For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Costco (COST) ten years ago? It may not have been easy to hold on to COST for all that time, but if you did, how much would your investment be worth today?

Costco's Business In-Depth

With that in mind, let's take a look at Costco's main business drivers.

Based in Issaquah, Washington, Costco Wholesale Corporation sells high volumes of foods and general merchandise (including household products and appliances) at discounted prices through membership warehouses. It is one of the largest warehouse club operators in the United States. The company also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.

The company’s warehouses offer an array of low-priced nationally branded and select private labeled products in a wide range of merchandise categories. Costco offers three types of memberships to its customers: Business, Gold Star (individual), and Executive.

As of Dec. 12, 2024, Costco operates 897 warehouses, including 617 in the United States and Puerto Rico, 109 in Canada, 41 in Mexico, 36 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden.

Costco generates revenue from two sources: 1) Store sales (Net sales; 98% of fiscal 2022 total revenue) and 2) Membership fees (MFI; 2% of fiscal 2022 total revenue).

Costco offers a myriad of food products as well as a vast range of household and lifestyle products, stationeries and appliances. The company also sells gasoline to customers at cheap prices. It offers merchandise in the following categories:

Food and Sundries (including dry foods, packaged foods, groceries, snack foods, candy, alcoholic and nonalcoholic beverages, and
cleaning supplies)

Hardlines (including major appliances, electronics, health and beauty aids, hardware, and garden and patio)

Fresh Foods (including meat, produce, deli, and bakery)

Softlines (including apparel and small appliances)

Ancillary (including gasoline and pharmacy businesses).

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Costco ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in March 2015 would be worth $7,135.34, or a gain of 613.53%, as of March 3, 2025, and this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 182.94% and the price of gold went up 127.58% over the same time frame.

Analysts are anticipating more upside for COST.

Being a consumer defensive stock, Costco has been surviving the market turmoil pretty well. The discount retailer’s key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth. These factors have been helping it register decent sales and earnings numbers. We expect Costco to register an 11.5% adjusted earnings per share improvement in fiscal 2025 on 6.6% revenue growth. This outlook reflects Costco’s ability to navigate the challenging operating environment, generate solid sales, and register high membership renewal rates. A favorable product mix, steady store traffic, pricing power, and strong liquidity position should help Costco keep outperforming. While trading at a premium to its peers, its long-term growth prospects should help the stock see a solid upside.

Over the past four weeks, shares have rallied 7.01%, and there have been 4 higher earnings estimate revisions in the past two months for fiscal 2025 compared to none lower. The consensus estimate has moved up as well.

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Costco Wholesale Corporation (COST) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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