Worried About Costco's Business Over the Long Term? You'll Want to See This Stat.

Core Viewpoint - Costco Wholesale is positioned for long-term success, with a growing and younger customer base, strong membership renewal rates, and significant revenue growth over the past decade [2][4]. Group 1: Business Performance - Over the last 10 years, Costco has more than doubled its revenue, attributed to new locations and an increase in membership [2]. - The company has nearly 900 locations globally and approximately 137 million members [3]. - Costco added about 9 million new cardholders in fiscal 2024, with roughly half of these members being under 40 years old [3][4]. Group 2: Membership Dynamics - The average age of Costco's members has been steadily decreasing since the COVID-19 pandemic, indicating a shift towards a younger demographic [4]. - Costco's membership renewal rate exceeds 90%, suggesting that many younger members are likely to remain loyal for years [4][6]. Group 3: Investment Considerations - Costco's stock trades at over 50 times its earnings, which is considered high for a low-growth business, indicating potential overvaluation [5]. - Despite the high valuation, the long-term resilience of Costco's business model and customer base may provide comfort to investors concerned about its future [6].