Costco Finds Its Magic Again

The company is getting bigger and better, ready to deliver superior returns to long-term investors

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Panos Mourdoukoutas
Apr 12, 2021
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Costco Wholesale Corp. (

COST, Financial) found its magic again on Wall Street last week after reporting net March sales of $18.21 billion, an increase of 17.6% from $15.49 billion last year, beating expectations.

The warehouse club retailer had lost its appeal on Wall Street in early March when it reported financial results that missed bullish analyst expectations.

March sales were strong in all geographical regions, especially overseas, where the company has plenty of room to grow. Online sales jumped 57.7%.

For the 31 weeks ended April 4, Costco reported net sales of $111.37 billion, increasing 15.7% from $96.25 billion during a similar period last year.

Costco currently operates 807 warehouses, including 559 in the United States and Puerto Rico, 104 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 14 in Taiwan, 12 in Australia, three in Spain and one each in Iceland, France and China. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

New store openings slowed down in 2019 after a big jump in 2018, when the company added 25 stores, but have regained momentum in 2020.

Meanwhile, sales per store have been edging higher, from $50 million in 2016 to $55 million in 2020, meaning that overall sales growth could accelerate as the company opens new stores.

Over the last three years, Costco's sales and Ebitda rose 8.7%, beating Walmart Inc.'s (

WMT, Financial) numbers but lagging behind Inc. (AMZN, Financial).




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Meanwhile, Costco is getting better at managing capital and raising "moats" to protect its competitive advantage, as evidenced by a steady rise in its economic profit, from around 0% in 2009 to 9% in 2019.


In short, Costco is getting bigger and better, ready to deliver superior returns to long-term investors.

Disclosure: I own shares of Costco.

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I’m a Professor of Economics at LIU Post in New York. I also teach at Columbia University. I’ve published several articles in professional journals and magazines, including Forbes, Barron’s, The New York Times, Japan Times, Newsday, Plain Dealer, Edge Singapore, European Management Review, Management International Review, and Journal of Risk and Insurance.