<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>Consumers have been careful about spending, affecting retailers' results.</li><li>Costco has bucked the trend by offering value pricing to members.</li><li>TJX thrives in challenging economic times.</li><li>10 stocks we like better than Costco Wholesale ›</li></ul>Many retailers have had a tough time over the last couple of years. High prices are weighing on consumers, and tariffs and high gas prices have only made things more challenging.But not all retailer stocks have done poorly. Costco Wholesale (NASDAQ: COST) and TJX Companies (NYSE: TJX) have posted impressive results and rewarded shareholders.Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »Nonetheless, there's plenty of upside for long-term investors who purchase their shares this year. Here's why these two companies remain top-of-the-class retailers.<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2Njk3Mi9nZXR0eWltYWdlcy00NzAyODYyNTAtMTIwMXg4MDEtZDIxYjQ1ZC5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="467" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2Njk3Mi9nZXR0eWltYWdlcy00NzAyODYyNTAtMTIwMXg4MDEtZDIxYjQ1ZC5qcGcmdz03MDA"/>Image source: Getty Images. <h2>1. Costco</h2>When you ask people to pay a fee to shop at your warehouses, you need to make members happy. Costco has excelled at doing so for decades by offering a wide range of high-quality goods and services at attractive unit prices.Management has even shown a willingness to forgo short-term profitability in an effort to service customers and engender their loyalty. For instance, it held off on raising its annual fee, increasing it effective Sept. 1, 2024, after a longer-than-usual seven years.And it's done a fine job of retaining members over the years. Its global renewal rate typically hovers around 90%, including 89.7% in the fiscal third quarter, which ended on May 10. Costco also consistently grows same-store sales (comps). That's particularly impressive during recent times when many retailers have struggled to increase comps in the face of broad-based inflationary pressures. In the most recent three-month period, comps increased 6.6%, after removing foreign-currency translations and the impact of gasoline price changes, driven by increased spending and traffic to its stores.The company is not merely growing sales at the expense of profitability, either. Third-quarter operating income increased 11.3% year over year.Costco has a simple business plan that management executes very well. It continues to open new warehouses, and fortunately, it has room for more expansion. It started the year with 914 warehouses and opened 14 during the first nine months. Management anticipates adding another 12 this quarter. Most of the new warehouses are located in the U.S. and Canada, but it will also open a couple internationally.Consistently strong results and expansion opportunities are a powerful combination.<h2>2. TJX Companies</h2>TJX Companies attracts customers by offering apparel and home goods merchandise at a 20% to 60% discount. Its popular retail banners include TJ Maxx, Marshalls, and HomeGoods. How can the company offer goods at such deep discounts? It buys excess inventory from manufacturers. Better still, the more challenging the economic times, the better the opportunity for TJX to buy goods at attractive prices.It does well during normal times, but it has more high-quality, low-priced inventory amid challenging conditions. That's perfect, since that's when consumers, who always look for bargains, become particularly price-sensitive.These may be stressful times for consumers, but they've clamored for TJX's merchandise across all of its retail chains. Its fiscal first-quarter comps increased 8% on a constant-currency basis. That's for the period that ended on May 2. Management expects a strong 3% to 4% comps growth for the year.TJX has 6% more inventory than a year ago, but unlike some retailers, that's not a negative right now. It has found an abundance of attractive buying opportunities, allowing the company to provide more offerings to customers. After all, the retailer didn't have to discount goods to clear shelves, as seen by its 31.3% gross margin, a 1.8-percentage-point expansion from last year.It's also highly profitable. TJX's first-quarter diluted earnings per share grew 29.3% year over year to $1.19. Management also sees a growth opportunity, adding 48 locations during the first quarter. It finished the period with 5,262 stores.With its sales growth, there's clearly room for more locations.<h2>Should you buy stock in Costco Wholesale right now?</h2> Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $449,393!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,366,006!* Now, it’s worth noting Stock Advisor’s total average return is 983% — a market-crushing outperformance compared to 212% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of June 4, 2026. Lawrence Rothman, CFA has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale and TJX Companies. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

COST

Amid consumer spending caution, Costco and TJX Companies stand out as top retail stocks. Costco excels through value pricing, high member retention (~90%), and consistent same-store sales growth (6.6% recently). TJX thrives by offering deep discounts on excess inventory, benefiting from price-sensitive consumers; its fiscal Q1 comps rose 8%, with strong profitability and expansion plans. Both companies demonstrate resilience and growth potential despite broader retail challenges.

2 of the Best Retail Stocks to Buy in 2026