why did costco stock drop today

Costco's stock dropped today primarily due to several factors following its recent quarterly earnings report and operational challenges. Despite beating sales and earnings per share estimates, Costco's stock declined about 2.9% because same-store sales growth fell short of expectations for the second consecutive quarter, signaling concerns about slowing domestic growth momentum. Additionally, uncertainties from new U.S. tariffs on imported goods have raised questions about supply chain resilience, with potential inflationary impacts potentially affecting consumer spending. Moreover, Costco's controversial exit from selling the abortion pill mifepristone has drawn criticism, raising fears of reputational damage and possible customer alienation that could negatively impact membership renewals and revenue. Analysts have also expressed concerns about Costco’s valuation, which seems stretched amid worries about earnings sustainability, especially given macroeconomic pressures and competition from rivals like Sam’s Club and BJ’s Wholesale. Despite these challenges, Costco’s membership model and strong performance in nonfood discretionary goods have been relatively solid compared to competitors. However, the combination of missed sales expectations, tariff- related supply chain issues, strategic shifts, and valuation concerns have led to downward pressure on the stock price today.