Costco Stock Plunges 4.06% to 2025 Low on Tariff Uncertainty Mifepristone Exit Valuation Concerns

Costco Wholesale’s shares fell to a 2025 low on Sept. 26, with the stock dropping 2.90% over two days and a 4.06% intraday slide, marking its weakest level since April. The decline reflects mounting pressures from shifting consumer behavior, strategic policy moves, and valuation concerns.

Recent operational adjustments, including U.S. tariffs on imported goods, have raised questions about supply chain resilience. While CEO Ron Vachris emphasized Costco’s ability to pivot suppliers, the uncertainty of such strategies has created volatility. Tariff-related disruptions could amplify inflationary pressures, indirectly affecting consumer demand and corporate spending patterns.

A controversial decision to discontinue the sale of the abortion pill mifepristone in August has drawn criticism, sparking fears of reputational damage and customer alienation. The move, aligned with conservative sentiments, risks alienating pro-choice advocates, potentially impacting membership renewals and foot traffic—key drivers of the company’s revenue model.

Analysts have flagged stretched valuations as a risk, with a Seeking Alpha downgrade citing unsustainable price-to-earnings ratios if earnings growth slows. While Costco’s membership-driven model remains robust, concerns about peak margins and interest-rate environments have tempered investor enthusiasm. The stock’s mixed reception in late August and early September underscores the tension between long-term fundamentals and short-term execution risks.

Operational challenges persist, with September same-store sales falling short of expectations. Extended shopping hours and Instacart partnerships have yet to fully offset broader economic headwinds like inflation. The company’s cautious approach to inventory management, including symbolic product choices like Kirkland-brand mayonnaise, highlights strategic priorities but offers limited near-term earnings impact.

Leadership transitions, including the retirement of U.S./Mexico Operating Chief Miller, have introduced uncertainty. Succession planning could influence Costco’s cost-cutting and e-commerce strategies, critical for maintaining its low-cost model. Meanwhile, forays into niche product lines, such as limited-edition collaborations, remain unproven in driving scalable revenue.

Macroeconomic trends and competitive dynamics further complicate the outlook. Inflationary pressures and evolving retail trends challenge Costco’s defensive positioning, while its focus on membership growth limits price-competitive gains. The company’s reliance on high-margin Kirkland Signature products exposes it to supply chain vulnerabilities, amplifying risks in a volatile market.

The stock’s near-term volatility reflects a complex interplay of internal and external factors. Balancing innovation with operational discipline will be crucial for Costco to sustain investor confidence and navigate an uncertain economic landscape.