12:17 PM EDT, 08/07/2025 (MT Newswires) -- Costco Wholesale's ( COST ) July performance surprised to the upside with core comparable sales increasing year-over-year and an improvement in traffic despite concerns that the growth was slowing, UBS Securities said.

The company's flexible merchandising continues to drive excitement and sales while new drivers like cellphone, Uber ( UBER ) , and DoorDash ( DASH ) gift cards and jewelry helped lift non-food categories, according to the Wednesday note.

The firm expects consumer spending to tighten as inflation outpaces wage growth, a dynamic that should favor value-oriented retailers like Costco, which may benefit from big-ticket categories due to competitive pricing and growing digital payment options.

UBS said that Costco's digital sales remained strong, driven by stock-keeping unit expansion, logistics upgrades, mobile app personalization, and faster delivery.

The firm has a buy rating on Costco's stock with a $1,205 price target.

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