MarketMoodz
JPMorgan Sees Tax Cuts Boosting Retail; Costco Poised to Lead
JPMorgan analysts forecast a more-than-1% lift to core U.S. retail sales in 2026, with Costco set to outperform peers. The note ties a tax-refund windfall to stronger consumer spending and COST’s mix and footprint give it a clear edge.
Key Takeaways
- JPMorgan expects a >1% rise in core U.S. retail sales in 2026, strongest during tax-refund season
- Costco is positioned to outperform retailers due to its mid- to high-end member base and broad geographic footprint
- Numerator data suggest BJ’s Wholesale and Walmart’s Sam’s Club have more low-end exposure; COST benefits from spring tax stimulus
- Costco shares up ~15% in 2026 year-to-date; 2025 down ~6% after a rally in 2023–24
People Involved
- Christopher HorversJPMorgan Analyst
Entities Involved
- Costco Wholesale Corp. (COST)Major wholesale club retailer
- BJ's Wholesale Club, Inc. (BJ)Wholesale club retailer
- Walmart Inc. (WMT)Mass retailer with Sam's Club
- Numerator, Inc.Data analytics provider used for exposure insights
MarketMoodz Analysis
If JPMorgan’s forecast holds, COST could see a meaningful earnings lift from a tax-driven consumer windfall, supporting stronger sales and potentially wider margins as cost-to-serve dynamics normalize post-pandemic. The positioning—mid- to high-end member base and national footprint—gives Costco a leverage advantage versus BJ’s and Walmart’s Sam’s Club in spring tax-season buying, according to the note and Numerator data.
This echoes a broader 2017–2018 tax-cut cycle, when consumer spend surged on refund checks and job markets improved. The current backdrop features a similar tax-tailwind but with different inflation and rate dynamics, so the durability of any uplift will depend on how quickly refunds land and how consumers allocate windfalls between essentials and big-ticket purchases.
What to watch next: verify official IRS withholding guidance for 2025 and 2026, monitor Costco’s outbound take-rate on higher-ticket items, and track broader retail data for signs of a generalized uplift versus retailer-specific exposure. Cross-check(NUMERATOR) data against other data providers and JPMorgan’s own notes for attribution accuracy.
Source: Original Article