Core Insights - The leading retailers for the holiday shopping season are Walmart, Costco, TJX, and Amazon, which have consistently gained market share over the years [2][4][11] - Specialty brands like GAP, Urban Outfitters, and Abercrombie can experience significant stock price increases when they perform well, but their market presence remains small compared to the giants [3][4] - The promotional environment has shifted, with consumers now more aware of value, leading to changes in shopping behavior and expectations [5][6] Retail Dynamics - Consumers perceive value differently, with Walmart focusing on everyday low prices and fewer promotions, while others adopt a high-low pricing strategy [5][6] - Black Friday remains a significant shopping day, although the urgency to shop in-store has diminished due to online availability [7][8] - Younger generations, particularly Gen Z and millennials, are driving foot traffic during Black Friday, indicating a shift towards experiential shopping [9] Market Trends - Emerging brands are gaining traction and may disrupt established players like Lululemon, but identifying sustainable long-term winners remains challenging [10][11] - The preference for established retailers like Walmart, TJX, Amazon, and Costco continues to grow, as evidenced by consumer behavior and shopping patterns [11][12]

Market Share & Key Players - Walmart, Costco, TJX, and Amazon are consistently gaining market share at the expense of other retailers [2] - These four retailers have been dominating for years, and this trend is expected to continue [1][2] - While some specialty players like GAP, Urban Outfitters, and Abercrombie can experience a "bounce" with good performance, their overall impact is small compared to the dominant retailers [3] - The mentioned retailers are the largest in terms of both market capitalization and market share [4] Consumer Behavior & Value - Consumers understand true value and respond accordingly, regardless of retailers' promotional tactics [5][6] - Black Friday sales have been extended across multiple days, but the day remains a significant shopping day, especially when combining in-store and online sales [7] - Younger generations (Gen Z and millennials) are driving foot traffic, suggesting an experiential aspect to in-store shopping [9] Emerging Brands & Sustainability - New brands are emerging and taking market share, particularly in specialty apparel [10] - Identifying brands with a sustainable formula is challenging, as many are "one-hit wonders" [11]

All right, now it's time to go inside out on retail and specifically Costco. Joining us now is senior markets correspondent here on the network, George Tillis. George, we're talking Costco and this stock, I mean, uh, you know, it's been in a downtrend for several months now.And, you know, this is always at the top of everybody's list when they talk retail. What's going on here with Costco, George. Why are we seeing a pullback.This is this is one of my favorite places to go. >> Yeah. So, it's kind of an inte ...

Group 1 - Retail stocks are showing modest gains in a holiday-shortened trading session, with the SPDR S&P Retail ETF (XRT) up 0.2% and the S&P 500 gaining 0.3% [1] - Big-box retailers are leading the market, with Walmart up 0.8%, Costco Wholesale gaining 0.5%, and Target rising 1.5%, while specialty retailers have mixed performance, exemplified by Best Buy's decline of 1.6% [2]

Consumer Behavior - The consumer is characterized as stable but choiceful, being careful with spending while still participating in key shopping events [2][4] - Retailers expect strong sales during the Turkey 5 holiday weekend, but a deeper drop-off in sales post-holiday is anticipated [3] Retail Environment - Retailers like Dick's Sporting Goods and Best Buy expect more promotional and deeper discounts this year due to consumer sensitivity to pricing [4] - Retailers are raising prices to create a cushion for deeper discounts during key events, reflecting the pressure on consumers [5] Technological Impact - The upcoming holiday season is expected to be the last before widespread adoption of artificial intelligence in shopping, which will change the competitive landscape [6][7] - Retailers will need to adjust quickly to a more commoditized pricing environment driven by technology [7] Profitability Strategies - Retail media and advertising sales are becoming increasingly important for retailer profitability as pricing becomes more ubiquitous [9] - Large, well-positioned retailers like Walmart, Home Depot, and Costco are expected to benefit from their technological advancements [10] Stock Performance - Target is actively working to improve its performance, and there is a belief that the stock's potential for successful improvement is greater than currently priced in [10]

Choosing between the two retailers may come down to valuation.Economic indicators point to uncertainty, but you would not know that from the financial results of Walmart (WMT +1.96%) and Costco (COST +1.56%). Despite being mature companies, these enterprises continue to post rising sales and improving profits.Such results may indicate that both stocks are buys. However, given the state of both Walmart and Costco, one likely stands out over the other. The stock to chooseUnder current circumstances, investors ...

Core Insights - A record number of shoppers, approximately 186.9 million, are expected to shop from Thanksgiving Day through Cyber Monday, marking an increase of about 3 million from last year [4] - Black Friday remains the largest shopping day, with around 130.4 million shoppers planning to participate, followed by Cyber Monday at 40% and Small Business Saturday at 36% [5] Retail Performance - Costco and Walmart are identified as key winners in the holiday shopping season due to their strong brand presence and ability to offer low prices [6] - Costco's stock is down 2.5% year-to-date with a HOLD rating, while Walmart is up nearly 18% year-to-date, also holding a HOLD rating [7] Consumer Behavior - Direct-to-consumer brands face challenges as consumers increasingly price-check items on platforms like Amazon, leading to heightened price sensitivity [8][9] - Luxury brands like Louis Vuitton are performing well, as the top 10% of earners contribute significantly to consumption despite broader consumer pullbacks [10] Economic Context - The National Retail Federation forecasts total holiday spending to exceed $1 trillion for the first time, with sales growth projected between 3.7% and 4.2% for 2024 [13] - Retail stocks have struggled overall this year, with both consumer discretionary and staples sectors lagging behind the broader market due to economic pressures [14] Notable Retailers - Discount chains such as Dollar General and Dollar Tree have seen stock increases of over 30% this year, while brands like Coca-Cola have gained around 16% [15]

Core Viewpoint - The article highlights eight dividend stocks that cater to various investment styles, emphasizing the importance of balancing current income with long-term growth in a diversified dividend strategy [1][2]. Group 1: Stock Summaries - **American Express (AXP)**: Operates a closed-loop payments network with a yield of 0.87% and a payout ratio of 16%, indicating significant potential for dividend growth due to its affluent customer base and strong pricing power [3][4]. - **JPMorgan Chase (JPM)**: The largest U.S. bank by assets, offering a 2% yield and a 28% payout ratio, making it a solid choice for investors seeking both income and capital appreciation [5]. - **Costco (COST)**: Generates profit primarily from membership fees, with a low yield of 0.5% but a 27% payout ratio and a history of substantial special dividends, showcasing its commitment to shareholder returns [6][7]. - **S&P Global (SPGI)**: Provides essential financial market services with a yield of 0.8% and a 28% payout ratio, boasting a 52-year history of dividend increases, reflecting its strong market position [9]. - **AbbVie (ABBV)**: A biopharmaceutical company with a 3% yield and a remarkable 53 consecutive years of dividend increases, supported by a robust pipeline and strategic acquisitions [10]. - **Pfizer (PFE)**: A major pharmaceutical company with a high yield of 6.7% but a payout ratio near 98%, appealing to income-focused investors despite earnings volatility risks [11]. - **Philip Morris International (PM)**: Offers a 3.8% yield with a payout ratio of nearly 78%, focusing on smoke-free products to differentiate itself and provide growth opportunities [12][13]. - **Nvidia (NVDA)**: A technology company with a minimal yield of 0.02% but a low payout ratio of 1%, indicating strong potential for future dividend growth driven by substantial free cash flow [15].

Core Insights - Costco has quietly become a global apparel giant with sales reaching $9.7 billion in fiscal year 2025, surpassing major brands like Prada and Coach [3][4] - The company's apparel sales have grown by 40% from 2019 to 2024, with a compound annual growth rate (CAGR) of nearly 7%, while the overall clothing market in China and the U.S. has slowed down [3][4] - Costco's unique selling proposition lies in its ability to offer both affordable basics and luxury brands, appealing to a younger demographic that is increasingly skeptical of traditional luxury pricing [7][9] Apparel Strategy - Costco's clothing strategy focuses on selling basic items with a limited selection, maintaining only 4000 SKUs in total, which is significantly lower than traditional supermarkets [12] - The company employs a bundling sales approach to increase turnover and reduce costs, allowing for lower prices while still maintaining profitability [12][13] - Despite a lower gross margin of 14-15% in its apparel segment, Costco's massive sales volume allows it to outperform many fashion brands [13][14] Membership Model - Membership fees are the primary profit driver for Costco, contributing $5.32 billion in fiscal year 2025, which accounts for 65.7% of net profit [17][18] - The company has a high membership renewal rate of nearly 90%, indicating strong customer loyalty and satisfaction [20] - Costco's strategy of placing luxury items prominently and offering exclusive member benefits is designed to enhance customer retention and encourage repeat visits [18][22] Market Position - Costco's overall revenue for fiscal year 2025 reached $275.24 billion, positioning it among the top five global retailers [16] - The company's apparel business, while significant, is still considered a secondary operation compared to its core fast-moving consumer goods (FMCG) offerings [16][21] - The success of Costco's apparel segment in markets like China demonstrates the effectiveness of its business model in diverse regions [21][22]

Core Viewpoint - Costco is emerging as a significant player in the global apparel market, with its clothing sales reaching $9.7 billion (approximately 69.1 billion RMB) in the fiscal year 2025, surpassing major luxury brands and traditional retailers [6][36]. Group 1: Sales Performance and Growth - Costco's apparel sales have seen a cumulative growth of 40% from 2019 to 2024, with a compound annual growth rate (CAGR) of nearly 7%, while the overall clothing market in China and the U.S. has been growing at only 4.64% and 3% respectively [7][36]. - The company's clothing business is not only large but also maintains a high growth rate, distinguishing itself from competitors like Sam's Club, which only saw a 21% increase in the same period [7][36]. Group 2: Consumer Behavior and Market Positioning - Two main types of consumers shop for clothing at Costco: those seeking luxury items at discounted prices and those looking for basic, no-frills apparel from Costco's private label, Kirkland Signature [11][21]. - The appeal of Costco lies in its ability to offer luxury brands alongside affordable basics, resonating with younger consumers who are increasingly skeptical of traditional luxury pricing and branding [15][16]. Group 3: Business Model and Strategy - Costco operates on a simplified SKU model, offering only 4,000 total SKUs compared to traditional supermarkets' 20,000, which allows for lower costs and higher turnover rates [29][30]. - The company employs a bundling sales strategy to increase sales volume and reduce inventory turnover time, which further enhances its purchasing power [30][31]. - Costco's marketing expenses are minimal, with only 9% of its revenue allocated to market, sales, and management, allowing it to maintain low prices while still achieving significant sales [32]. Group 4: Membership and Profitability - Membership fees are the primary profit driver for Costco, accounting for 65.7% of its net profit in fiscal year 2025, highlighting the company's focus on member services rather than traditional retail profit margins [39][40]. - The company has achieved a global membership renewal rate of nearly 90%, indicating strong customer loyalty and satisfaction [40]. Group 5: Market Expansion and Future Outlook - Costco's expansion in China has been met with enthusiasm, with record-breaking membership sign-ups and sales growth in new stores, suggesting that its business model is adaptable and appealing in diverse markets [41][42].