Latest news with #CostcoWholesaleCorporation
Yahoo
10 hours ago
- Business
- Yahoo
Costco Wholesale Corporation (COST): A Bull Case Theory
We came across a bullish thesis on Costco Wholesale Corporation (COST) on Sanjiv's Substack. In this article, we will summarize the bulls' thesis on COST. Costco Wholesale Corporation (COST)'s share was trading at $1,051.69 as of 4th June. COST's trailing and forward P/E were 59.65 and 51.81 respectively according to Yahoo Finance. A grocery store employee stocking shelves with fresh fruits and vegetables. Costco's Q3 FY2025 results reaffirm its status as a uniquely disciplined and predictable retail compounder. With a decade-long revenue CAGR of 9%, decomposed into 2.64% store growth and 6.13% comparable sales growth, the company continues to execute on its '12/9/3' margin model—anchored in capped gross margins and low opex to deliver relentless value to members. In Q3, sales rose 8% y/y to $63.2bn, with net income up 13.2% to $1.90bn. Membership income—65% of net profits—remains central to Costco's strategy, with renewal rates staying above 90% despite recent dilution from promotional cohorts. Even amid broad inflationary and tariff headwinds, Costco's low-SKU model and agile sourcing—including pulling forward seasonal imports and shifting production geographically—allow it to avoid widespread price hikes, unlike peers such as Walmart or Target. E-commerce (+14.8%) and Kirkland Signature (+50 bps sales mix gain) reinforce Costco's brand value and adaptability. Capex remains disciplined (~$5bn expected for FY25), aligned with its historic 7.8% CAGR, keeping capital intensity in check. The high-traffic store challenge is being addressed through new openings, tech-enabled checkout, and expanded gas station hours. Yet, despite its operational excellence and 17.5% CAGR shareholder return over 23 years, the stock trades at a two-year forward P/E of 52.8x and FCF yield of just 1.9%—too rich for the implied 4–6% long-term return. 'While we continue to respect the business and hold a 1% legacy position, we believe the current valuation offers little margin of safety, and do not plan to add to the position at these levels.' - Sanjiv. Previously we have covered a bullish thesis on Costco Wholesale Corporation (COST) by FluentInQuality on Substack in March 2025, which aligns with Sanjiv's June 2025 analysis highlighting Costco's consistent execution, member-first model, and strategic discipline. Since March, the stock has appreciated by 0.4%. Both investors admire Costco as a high-quality compounder, though Sanjiv expresses caution on valuation, unlike FluentInQuality, who emphasizes Costco's long-term compounding potential despite its premium multiple. Costco Wholesale Corporation (COST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 93 hedge fund portfolios held COST at the end of the first quarter which was 96 in the previous quarter. While we acknowledge the risk and potential of COST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
10 hours ago
- Business
- Yahoo
Costco Wholesale Corporation (COST): A Bull Case Theory
We came across a bullish thesis on Costco Wholesale Corporation (COST) on Sanjiv's Substack. In this article, we will summarize the bulls' thesis on COST. Costco Wholesale Corporation (COST)'s share was trading at $1,051.69 as of 4th June. COST's trailing and forward P/E were 59.65 and 51.81 respectively according to Yahoo Finance. A grocery store employee stocking shelves with fresh fruits and vegetables. Costco's Q3 FY2025 results reaffirm its status as a uniquely disciplined and predictable retail compounder. With a decade-long revenue CAGR of 9%, decomposed into 2.64% store growth and 6.13% comparable sales growth, the company continues to execute on its '12/9/3' margin model—anchored in capped gross margins and low opex to deliver relentless value to members. In Q3, sales rose 8% y/y to $63.2bn, with net income up 13.2% to $1.90bn. Membership income—65% of net profits—remains central to Costco's strategy, with renewal rates staying above 90% despite recent dilution from promotional cohorts. Even amid broad inflationary and tariff headwinds, Costco's low-SKU model and agile sourcing—including pulling forward seasonal imports and shifting production geographically—allow it to avoid widespread price hikes, unlike peers such as Walmart or Target. E-commerce (+14.8%) and Kirkland Signature (+50 bps sales mix gain) reinforce Costco's brand value and adaptability. Capex remains disciplined (~$5bn expected for FY25), aligned with its historic 7.8% CAGR, keeping capital intensity in check. The high-traffic store challenge is being addressed through new openings, tech-enabled checkout, and expanded gas station hours. Yet, despite its operational excellence and 17.5% CAGR shareholder return over 23 years, the stock trades at a two-year forward P/E of 52.8x and FCF yield of just 1.9%—too rich for the implied 4–6% long-term return. 'While we continue to respect the business and hold a 1% legacy position, we believe the current valuation offers little margin of safety, and do not plan to add to the position at these levels.' - Sanjiv. Previously we have covered a bullish thesis on Costco Wholesale Corporation (COST) by FluentInQuality on Substack in March 2025, which aligns with Sanjiv's June 2025 analysis highlighting Costco's consistent execution, member-first model, and strategic discipline. Since March, the stock has appreciated by 0.4%. Both investors admire Costco as a high-quality compounder, though Sanjiv expresses caution on valuation, unlike FluentInQuality, who emphasizes Costco's long-term compounding potential despite its premium multiple. Costco Wholesale Corporation (COST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 93 hedge fund portfolios held COST at the end of the first quarter which was 96 in the previous quarter. While we acknowledge the risk and potential of COST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Costco's Core Comparable Sales Grew 6.0% in May, Showing a Slight Slowdown
Costco Wholesale Corporation (NASDAQ:COST) reported a 4.3% rise in comparable sales for May, with US sales up 4.1%, Canadian sales rising 3.3%, and international sales increasing 6.3%. Online sales jumped 11.6% for the month. Sales of food and sundries rose by mid-to-high single digits, while fresh food saw high single-digit growth. However, ancillary sales declined. Excluding the effects of fuel and currency fluctuations, comparable sales rose 6.0% in May, including a 5.5% gain in the US, both slightly below April's growth rate. Overall sales for the month totaled $20.97 billion, up 6.8% year over year. Analysts at JPMorgan believe Costco Wholesale Corporation (NASDAQ:COST)'s comparable sales growth may face some pressure in the coming months, as the company moves past the strong demand it saw from its popular gold bars, which often sold out quickly. Although Costco slightly exceeded expectations in its fiscal third-quarter results, other analysts noted that the retailer remains well-positioned to handle challenges related to tariffs. COST has surged by over 11% since the start of 2025. While we acknowledge the potential of COST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: and Disclosure. None. Sign in to access your portfolio
Yahoo
02-06-2025
- Business
- Yahoo
Company News for Jun 2, 2025
Shares of Costco Wholesale Corporation (COST) gained 3.1% after the company reported third-quarter fiscal 2025 earnings of $4.28 per share, beating the Zacks Consensus Estimate of $4.25 per share. Ulta Beauty, Inc.'s (ULTA) shares soared 11.8% after the company reported first-quarter fiscal 2025 earnings of $6.70, surpassing the Zacks Consensus Estimate of $5.77. per share. Shares of Dell Technologies Inc. (DELL) declined 2.1% after the company reported first-quarter 2025 earnings of $1.55 per share, missing the Zacks Consensus Estimate of $1.72 per share. American Eagle Outfitters, Inc.'s (AEO) shares fell 2% after the company reported first-quarter fiscal 2025 loss of $0.29 per share, wider than the Zacks Consensus Estimate of a loss of $0.25 per share. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Costco Wholesale Corporation (COST) : Free Stock Analysis Report Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
28-05-2025
- Business
- Yahoo
Costco Wholesale Corporation (COST)'s Business Model Is Volume, Says Jim Cramer
We recently published a list of . In this article, we are going to take a look at where Costco Wholesale Corporation (NASDAQ:COST) stands against other stocks that Jim Cramer discusses. Costco Wholesale Corporation (NASDAQ:COST) is one of Cramer's top retail stock picks. The CNBC TV host is enamored with the stock primarily due to the firm's scale and its ability to lower prices. Cramer believes that Costco Wholesale Corporation (NASDAQ:COST)'s scale will enable it to dominate the retail market along with Walmart in case President Trump's tariffs end up causing inflation. He believes that the firm also uses its scale to leverage lower consumer prices. Cramer's previous remarks about Costco Wholesale Corporation (NASDAQ:COST) asserted that apart from the company, no other retailer could match or compete with Walmart on a price basis. Here are his latest thoughts: 'Costco's very, I am friendly with Richard Galanti, the former CFO. And one of the things that Costco did was say, I don't know do we really have to do this [get into eCommerce]? And, then they realized they had to do it. And once they went in, I mean they come out guns blazing. I mean they're a little like Apple in that sense. Like we don't necessarily have to be first but we're gonna be the best. And Costco's model is so perfect for this, they are gonna have, I think they're gonna pass on what they can. But remember, their model is volume.' A customer in a warehouse aisles, browsing the wide range of branded and private-label products. In a recent Mad Money episode, Cramer commented: 'Next, on Thursday, after the close, we hear from the company that I think has the most consistent earnings and also the most persistent sell-off after we see the earnings, even when they're good, and I'm talking about Costco. It's unnerving to watch a fantastic quarter and still see a stock go down. And that's just how it's done with this one, even as we have a fairly good idea how the company's doing, because you know what? Overall, COST ranks 9th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of COST, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than COST and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
