Omor Ibne Ehsan
6 min read
Quick Read
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Costco trades at 47x earnings with four straight quarters of declining comps, while Five Below grew net sales 23% and comparable sales 14%.
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Dollar General posted its fifth straight quarter of traffic growth while Dollar Tree expanded gross margin 850 basis points, each trading near 17x earnings.
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Cramer warned Costco may be losing younger shoppers as digital sign-ups renew at lower rates than warehouse members, suggesting weakening cultural grip.
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On CNBC’s opening bell on September 3, 2026, Jim Cramer laid out a split that inverts most people’s assumptions about American retail. The membership warehouse with the best reputation in the business is stumbling, and the chains people quietly hit for essentials are running away with the story.
Costco (NASDAQ:COST) trades near 47 times trailing earnings while its comparable sales have gone the wrong way for four straight reporting periods. Meanwhile, Five Below (NASDAQ:FIVE), Dollar Tree (NASDAQ:DLTR), and Dollar General (NYSE:DG) have each reported quarters that would look strong in any market.
Cramer’s read is that the trade-down is real, and it is not treating Costco the way loyal shoppers assume it should.
Trading Down That Actually Works
Jim Cramer said, “If you want to know what trading down looks like in a positive way, you just look at what Winnie Park has done at Five Below. Still one more amazing quarter.” The endorsement lines up with the numbers.
Five Below’s second quarter delivered net sales of $1.3 billion, up 23%, with comparable sales growth of 14% and adjusted diluted EPS of $1.68. Park raised full-year adjusted EPS guidance to a midpoint of $10.07.
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Trading down describes household dollars migrating toward retailers positioned where the marginal purchase now happens. Park emphasized broad-based growth across all income cohorts, geographies, and categories, which reads as trade-in behavior from higher-income shoppers rather than pure distress buying.
