Costco beat earnings expectations but needs further data to justify its current valuation relative to the market.

Let's delve into some of these moves in the reactions we're seeing toward Costco shares, with Mel Casey, portfolio manager at FBB Capital Partners, and Sharon Mathis, director of consumer research at LSCEG, joining us today.

The company exceeded expectations in both revenue and profit; even excluding customs duty refunds, performance was better than anticipated. Firstly, yes, the reaction today was good, with the company outperforming the market, although it is still significantly below the overall market performance since the beginning of the year.

The profits were good, and you're right, if we exclude the one-time customs duty. The report is still good , but I think the outlook here for a stock at the current valuation is that investors probably need to see more data to catch up with the market .

Therefore, there is still good demand for renewing existing subscriptions, which enhances the ability to set prices with existing members, but the membership growth rate is important for analysts.

If we want to justify the current assessment, this is the number that should be focused on . I know, Sharon, that same-store sales were higher, up 8.8% in June, 8.9% in July, and 8.4% in August.

It was very clear from the results that the consumer is very focused on value and convenience. Digital sales grew by 20%, which is in line with what we have seen during this earnings season.

We noticed that consumers not only purchased non- food products, but also turned to digital pharmacies, indicating that they fully benefited from Costco's multi-channel shopping experience.

In addition to lower fuel prices making membership more attractive, it allows shoppers to fill up their cars, park them, and buy more than just everyday necessities. They are spending money on jewelry, home furnishings, and even electronics, items that have seen very weak demand from other retailers.

As for "Mill," the slowdown in the growth of new members was something that consistently stood out when we first noticed this decline. You say it's just a possible indicator of the shape of the K-curve economy we're seeing.

Are you concerned about this slight slowdown and slight decrease in this indicator, while we continue to see current members spending at very strong levels ?

Yes, it is important to look at the K-curve theory of economics here, because when we think about Costco, it sometimes seems more like a movement than a business, and the loyalty it enjoys is almost unique in the retail sector.

However, there is still a sensitive economic aspect to this matter. Where does this additional customer come from? And if they are having difficulty meeting expectations regarding new subscribers, it may be an indication that the economy is taking this K-curve.

And Sharon, you highlighted food, you know, everyone loves a Costco hot dog, of course, a hot dog with a soft drink. They have also reduced prices on some Kirkland products to maintain this value .

I think I mentioned earlier the importance of value, value, value, that's what matters now. We weren't talking about Costco, but how important is a value strategy in maintaining footfall and loyalty under these circumstances, with hot dogs and sodas at $1.50, and Kirkland's low-priced options?

Value has become a fundamental element. Value is no longer just a promotional tool, but has become a competitive advantage.

Costco's stock price fell at the start of the day, but is still up by about 2.5%.