Costco Wholesale Corporation (COST) has demonstrated resilience in its financial performance, even after raising its annual membership fee from $60 to $65 on September 1, 2024. The retailer reported earnings per share of $4.04 for fiscal Q1 2025, marking a 13% year-on-year increase and surpassing analysts' expectations of $3.79. Total revenue reached $62.15 billion, reflecting an 8% increase, while same-store sales rose by 7.1%. Membership fee income also saw a boost, increasing by 7.8% to $1.17 billion, alongside a 13% growth in e-commerce sales year-on-year. Costco operates 897 warehouses globally, with 617 located in the U.S. Notably, the company's stock price has surged over 50% since the beginning of 2024, indicating strong investor confidence despite concerns about inflation and tariff policies under President Donald Trump [f812e7a2].
In recent months, Costco's stock performance has been a focal point for investors. The company has consistently outperformed its peers, with a market capitalization of $241.892 billion as of October 24, 2023. Hedge fund portfolios holding Costco increased from 63 in the previous quarter to 67 at the end of the second quarter [d6c6863b]. Analysts have noted that Costco's strong sales and traffic trends, coupled with a decline in inflation, have contributed to its robust growth. The company's ability to maintain high membership renewal rates and expand its offerings, including the sale of gold and silver, has further solidified its market position [7dd3c9a6].
While Costco has shown impressive growth, some analysts suggest that investors might consider Amazon as a contrarian stock pick for 2024 and beyond. A recent article from The Motley Fool highlights Amazon's focus on customer experience and its diverse revenue streams, including advertising and third-party merchant services. Amazon's e-commerce segment is showing signs of recovery, and analysts predict strong profit growth, making it an attractive option for investors looking for long-term potential [21b3abac].
The Motley Fool's analysis of Amazon, Costco, and Walmart indicates that while Costco is an excellent business, its stock is trading at a high forward P/E ratio, suggesting it may be worth considering selling some shares. Amazon, with a 37.6% market share in e-commerce, is viewed as having significant long-term investment potential. Walmart, as the largest retailer in America, is also expected to thrive during economic downturns [75d4acfc].
In the latest trading session, Amazon closed at $178.22, with shares gaining 10.97% over the past month, outpacing the Retail-Wholesale sector's gain of 2.63% and the S&P 500's gain of 5.2%. Analysts project earnings of $0.81 per share for Amazon, representing year-over-year growth of 161.29%, with revenue expected to reach $142.39 billion, an 11.8% increase compared to the same quarter last year [c83969a4].
In conclusion, Costco's recent financial performance and strategic decisions, such as the membership fee increase, have not hindered its growth trajectory. Investors remain optimistic about Costco's continued success, while also weighing the potential of competitors like Amazon and Walmart in the evolving retail landscape.