Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures
Costco Wholesale (COST): Membership Expansion Fuels Resilient Growth – Can Digital and Executive Tiers Unlock the Next Leg of Value?
Costco delivered robust Q1 FY25 results, with net income rising 13.2% YoY to $1.798 billion ($4.04 per share), supported by 7.5% revenue growth to $62.15 billion, driven by strength across geographies, categories, and e-commerce (+13.2% adjusted growth). Comparable sales grew 5.2% globally (7.1% ex-gas and FX), with U.S. sales rising 7.2%, underscoring membership loyalty. Membership fee income increased 7.8% to $1.166 billion, bolstered by Executive Memberships (+9.2% YoY) and high renewal rates (92.8%). Costco’s traffic growth (5.1%) and gross margin expansion (+24 bps) reflect its value-driven model, operational efficiencies, and digital success, including Costco Logistics' efficiency gains. Strategic investments in warehouse expansion, digital engagement, and pricing flexibility signal Costco’s focus on growth amid easing inflation. Despite outperforming peers like Walmart and Target, Costco’s premium valuation (51.82x NTM P/E) raises questions about near-term upside. Key risks include FX volatility, labor negotiations, and warehouse cannibalization, though Costco’s scale-driven cost advantage and affluent member base mitigate these challenges. As holiday sales and international expansion unfold, can Costco’s digital roadmap and growing Executive Membership tier sustain its outperformance and unlock incremental value for shareholders?
