Total revenue in 2022 topped $226 billion, the company employs more than 304,000 individuals and it is a member of the S&P 500, the S&P 100 and the NASDAQ 100. Like most retail businesses, Costco is vulnerable to economic fluctuations. However, its history of reliability and solid revenue growth is a compelling reason to make a long-term investment in its stock.
While its growth might not be as significant as some tech industries, it’s a good sector to invest in and hold over several decades. Meanwhile, Costco’s history of reliable gains and ability to regularly outperform its competitors makes it an attractive option. Over the coming years, Costco has proven a safe bet because of its stickiness and large addressable market. Once consumers become members, they https://www.day-trading.info/ tend to stick around (management reports a global renewal rate of 90.5%). And the company’s growth strategy involves opening new locations in the United States and fast-growing international markets like China, where it plans to open its sixth location in 2024. First-quarter net income jumped 16% year over year to $1.59 billion, and Costco’s profits have been on a steady uptrend for the last 10 years.
Costco Wholesale saw a increase in short interest in February. As of February 15th, there was short interest totaling 6,320,000 shares, an increase of 10.3% from the January 31st total of 5,730,000 shares. Based on an average daily volume of 2,140,000 shares, the short-interest ratio is presently 3.0 days. Currently, 1.4% of the shares of the company are sold short.
With its shares up by a solid 48% year to date in 2023, Costco’s narrative is about more than just the special dividend. Since its founding in 1983, the company has pioneered a unique membership-based retail business model. It keeps costs low by buying items in bulk, streamlining selection, and simplifying store layouts to pass on savings to consumers, who pay an annual fee to access its stores. In the fourth quarter of Costco’s fiscal 2023, revenue rose 9.5% year over year, beating Wall Street expectations by more than $1 billion. The company’s international segment reported revenue growth of 4%, surpassing the 3% revenue growth of the U.S. The company opens an average of 25 new locations annually and will likely see its international stores eventually surpass its domestic business.
Earnings and Valuation
In terms of scale, it is the largest retailer of choice and prime beef, organic foods and rotisserie chickens. Rotisserie chickens are a long-standing tradition at Costco which pioneered their use. The chickens are sold for less than cost and used to attract business into the store. The company operates through a network of subsidiaries that own warehouses in 11 countries, including the US and Puerto Rico. The company retails branded and private-label merchandise across verticals and categories and at “discounted” or bulk-rate prices. Product categories include grocery and frozen foods, apparel, sporting goods, electronics, auto care, appliances, housewares and even furniture.
The Price family’s new business is called PriceSmart and operates a chain of membership clubs in the Caribbean and Central America. Price Club’s first store, opened in an old Howard Hughes airplane hangar, is still in operation and known as Costco #401. Additionally, in 2023 the company ventured into China for the first time and has already expanded to five stores in the country. Despite operating in 14 countries, Costco continues to have significant growth potential abroad. In six of those countries, the company has five or fewer locations, indicating almost endless expansion possibilities within those regions and new ones. The supermarket and grocery industry hit a value of $11 trillion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 3% through 2030.
- The company operates through a network of subsidiaries that own warehouses in 11 countries, including the US and Puerto Rico.
- The supermarket and grocery industry hit a value of $11 trillion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 3% through 2030.
- While its growth might not be as significant as some tech industries, it’s a good sector to invest in and hold over several decades.
- As of the year-end calendar 2022, the company operated more than 840 stores and was on track to open new stores in the coming years.
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. It owned 206 stores and was called PriceCostco for a time. The Price family eventually exit the business in favor of new operations resulting in the rebranding to Costco Wholesale Corporation.
The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. The company is scheduled to release its next quarterly earnings announcement on Thursday, March 7th 2024. Yet Costco’s first store was a massive success in the European country, with the company announcing plans to open 15 additional units in France by 2025. The company is on a path to continue seeing significant financial gains year over year as it grows its international footprint. Upgrade to MarketBeat All Access to add more stocks to your watchlist.
Costco’s focus on expanding abroad is promising for its long-term future and will likely provide consistent growth for years. With a forward price-to-earnings (P/E) ratio of 43, Costco stock is significantly more expensive than the S&P 500 average of 26. And this is a high price tag for a mature company with a slow-and-steady approach to growth.
Key Competitors
3,447 employees have rated Costco Wholesale Chief Executive Officer Craig Jelinek on Glassdoor.com. Craig Jelinek has an approval rating of 92% among the company’s employees. This puts Craig Jelinek in the top 30% of approval ratings compared to other CEOs of publicly-traded companies. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.
Nearly 70% of the stores are located in the US with another 13% in Canada and the remainder scattered around the globe. Costco Wholesale’s (COST 1.60%) business has exploded in recent years, helping it become one of the world’s most successful retailers. In the last five years alone, shares of the warehouse retailer have soared 166%.
COST Stock News Headlines
With average gains of 150% since the start of 2023, now is the time to give these stocks a look and pump up your 2024 portfolio. It was among the very first warehouse membership clubs and targeted small merchants and businesses. The Price family turned down an offer to merge with Walmart’s Sam’s Club in favor of a more suitable match-up with Costco.
On top of that, it has a whopping $17 billion in cash and equivalents on its balance sheet. With the most recent special dividend only costing $6.7 billion, Costco can easily afford it, and possibly more in the future. Costco Wholesale same-store sales rose 10% in the month of January.
Costco is trouncing the market
The company’s unique business model of offering an annual membership in exchange for access to wholesale items at industry-low prices has won over shoppers worldwide. This dividend is the fifth payout management has authorized in just over a decade, and the company has what it takes to continue returning value to its shareholders. https://www.investorynews.com/ The company operates 870 stores across 14 countries and is rapidly expanding. Its popular business model has traversed cultures and continents, with customers embracing the company far and wide. In addition to retail, the company also provides many services including pharmacy, eye care, food & beverage and auto care centers.
Costco Wholesale shares rose by 0% in the first full-day of trading following the report. Costco Wholesale announced a quarterly dividend on Thursday, January 18th. Shareholders of record on Friday, February 2nd will be given a dividend of $1.02 per share on Friday, February 16th. This represents a $4.08 annualized dividend and a dividend yield of 0.52%. The ex-dividend date of this dividend is Thursday, February 1st.
Our Services
Coincidentally, Costco founder Jim Sinegal got his start in the retail business working for Sol Price at his original membership club, FedMart. Costco Wholesale Corporation is central to the global warehouse membership club story. The company was founded in 1983 by Jim Sinegal and Jeffrey Brotman but its history dates back to 1976 because of the merger with Price https://www.forex-world.net/ Club. Costco, originally known as Costco Companies, quickly grew in its first two years and became the 1st company to go from $0 to $3 billion in revenue within the 1st 3 years. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. This website is using a security service to protect itself from online attacks.
