Core Insights - Costco has generated a total return of 159% over the past five years, with net sales reaching $270 billion in fiscal 2025, although shares are currently 17% off their peak [1] Group 1: Membership Model - Costco's membership model is a key differentiator, requiring customers to pay an annual fee of $65 to shop at its warehouses, with 81 million membership households globally, reflecting a 6.3% year-over-year increase in Q4 2025 [3][4] - The high renewal rate of around 90% for memberships fosters customer loyalty and encourages repeat visits to warehouses [4] Group 2: Sales Performance - Same-store sales (SSS) increased by 5.9% in fiscal 2025, indicating consistent growth and strong operational stability [5][6] - The company's strategy of offering high-quality merchandise at competitive prices contributes to its ability to maintain steady demand across various economic conditions [6] Group 3: Valuation Concerns - Costco shares are considered expensive, trading at a price-to-earnings (P/E) ratio of 49.2, which raises concerns about potential returns if purchased at high valuations [8] - The elevated P/E ratio suggests that the market may consistently reward Costco with a premium valuation, but this leaves little margin for safety and could lead to future contraction as the company matures [9]