Core Viewpoint - Costco Wholesale Corp has demonstrated strong performance for both consumers and investors, with a stock price increase of approximately 180% over the past five years, driven by its low-cost offerings and effective business model [1]. Group 1: Business Performance - Costco operates over 900 warehouses globally, with around 600 located in the U.S., and has a significant e-commerce presence [5]. - The company generated more than $200 billion in revenue last year, primarily from sales of food, essentials, and general merchandise, with a strategy focused on bulk purchasing to maintain low prices [6]. - Membership fees are a crucial revenue source, with $1.2 billion generated in the recent quarter, contributing to a net income of $1.9 billion [7]. Group 2: Membership and Customer Loyalty - Costco offers two membership tiers, with executive members accounting for nearly half of all memberships and over 70% of global sales, highlighting their importance to growth [8]. - The company maintains a membership renewal rate exceeding 90%, providing visibility on future revenue [8]. Group 3: Tariff Impact and Strategy - The company has faced challenges due to tariffs on imports, but has implemented strategies to mitigate these effects, such as sourcing more products locally and redirecting foreign goods to non-U.S. stores [2][9]. - Approximately one-third of U.S. sales are imports, with imports from China making up about 8% of U.S. sales, indicating a manageable reliance on foreign products [9]. Group 4: Future Outlook - Costco has a history of positive earnings surprises and consistent revenue and earnings growth, suggesting optimism about its ability to navigate the current tariff environment [9][11]. - The upcoming earnings report on September 25 could be pivotal for investor sentiment, with potential for stock price appreciation if positive indicators are presented [3][11]. Group 5: Investment Considerations - Currently trading at 48 times forward earnings estimates, Costco's stock is considered relatively expensive compared to other retailers, but its unique membership model and customer loyalty justify the premium [12]. - Long-term investors are encouraged to consider buying Costco stock regardless of short-term market timing, as the company's fundamentals are likely to support sustained growth [13].