Costco and Chewy Defy Stock Market Slump with Loyal Customers and Growth

Two retail giants, Costco Wholesale and Chewy, have shown resilience despite recent stock market declines. Both companies continue to deliver strong financial performance through loyal customer bases and steady revenue growth. Meanwhile, broader stock market dips have left several major firms trading at lower valuations, potentially offering investment opportunities.

Costco's business model relies heavily on membership fees, which bring in high-margin revenue. Standard memberships cost $65 annually, while executive-level ones are priced at $130. These fees have helped the company maintain strong profitability, even as its stock market value fell by around 10% over the past year. The retailer now trades at 47 times forward earnings, yet its renewal rates in the U.S. and Canada remain above 90%, proving customer loyalty. Revenue has also climbed steadily for five years, regardless of stock market conditions.

Chewy, an online pet products seller, has built its success on recurring sales. Its Autoship programme, which accounts for at least 80% of total sales, ensures a predictable income stream. The company reached profitability years ago and has sustained it since. Recently, it expanded into veterinary services, launching its own clinics in 2024 to diversify revenue. Despite this growth, its shares now trade at 24 times forward earnings, down from over 36 times a year earlier.

Beyond these retailers, broader stock market declines have created potential buying opportunities. In January 2026, several DAX-listed companies saw sharp drops, including SAP (-18.14%), adidas (-11.77%), and reinsurers Hannover Rück (-10.29%) and Münchener Rück (-8.86%). Analysts suggest these dips may reflect temporary weaknesses rather than long-term risks. Similarly, NASDAQ-listed firms like AppLovin (-16.89%) and KLA-Tencor (-15.24%) have fallen, with some trading at low price-to-earnings ratios—such as Strategy (excluding MicroStrategy) at just 1.91.

Other undervalued stocks include Edenred, which dropped 36% in 2025 and now trades at a 49% discount to its estimated fair value. British American Tobacco, despite a 60% decline over several years, shows improved fundamentals. Celsius Holdings, after an 80% plunge, is experiencing accelerating growth, adding to its appeal for investors seeking recovery potential.

Costco and Chewy maintain strong operational performance despite recent stock market declines, supported by loyal customers and recurring revenue. At the same time, broader stock market pullbacks have left several established companies trading below historical valuations. These shifts may present opportunities for investors looking for undervalued assets in a positive 2026 equity outlook.