Costco Stock Thrives When Other Stocks Are Down. Is Now the Time to Buy?

Core Viewpoint - Costco Wholesale is experiencing strong stock performance, particularly in times of economic volatility, making it an attractive investment opportunity [1] Group 1: Business Model and Performance - Costco operates a unique business model that combines annual membership fees with low prices, attracting affluent customers and fostering loyalty [2] - The company tends to perform exceptionally well during economic downturns as consumers seek to save money by shopping at Costco instead of more expensive retailers [3] - In the fiscal second quarter of 2025, Costco reported a 9.1% year-over-year increase in sales and an 8.3% rise in comparable sales, with earnings per share growing from $3.92 to$4.02 [4] Group 2: E-commerce and Membership Metrics - E-commerce sales surged by 20.9% in the first quarter, becoming a significant growth driver as Costco enhances its digital capabilities [6] - Membership renewal rates in the U.S. and Canada reached 93%, with a global renewal rate of 90.5%, and paid household members increased by 6.8% year-over-year [7] Group 3: Market Position and Stock Performance - Despite market downturns, Costco's stock has risen by 11% this year, contrasting with a 4% decline in the S&P 500, indicating its status as a safe investment [9] - The company recently raised its quarterly dividend by 12% to $1.30, appealing to passive income investors, despite a relatively low yield of 0.47% [10] Group 4: Valuation and Investment Outlook - Costco's stock is considered expensive, with a valuation near 60 times trailing-12-month sales, yet the market continues to support this premium valuation due to its established, low-risk profile [11] - For long-term investors, Costco stock presents a viable opportunity, especially as it maintains low prices in a challenging tariff environment, benefiting from its recurring revenue from memberships [12]