Core Viewpoint - Costco's recent stock performance has lagged behind the broader market, but a deeper analysis reveals that it has outperformed over the long term [1]. Short-Term Performance - An investment of $10,000 in Costco stock six months ago would have decreased to $8,769, reflecting a total return of negative-12.3% and an annualized return of negative-22.8% [2]. - In contrast, a similar investment in the S&P 500 index would have grown to $11,480, while the Nasdaq-100 index would have reached $11,820 [3]. Long-Term Performance - Over a three-year period, Costco investors have outperformed the S&P 500, although keeping pace with the Nasdaq-100 during the AI boom has been more challenging [5]. - If the investment in Costco stock was held for five years, it would have outperformed both the S&P 500 and the Nasdaq-100 [8]. Valuation and Economic Environment - Costco's stock was trading at a high valuation of 95 times free cash flow (FCF) in spring 2025, but has since decreased to a multiple of 50, which is still considered high for value investors [10]. - The company faces challenges from increasing operating costs due to tariffs and inflation, impacting its low-margin warehouse retail model [11]. Financial Performance and Investor Sentiment - Despite the stock's price dip, Costco's financial results are strong, with trailing-12-month sales up 19% compared to three years ago and FCF nearly tripling [13]. - Supporters of Costco view the current price dip as a buying opportunity, emphasizing the company's resilience in various economic conditions [14].

Core Insights - Costco's $1.50 hot dog combo is not a loss leader but a symbol of its business model, indicating the company's ability to maintain low prices while managing costs effectively [2][8] Cost Management - Costco operates two meat-processing plants to produce its own hot dogs, which helps keep costs low, allowing the company to break even on hot dog sales [4][5] - The average cost for a vendor to prepare a hot dog with bun and condiments ranges from $0.45 to $0.80, while a cup of Coca-Cola costs between $0.10 and $0.20, leaving Costco with approximately $0.50 to cover other expenses [4] Private Label Strategy - The launch of Kirkland Signature in 1995 aimed to consolidate over 30 privately owned products under one brand, enhancing cost control and product differentiation [7] - As of 2025, Kirkland Signature products account for 12.5% of Costco's assortment but contribute significantly to revenue, making up 23% of total revenue in 2024, with margins up to 15% [9] Membership Revenue - Recurring membership fees serve as a primary profit engine for Costco, supporting its low-price strategy and overall business model [8]

Core Argument - Costco has filed a lawsuit against the Trump administration, claiming that the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful and seeking a full refund of all levies paid under these tariffs [2][3]. Group 1: Legal Basis of the Lawsuit - The lawsuit argues that the IEEPA does not clearly authorize the President to set tariffs, thus rendering the challenged tariff orders invalid [2]. - Costco is requesting the Court of International Trade to consider all tariffs collected under IEEPA as illegal [2]. Group 2: Implications for Costco - The company claims it is facing "imminent and irreparable harm" due to anticipated liquidation of entries for which it paid IEEPA duties as early as December 15 [3]. - Costco emphasizes the necessity of the lawsuit, stating that without judicial relief, it is "not guaranteed a refund for those unlawfully collected tariffs" [6]. Group 3: Context of the Lawsuit - Costco joins other companies, including Revlon, Kawasaki, and Bumble Bee Foods, in legal action against the White House regarding tariffs [3]. - The lawsuit coincides with the U.S. Supreme Court's consideration of the legality of these tariffs, following challenges from multiple states and businesses [3][4].

Core Viewpoint - Costco Wholesale is seeking a refund for tariffs paid under the Trump administration, arguing that these tariffs are unconstitutional and should be invalidated [1][2][8]. Group 1: Legal Action - The company has filed a lawsuit against U.S. Customs and Border Protection and the Trump administration in the Court of International Trade, requesting a refund of tariffs paid on imports in recent months [2][3]. - Costco's complaint includes a request for the court to prevent further tariff collections and to guarantee a refund for both past and future tariffs until the case is resolved [3]. Group 2: Financial Implications - Although Costco did not disclose the exact amount paid in tariffs, executives have indicated efforts to minimize the impact on pricing by collaborating with suppliers [3]. - The company aims to maintain low prices by adjusting sourcing strategies and product selections to protect its margins [4]. Group 3: Supreme Court Considerations - The Supreme Court has heard arguments regarding the legality of Trump's tariffs, with lower courts previously ruling them unconstitutional; justices have expressed skepticism about the administration's authority to impose such tariffs [5]. - There is no set timeline for the Supreme Court's decision, but it may occur before the end of the year, leaving uncertainty about potential refunds for companies like Costco if the tariffs are struck down [5]. Group 4: Market Reaction - Costco's stock has remained relatively stable, showing little change in early trading and remaining flat since the beginning of the year [6].

Core Insights - Costco Wholesale Corporation and BJ's Wholesale Club operate in the warehouse retail space, with Costco having a market capitalization of approximately $396.6 billion and BJ's at roughly $11.8 billion [1][2] - Both companies are navigating a challenging consumer environment characterized by tighter budgets, with Costco leveraging its global scale and BJ's focusing on operational efficiency and market-specific execution [3] Costco's Strengths - Costco's membership-based business model provides a steady revenue stream, with membership renewal rates of 92.3% in the U.S. and Canada and 89.8% worldwide in Q4 of fiscal 2025 [3][4] - The company reported a 14% increase in membership fee income to $1,724 million in the quarter [3] - Costco's net sales for October increased by 8.6% year-over-year to $21.75 billion, demonstrating its ability to adapt to changing consumer preferences [5] - Digitally-enabled comparable sales surged by 16.6% in October, reflecting the effectiveness of Costco's digital initiatives [6] BJ's Wholesale Strengths - BJ's Wholesale has a membership-driven model with a tenured renewal rate of 90% and a higher-tier penetration level of 41%, ending Q3 of fiscal 2025 with 8 million members [7] - The company reported a 30% increase in digitally enabled comparable sales, driven by its focus on convenience and digital engagement [9] - BJ's continues to invest in curated assortments and fresh offerings, enhancing its competitive position against national brands [10] Sales and Earnings Estimates - The Zacks Consensus Estimate for Costco's current fiscal-year sales and EPS indicates year-over-year growth of 7.7% and 11%, respectively [13] - For BJ's Wholesale, the current financial-year sales and EPS estimates imply year-over-year growth of 4.5% and 7.4%, respectively [15] Stock Performance and Valuation - Costco shares have decreased by 12.2% over the past six months, while BJ's Wholesale has seen a steeper decline of 22.3% [18] - Costco's forward P/E ratio is 43.85, below its one-year median of 50.09, while BJ's stands at 19.37, below its median of 23.60 [19] Investment Outlook - Both companies carry a Zacks Rank 3 (Hold), but Costco is viewed as the stronger investment option due to its broader scale, strong member loyalty, and consistent execution in challenging consumer conditions [21]

Core Insights - Costco continues to experience sales growth, indicating strong consumer demand and effective business strategies [1] Sales Performance - The warehouse retailer reported another month of sales gains, reflecting a positive trend in its revenue generation [1]

Core Insights - Two leading U.S.-based retailers have experienced significant increases in their Growth metrics, indicating a potential turnaround in performance [1][3] Group 1: Costco Wholesale Corp. - Costco Wholesale Corp. saw its Growth score rise from 57.41 to 90.06 within a week, attributed to strong fourth-quarter performance that exceeded analyst expectations [4] - The company is expanding its warehouse footprint with over 30 new openings planned, which is expected to enhance its revenue base [4] - Despite high scores in Growth and Quality, Costco performs poorly in Momentum and Value, with unfavorable price trends across all time frames [5] Group 2: Village Super Market Inc. - Village Super Market Inc.'s Growth score increased from 58.47 to 90.1 in just one week, driven by strong earnings growth and improved net profit margins despite external economic challenges [6] - The modest top-line growth has been offset by margin expansion, contributing to a better Growth ranking [6] - The stock scores high in Growth and Value but struggles in Momentum and Quality, also showing unfavorable price trends over short, medium, and long terms [7]

Core Insights - Costco's stock experienced a 3% increase, closing at nearly $943, despite a general decline in U.S. indexes, driven by strong September sales figures [1][2]. Sales Performance - September retail sales for Costco rose 5% year-over-year, reaching approximately $26.6 billion, indicating a positive start to the holiday season [2]. - The company's September sales growth of 9% in 2024 was viewed positively by investors, despite being lower than the previous year's figures, which were influenced by external factors such as Hurricane Helene and port strikes [4][7]. Investor Sentiment - Investors anticipated a potential slowdown in sales growth but reacted favorably to the results, considering the context of last year's unusually high demand [3][7]. - Analysts from UBS noted that the results reflect a strong performance, with a mean price target for Costco shares set at $1,065, suggesting a potential upside of about 13% from the recent close [5][6]. Additional Metrics - Global same-store sales for Costco increased by 5.7%, and the newly introduced metric for "digitally-enabled comparable sales" surged over 26%, highlighting the growing importance of digital sales channels [5].

Core Insights - Costco's stock experienced a 3% increase to nearly $943 following the release of its September sales data, which showed a year-over-year sales rise of 5% to approximately $26.6 billion, indicating positive investor sentiment ahead of the holiday season [2][3]. Sales Performance - September sales for Costco rose 9% in 2024, but this was perceived positively by investors despite a slowdown compared to the previous year, attributed to unique circumstances such as Hurricane Helene and port strikes that inflated last year's figures [5][7]. - Global same-store sales increased by 5.7%, and a new metric for "digitally-enabled" comparable sales showed a significant rise of over 26% [6]. Market Reaction - The stock's rise occurred on a day when U.S. indexes were down, suggesting that investors viewed Costco's sales performance as a strong indicator of resilience [2][4]. - Analysts remain optimistic about Costco's stock, with a mean price target of $1,065, representing a potential upside of about 13% from the recent closing price [6].

Costco Wholesale Corporation - Costco reported net sales of $26.58 billion for September 2025, representing an 8.0% increase year-over-year [2][8] - Comparable sales increased by 5.7% overall, with U.S. sales rising 5.1%, Canadian sales up 6.3%, and international markets growing by 8.5% [3][8] - Digitally-enabled sales surged by 26.1%, reflecting the company's adaptation to changing shopping habits [3][8] Amazon - Amazon is launching electronic pharmacy kiosks at One Medical locations starting December 2025, aimed at simplifying the prescription process [4][5][8] - The kiosks will allow patients to pick up medications shortly after their doctor's appointments, enhancing medication adherence [5][8] - This initiative integrates Amazon's healthcare acquisitions into a seamless patient experience, potentially disrupting traditional pharmacy models [5][8]