Costco Tops Quality Rankings Amid Q1 Beat And Bold Legal Stance Against Trump's Tariffs

Costco Wholesale Corp. (NASDAQ:COST) surged into the elite tier of Benzinga Edge's Stock Rankings this week, with its quality score jumping from 86.58 to 94.90 week-over-week.

Check out COST’s stock price here.

Earnings Beat Fuels Quality Score

This move places the retailer in the top 10th percentile of stocks for fundamental strength, following a fiscal first-quarter report where it beat both earnings and revenue estimates.

The sharp rise in Costco’s quality ranking—which evaluates a company’s “operational efficiency and financial health” based on historical profitability —directly reflects its first quarter performance.

The retailer reported revenue of $67.31 billion, topping analyst estimates of $67.14 billion. Adjusted earnings per share reached $4.50, beating the projected $4.27.

Fundamental strength was further evidenced by an 8.2% year-over-year increase in net sales and a 6.4% rise in total comparable sales. Costco exited the quarter with approximately $16.22 billion in cash, validating the high operational efficiency score.

It maintains a weaker price trend over the short, medium, and long terms, with a moderate value ranking. Additional information is available here.

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Navigating Legal And Trade Pressures

While its financial metrics drove the rankings boost, Costco is taking a bold stance to protect those margins. The company recently filed a lawsuit against the Donald Trump administration, challenging tariffs imposed under the International Emergency Economic Powers Act (IEEPA) as unlawful and seeking a full refund.

To mitigate the impact of these levies, Costco is increasing production of its Kirkland Signature brand. Despite the uncertain trade environment, the retailer's ability to deliver a “beat-and-raise” quarter has solidified its reputation for operational excellence.

Costco Shares Underperform In 2025

Shares of COST fell by 6.05% year-to-date, whereas the Nasdaq Composite Index rose 22.20% in the same period.

The stock was further down by 14.68% over the last six months and 3.54% over the last month. It ended 0.56% higher at $854.79 apiece on Tuesday, and it was down 0.05% in premarket on Wednesday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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