Costco Wholesale Corp. (COST) presents a strong long-term value proposition, supported by consistent revenue growth, disciplined capital allocation, and a resilient membership model. Analysts highlight its pricing power and operational efficiency as key drivers of sustained profitability in a challenging retail environment.
- Fiscal 2025 revenue: $256.7 billion, +7.3% YoY
- Same-store sales growth: 6.8%
- Membership revenue: $3.8 billion, +5.1% YoY
- Operating margin: 3.8%
- Return on equity: 21.4%
- Free cash flow: $7.9 billion (12-month trailing)
- Global warehouse count: 868 (589 in U.S.)
- Member retention rate: 95%
- Institutional ownership: 74.3% (Q3 2025)
- Forward P/E: 29.1
Costco's stock has emerged as a focal point for long-term investors, with its share price reflecting underlying strength in core business metrics. The company reported fiscal 2025 revenue of $256.7 billion, representing a 7.3% year-over-year increase, driven by a 6.8% growth in same-store sales and continued expansion of its global warehouse footprint. Membership revenue, a critical component of its business model, reached $3.8 billion in the latest fiscal year, up 5.1% and demonstrating enduring customer loyalty. The company's operating margin of 3.8% in fiscal 2025 underscores its disciplined cost management, even amid inflationary pressures on supply chains. Costco’s operating leverage is further supported by a 21.4% return on equity, well above the consumer staples sector average of 14.2%, indicating efficient use of shareholder capital. Its cash flow generation remains robust, with $7.9 billion in free cash flow over the past 12 months, enabling continued share buybacks and strategic store openings. Market analysts note that Costco’s pricing strategy—offering lower prices than competitors while maintaining healthy margins—positions it favorably in an era of consumer cost-consciousness. The company operates 868 warehouses globally, including 589 in the U.S., with plans to open 15–20 new locations annually through 2027. This expansion, coupled with a 95% member retention rate, suggests durable growth potential beyond short-term macroeconomic fluctuations. Investor sentiment has strengthened in recent quarters, with institutional ownership rising to 74.3% as of Q3 2025. The stock trades at a forward P/E of 29.1, slightly above the sector average, but justified by its consistent earnings growth and defensiveness during economic downturns. Analysts tracking COST maintain a 'Buy' rating across multiple platforms, citing its unique ecosystem of membership, bulk pricing, and disciplined execution.