Costco Wholesale Corporation

Costco Wholesale Corporation is an American membership-warehouse retailer that sells a deliberately narrow assortment of food, general merchandise and fuel at prices it aims to keep lower than anyone else's, and funds the whole thing with annual membership fees rather than merchandise markups. The company began operations in Seattle in 1983 and now runs 939 warehouses worldwide, carrying fewer than 4,000 active items per club against the tens of thousands a typical supermarket stocks. In fiscal 2025 it generated $275.2 billion of total revenue, $269.9 billion of net sales and $8.10 billion of net income, on 341,000 employees.

This is not a turnaround or a reinvention story. Costco is the rare retailer whose business model has been essentially unchanged for four decades and whose results keep compounding regardless of the macro backdrop: net sales grew 8% in fiscal 2025 and were up another 10% through the first nine months of fiscal 2026, with comparable sales running in the mid-to-high single digits almost without interruption. The file therefore turns on a single question — not whether Costco is a great business, which nobody seriously disputes, but what a buyer is paying for that greatness. At roughly 46 times trailing net income and 29 times trailing EBITDA, the shares embed a durable, high-quality compounder. The interesting debates are all about the durability, not the quality.

The bear case is not that the model breaks; it is that the price already assumes it never bends. Membership growth has decelerated for eight consecutive quarters, the U.S. and Canada fee increase that flattered fiscal 2025 results has now fully lapped, and the company is deliberately choosing to absorb tariff and commodity costs to protect its pricing authority — a choice that shows up as flat-to-lower core merchandise margins. The bull case is that those are the right sacrifices, that renewal rates and Executive-member penetration are at records, and that a business which grows members, spend per member and warehouses simultaneously will look cheap in hindsight. Everything in between is arithmetic.