Core Insights - Costco's unique business model continues to demonstrate strong marketability, indicating that the company meets the value expectations of its members [1] - The retail sector is generally slow-growing, but Costco has consistently outperformed its competitors [2] - Costco's growth is supported by evolving consumer preferences that favor subscription-based models and value-oriented shopping [3] Group 1: Business Model and Performance - Costco's membership-based model restricts shopping to paying members, with annual fees starting at $60, which can increase with additional perks [2] - Membership has surged from less than 40 million to over 74 million in the past decade, while store count has grown from 655 to over 870 [2] - Annual revenue has increased from $110 billion in fiscal 2014 to an estimated $259 billion for the fiscal year ending in August [2] - Costco's stock price has risen 634% over the past ten years, turning a $5,000 investment into approximately $36,700 [2] Group 2: Future Growth Potential - Despite a crowded retail market, Costco's growth trajectory remains promising due to changing consumer shopping preferences [3] - Consumers are increasingly willing to pay subscription fees for access to goods and services, aligning with Costco's business model [3] - The expansion of Costco enhances its value proposition, creating a cycle of membership growth that drives same-store sales [3]

Costco runs an incredible business, but its valuation has become expensive.Costco Wholesale (COST 0.35%) has been a reliable market-beating stock for ages. The company operates under a warehouse model that breeds loyalty and sales growth, and it also pays a dividend. There's nothing not to like about Costco stock -- except for its valuation.Is Costco's premium valuation a setup for a fall?Why Costco stock keeps climbingCostco has 879 warehouse stores globally, 606 of them in the U.S. It stands out from othe ...

Costco shares' sizable gains since this time last year are justified, and there's reason to expect more of the same.Trading at record highs thanks to its 60% rally over the course of the past 12 months, Costco Wholesale (COST 0.35%) stock could be a bit intimidating. It feels like a pullback could be in the offing. And, maybe that's exactly what's in the cards.Perhaps the bigger risk here, however, is at the other end of the continuum. That is, waiting any longer to buy into this red-hot name could prove co ...

The valuation can normalize by the stock price going down or by profits going up. Which will it be?Warehouse-style retail chain Costco Wholesale (COST 0.35%) is a stock that investors are willing to pay up for right now. Any stock's valuation -- how expensive or cheap it is -- can be measured relative to the size of its business. And Costco's is objectively high.One way to value a stock is by the profits from the business. This is called the price-to-earnings (P/E) ratio. Among the hundreds of companies in ...

Costco Wholesale Corporation (COST) continues to excel due to its strategic growth initiatives, effective pricing strategies and steady membership trends. These factors have propelled the company's performance, leading to impressive sales figures. Let's delve into the details of Costco's performance and understand why this retail giant remains a dominant force in the market.Sales Performance OverviewIn May, Costco reported an impressive increase in comparable sales, achieving 6.4% growth during the four-wee ...

In this articleGMCOSTCustomers exit a Costco store in Teterboro, New Jersey, June 28, 2023.Kena Betancur | Corbis News | Getty ImagesDETROIT — General Motors has a not-so-secret weapon when it comes to getting U.S. consumers into its new all-electric vehicles: Costco Wholesale.The Detroit automaker said it's increasingly using the retail giant's Costco Auto Program for EVs as it expands its portfolio from niche vehicles to mass-market segments with vehicles such as the Chevrolet Equinox and Chevrolet Blazer ...

Costco plans to stop selling books regularly at its wholesale clubs from January through August starting next year, the New York Times reported Thursday. Publishing executives told the outlet the retailer came to the decision, at least in part, because of the added cost for workers to stock the books, which are placed on tables for display, unlike other items that can simply be rolled out on pallets for customers to grab from. According to the outlet, the sources said Costco might still sell books on occasi ...

The dominant retailer reported another quarter of solid financial results.Once again, Costco (COST 0.83%) gave its shareholders reason to be optimistic. The massive warehouse store operator just reported revenue of $58.5 billion (up 9% year over year) and diluted earnings per share of $3.78 (up 29%) that easily beat Wall Street consensus analyst estimates. The business continue to hum along.But even though this is a top retail stock that has crushed it for investors historically, I think it's best to keep i ...

Will more membership-fee revenue be a catalyst for the stock?Costco (COST 0.83%) recently reported strong fiscal third-quarter results and talked about a potential membership-fee increase down the road. The stock has been a strong performer, up over 60% in the past year.Let's take a closer look at the retailer's most recent earnings, the potential impact of a membership-fee increase, and whether now is a good time to buy the stock.Rising sales and potential membership-fee increasesCostco's stellar fiscal Q3 ...

Financial Performance - Net sales increased by 9% to $57,392 million in the third quarter of 2024, driven by comparable sales growth and sales from 24 new warehouses opened since the end of the third quarter of 2023[94] - Net income for the third quarter was $1,681 million, or $3.78 per diluted share, compared to $1,302 million, or $2.93 per diluted share in 2023[94] - Comparable sales increased by 7% in the third quarter of 2024, positively impacted by increased shopping frequency and a slightly higher average ticket[99] - Sales in core merchandise categories increased by $3,892 million or 9% during the third quarter of 2024, with growth across all categories[97] - The e-commerce business experienced a 21% increase in comparable sales, despite a 10% decline in the previous year[96] Membership and Revenue - Membership fee revenue rose by 8% to $1,123 million, attributed to new member sign-ups and upgrades to Executive Membership[94] - Membership fee revenue increased by 8% in both the third quarter and the first thirty-six weeks of 2024, driven by new member sign-ups and upgrades to Executive Membership[100] - Total paid members reached 74,500, up from 69,100 in the previous year, while total cardholders increased to 133,900 from 124,700[100] Cost and Margin - Gross margin percentage increased by 52 basis points, primarily due to the absence of a $298 million charge recorded in the third quarter of 2023 related to the discontinuation of charter shipping activities[94] - Gross margin percentage for the third quarter was 10.84%, an increase of 52 basis points compared to the previous year, with a core merchandise gross margin percentage increase of 10 basis points[102][103] - SG&A expenses as a percentage of net sales decreased by 15 basis points, largely due to improved productivity in warehouse operations[94] - SG&A expenses as a percentage of net sales decreased to 8.96% in the third quarter, down 15 basis points from the previous year[108][109] Cash Flow and Capital Expenditures - Net cash provided by operating activities totaled $8,381 for the first thirty-six weeks of 2024, compared to $7,343 in the same period of 2023[115][117] - Capital expenditures for the first thirty-six weeks of 2024 amounted to $3,133, with plans to spend approximately $4,300 to $4,500 during fiscal 2024[119] Dividends and Share Repurchase - A quarterly cash dividend of $1.16 per share was declared on April 10, 2024, and a special dividend of $15.00 per share was paid on May 10, 2024, totaling approximately $6,655[122] - The Board of Directors authorized a share repurchase program of $4,000, expiring in January 2027, with $3,079 remaining available for purchase as of the end of Q3 2024[123] - In the first thirty-six weeks of 2024, the company repurchased 749,000 shares at an average price of $646.07, totaling approximately $484 million, compared to 908,000 shares at an average price of $492.30, totaling approximately $447 million in the same period of 2023[123] Warehouse Expansion - The company opened 24 new warehouses since the end of the third quarter of 2023, contributing to net sales growth[97] - The company opened 16 new warehouses in the first thirty-six weeks of 2024 and plans to open an additional 14 warehouses in the remainder of the fiscal year[119] Financial Position and Risks - The company maintains bank credit facilities with a borrowing capacity of $1,145 million, of which $656 million is for international operations[124] - Outstanding commitments under letter of credit facilities totaled $187 million at the end of Q3 2024, primarily consisting of standby letters of credit[125] - There have been no material changes to critical accounting estimates as disclosed in the Annual Report for the fiscal year ended September 3, 2023[126] - The company has not experienced any material changes in market risks related to foreign-currency exchange rates and interest rates since the last annual report[127] Internal Controls and Procedures - Disclosure controls and procedures were reviewed and deemed effective as of May 12, 2024, by the CEO and CFO[129] - No changes in internal control over financial reporting occurred during Q3 2024 that materially affected the company's internal controls[130]