47% TGT -0.98% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Costco Wholesale (COST) stock currently trades at 45.6 times earnings, compared with 21.9 for the S&P 500. Investors paying that price may be counting on growth. That growth has materialized, as September net sales rose 13.0% from a year earlier. However, gas hit $4.32 a gallon in mid-September, and those higher fuel costs add to Costco's sales. So how much of that growth would go if gas prices came back down?
How Much Of Costco's Sales Growth Comes From Gas?
Gas price inflation lifted Costco's sales by approximately 3% in fiscal Q4 2026, management said on the September 24, 2026 call. Comparable sales rose 9.4% that quarter, but the increase was 6.7% once gas prices and currency were taken out.
Gas itself grew much faster than the rest of the business. Management put the rise in comparable gas sales in the mid-30s percent, noting that the increase came from a higher price per gallon alongside record volumes.
September's sales also faced scrutiny. Citing a Wall Street analyst, Barron's reported on October 8, 2026, that part of the monthly jump in comparable sales came from one-off, lower-margin boosters.
The underlying drivers of expensive gas could change. Management tied the higher cost of gas and motor oil to the ongoing conflict in the Middle East. They also cautioned that the situation is still uncertain, and that inflation is difficult to predict.
Expensive Gas Lowered Costco's Margin Rate In Fiscal Q4
While cheaper gas would lower Costco's sales, it would probably lift its margin rate. The retailer's reported gross margin rate fell 11 basis points from a year earlier in fiscal Q4 2026, landing at 11.02%. Excluding gas inflation, management said the rate was 20 basis points higher than a year earlier.
The stock itself may be more exposed than the underlying profit. Costco's P/E has ranged from 26.8 to 56.0 over the past ten years, placing today's multiple in the upper half of that historical range. Buyers paying that much have less room for a slower sales figure. Costco stock has fallen sharply in the past. In 2022, it dropped 31% from peak to trough, against a 25% peak-to-trough decline for the S&P 500.
Outside Gas, Costco's Warehouses Are Still Growing
Shopping frequency rose 3.3% worldwide in fiscal Q4 2026, and management said sales excluding gas remain very robust. Members are also renewing their memberships. The renewal rate in the U.S. and Canada was 92.3%, up 10 basis points from the quarter before.
Costco's broader finances are not the issue either. The company generated an operating profit over the last twelve months that was 80.6 times its interest expense.
Costco reports sales for every retail month, and September's results were published on October 7, 2026. Comparable sales rose 11.4% that month, and 7.6% excluding gasoline and currency. If the figure excluding gasoline and currency holds near 7.6% in coming months while gas gets cheaper, it would show that Costco's growth does not need expensive gas.
Does This Mean You Should Act On COST?
Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.
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