Costco's Global Engine: How International Markets and E-commerce Propel Growth Amid Stagnation

The global economy is teetering on the edge of a slowdown, with inflation, trade tensions, and geopolitical risks casting shadows over consumer spending. Yet Costco Wholesale (NASDAQ: COST) has emerged as a rare bright spot, defying stagnation in mature markets through relentless international expansion and e-commerce dominance. With total sales growing 8% year-over-year and 10.9% growth in international comparable sales—alongside 15.3% e-commerce growth—Costco is proving that its membership-driven model is uniquely equipped to navigate macroeconomic headwinds.

International Markets: The New Growth Frontier

Costco's $62.53 billion in Q2 net sales were bolstered by robust performance in regions beyond its U.S. stronghold. Other International markets, including Mexico, Taiwan, and South Korea, delivered 10.3% sales growth (adjusted for currency fluctuations), with local currency performance far outpacing reported figures muddied by foreign exchange headwinds. The company's aggressive 28 new warehouse openings in 2025—half of which are outside the U.S.—signal a long-term bet on markets like Asia and Latin America, where rising middle classes and brand loyalty to the “Costco value” are fueling demand.

While peers struggle with declining foot traffic and margin pressures, Costco's shares have outperformed the retail sector by a wide margin, reflecting investor confidence in its global playbook.

E-commerce: The Digital Flywheel

Costco's online sales have become a critical growth lever, with e-commerce comparable sales surging 15.3% year-to-date (and 20.9% unadjusted for currency effects). The company's focus on “big and bulky” items—home furnishings, small appliances, and bullion—has turned its logistics arm, Costco Logistics, into a competitive advantage. Meanwhile, the Costco Next marketplace and off-site retail media partnerships are unlocking new revenue streams, while the app's warehouse inventory tool has driven 43 million Q2 visits**, solidifying its role as a hub for member engagement.

Strategic Resilience Against the Odds

Despite headwinds like tariffs on Chinese imports and inflation in fresh food categories, Costco's global sourcing network and supplier relationships have kept margins intact. The company's decision to lower prices on key items—including diapers and olive oil—has reinforced its value proposition, while wage increases for U.S. workers have not derailed efficiency gains. CFO Gary Millerchip noted that SG&A expenses improved by 8 basis points, a testament to operational discipline.

Analyst Sentiment: A Buy Case for the Long Run

Wall Street analysts have consistently rated Costco a buy, citing its moat-like membership model and disciplined capital allocation. The company's 91% membership renewal rate and plans to open warehouses in underserved markets like Vietnam and Poland suggest further upside. As CEO Ron Vachris emphasized, “Costco's agility in managing tariffs and inflation is unmatched,” with its private-label strategy and bulk purchasing power insulating it from cost pressures.

Investment Takeaway

Costco's 8% sales growth and global expansion underscore its ability to thrive where others falter. With e-commerce and international markets driving double-digit growth and a balance sheet capable of funding new warehouses and technology investments, the stock remains a top pick for investors seeking durable returns. Even as the U.S. market faces stagnation, Costco's global flywheel ensures it will continue to outpace peers—a compelling case for a buy rating.

In a world of uncertainty, Costco's formula is clear: expand where growth is, digitize what can't be touched, and never lose sight of the member. The results speak for themselves.