Costco didn't have a headline-grabbing year in 2025, and that's precisely what the company intended.Costco Wholesale (COST 0.65%) ended 2025 in a familiar position: operationally strong, strategically disciplined, and still trading at a premium that divides investors. While the stock didn't outperform the broader market this year, the underlying business continued to execute in ways that reinforce why Costco remains one of the most closely watched names in retail.As investors look ahead, three themes from 2 ...

Yesterday's Barchart article on Costco Wholesale Corp. (COST) showed that COST stock is cheap. Today's article illustrates an interesting strategy: short one-month out-of-the-money (OTM) COST puts and calls to pay for longer-dated in-the-money (ITM) COST calls. COST is at $870.32 in morning trading on Dec. 29. I described in the Dec. 28 Barchart article that COST could be worth over 18% more at $1,031 per share ("Costco Has Tumbled Despite Higher FCF and FCF Margins - Time to Buy COST Stock?). More News ...

It has been three years or so since artificial intelligence (or AI) leapt into the zeitgeist with the public introduction of DALL-E2 and ChatGPT. As AI technology develops, I have been tracking how companies are thinking about and using it. The latest earnings season for the US stock market – for the third quarter of 2025 – recently ended and there were a number of companies that I follow or have a vested interest in, where the management teams discussed the topic of AI and how the technology could impact t ...

Group 1 - The company, owned by Walmart, operates approximately 60 stores in China and is expanding its presence [1] - The e-commerce business of the company is experiencing rapid growth [1]

Group 1 - Costco Wholesale Corporation operates membership warehouses providing a variety of products including groceries, fresh food, household goods, electronics, and services through pharmacies, gas stations, optical centers, and e-commerce options [2] - Jim Cramer expressed concerns about Costco's stock performance, noting that the stock price may have risen too high at 41 times earnings, and mentioned selling half of the position for the Charitable Trust [1] - Cramer highlighted that Costco is involved in a lawsuit against the Trump administration for a refund related to tariffs, suggesting that a victory could positively impact the company's stock performance [2] Group 2 - Despite acknowledging Costco's potential as an investment, there is a belief that certain AI stocks may offer greater upside potential and carry less downside risk [2]

Core Viewpoint - Costco Wholesale Corp. reported strong free cash flow and margins, yet its stock has declined, making it attractive for value investors [1][4]. Financial Performance - Fiscal Q1 revenue ending Nov. 23, 2025, rose by 8.28%, with a 6.4% increase on a comparable basis [4]. - Free cash flow surged by 58.4% year-over-year to $3.162 billion, compared to $1.996 billion in the previous year's Q1 [4]. - Over the last year, free cash flow increased by over 79% to just over $9 billion from just over $5 billion [4]. Free Cash Flow Margins - Q1 2026 free cash flow margin was 4.70%, a 46% improvement from 3.21% a year ago [5]. - Trailing 12 months free cash flow margin was 3.21% of sales, up from 2.85% in FY 2025, indicating a 12.6% improvement [5]. Sales Forecast - Analysts project sales for the fiscal year ending Aug. 31, 2026, to be $297.14 billion, an 8% increase from $275.2 billion for the year ending Aug. 31, 2025 [7]. - For the year ending Aug. 31, 2027, projected sales are $318.18 billion [7]. - For the next 12 months, projected sales are $302.65 billion, representing a 10% increase over FY 2025 [7].

Core Insights - Costco Wholesale Corporation (NASDAQ:COST) has been upgraded to Buy from Neutral by Northcoast, with a price target set at $1,100, highlighting its strong competitive position in the US and potential for international expansion [2] - The company has demonstrated consistent success in international markets, with significant growth opportunities in developed economies where consumers prioritize savings and discretionary spending [2] - Costco's financial health is underscored by its substantial cash reserves, which may allow for a special dividend of up to $20 per share [2] Sales and Membership Trends - Despite a more than 4% decline in stock price since the start of 2025, management addressed concerns regarding slowed membership sign-ups, attributing it to changing behaviors among younger customers who prefer online sign-ups and renewals [3] - Costco reported record Black Friday non-food orders exceeding $250 million, with digital sales increasing by 20.5% for the quarter, website traffic rising by 24%, and mobile app traffic surging by 48% [4]

Core Insights - Costco has demonstrated significant growth since its IPO in 1985, with current net sales reaching $65.98 billion, an increase of 8.2% year over year [2] - The company has expanded its global presence to 921 warehouses and plans to open 28 new stores in fiscal year 2026, with new locations generating an average of $192 million in sales [2] - Costco's membership base has grown to 81.4 million, with a renewal rate of 92.2% in the U.S. and Canada, reflecting strong customer loyalty [3] Financial Performance - Costco's market capitalization stands at $388 billion, with a current share price of $873.35 and a gross margin of 12.88% [3] - The company has increased its dividend by 85% since Berkshire Hathaway sold its shares in 2020, marking 21 consecutive years of annual dividend hikes [7][11] - Share buybacks have been a key strategy, with $2.18 billion repurchased in the 2025 fiscal year, enhancing shareholder value [8][9] Historical Context - An investment of $100 at Costco's IPO would now be worth approximately $86,058, reflecting a 50,858% increase when adjusted for stock splits [10] - Initial dividends paid in 2004 were $0.10 per share, and current annual dividends for early investors amount to $1,329 [11][12] Competitive Position - Despite challenges faced by brick-and-mortar retailers, Costco has successfully raised prices and maintained growth, contrasting with competitors like Kohl's and Macy's [3][4] - The company's commitment to low prices and customer satisfaction has garnered admiration from notable investors, including the late Charlie Munger of Berkshire Hathaway [6]

Core Viewpoint - A significant theft of a $400,000 shipment of lobster intended for Costco has raised concerns about the increasing trend of freight thefts involving impersonation of legitimate carriers [1][2]. Group 1: Incident Details - The stolen shipment of lobsters was valued at $400,000 (£295,000) and was being transported by Rexing Companies to Costco stores in Illinois and Minnesota [1]. - The lobsters were picked up in Taunton, Massachusetts, but never reached their destination [1]. Group 2: Company Impact - The president of Rexing Companies, Dylan Rexing, stated that the theft was not random and is part of a growing pattern where criminals impersonate legitimate carriers [2]. - The loss from this theft is described as "significant" for Rexing Companies, which is based in Indiana [2]. Group 3: Industry Implications - The theft is expected to drive up costs across the supply chain, which will ultimately affect consumers [3]. - The FBI is currently investigating the incident, highlighting the seriousness of the issue [3]. - Rexing emphasized the need for federal agencies to have modern enforcement tools to combat organized criminal networks effectively [3][4]. - Without improved enforcement, such thefts are likely to continue disrupting businesses and impacting everyday prices [4].

Core Insights - The article compares two ETFs targeting the U.S. consumer staples sector: Fidelity MSCI Consumer Staples Index ETF (FSTA) and State Street Consumer Staples Select Sector SPDR ETF (XLP), highlighting their differences in portfolio structure, yield, and liquidity [4][5][10]. Group 1: Portfolio Structure - FSTA holds 104 stocks with a sector tilt of 98% towards consumer defensive, providing broader diversification compared to XLP, which has only 36 holdings [1][8]. - XLP's top holdings include Walmart, Costco Wholesale, and The Procter & Gamble Co., which constitute a significant portion of its assets, indicating a concentrated investment approach [2][5]. - FSTA's top five holdings represent a larger percentage of its total portfolio compared to XLP, making it somewhat top-heavy [9]. Group 2: Yield and Expense Ratio - Both ETFs charge a low expense ratio of 0.08%, but XLP offers a higher yield of 2.7% compared to FSTA's 2.3%, appealing to income-focused investors [3][5]. Group 3: Liquidity and Size - XLP has $14.9 billion in assets under management (AUM), making it larger and more liquid than FSTA, which may benefit investors looking for ease in executing large trades [2][8]. - The greater liquidity of XLP is a significant advantage over FSTA, despite both ETFs covering the same defensive sector [5][10].