Costco Report Sends Clear Message to Walmart and Target: Get Rekt, Losers

Stop me if you’ve heard this one before: Costco Wholesale just casually strolled in, flashed everyone its fiscal first-quarter numbers, and left the competition wondering why they even bother. The warehouse club kingpin is proving once again that Americans love a good deal almost as much as they love a $1.50 hot dog combo. And if you thought their business model was just about bulk TP and oversized jars of mayonnaise, think again—Costco’s turning holiday shopping and member loyalty into an art form (all while living rent-free in Sam's Clubs head)

(Source: Giphy) 

For starters, Costco racked up $62.15 billion this quarter, cruising past Wall Street’s expectations by a hair (they were betting on $62.08 billion). That’s a 7.5% increase year-over-year, and if you think that’s impressive, let’s not forget they sold 4.2 million pies in three days before Thanksgiving. That’s nearly one pie for every friggin’ person who’s ever stood in line for their famous hot dogs LOL. 

(Source: CNBC) 

Meanwhile, their stock is up a nice 52% this year, outpacing the S&P 500’s 28% gain. And sure, its price-to-earnings ratio is a nosebleed-inducing 54 times next year’s earnings, but Wall Street could give a rats a$$ about it. Why? Because Costco’s like the Beyoncé of retail—pricey, but undeniably worth it.

In addition, with Thanksgiving and Christmas basically sharing a bunk bed this year, retailers had to start wooing shoppers early. Costco’s game plan? Pre-Black Friday sales, heavy discounts, and bulk deals so good they make you wonder if you need a second freezer. Take their LG UltraGear Gaming Monitor for $179 (down $70) or JBL headphones for $69.99 (30% off). If you walked in for milk and left with a gaming monitor, don’t worry—you’re not alone.

(Source: Giphy) 

Now with that said, it wasn’t just electronics flying off the shelves. Jewelry and luggage also saw solid growth. That’s right, jewelry. Because apparently nothing says “holiday spirit” like throwing a diamond bracelet into your cart next to a 120-pack of frozen taquitos (a.k.a. Literally me). 

But, but, but… the best part about this earnings report is if Costco had a love language, it would definitely be “recurring revenue.” Membership fees climbed 8% this quarter, hitting $1.17 billion. Meaning, Costco made over a billion dollars just for letting people shop there. And with a 90.4% renewal rate, it’s clear their customers aren’t going anywhere. Netflix might lose you after one too many price hikes, but Costco? They’ve got you for life.

(Source: Yahoo Finance) 

What’s more, is that even after hiking membership fees to $65 for Gold Star members and $130 for the Executive tier, people are happily paying up. Why? Probably because they know they’ll make it back after three trips for bulk snacks and Kirkland-brand Sauvignon Blanc.

In fact, speaking of Kirkland Signature, Costco’s private-label brand is growing faster than the rest of the business. It’s the unsung hero of the retail world, offering everything from organic peanut butter to leather couches that somehow feel luxurious and thrifty. And honestly, we all know Kirkland is the OG of bulk goods. Plus, it’s also worth mentioning that Costco isn’t just winning in-store; their online sales climbed 13% this quarter as well. They processed nearly a million deliveries, breaking records in the “big and bulky” category. Think furniture, appliances, and the occasional kayak. Yes, a kayak. If that’s not peak Costco, I don’t know what is.

(Source: New York Times) 

On the other hand though, while Costco’s living its best life, Walmart and Target are watching from the sidelines. Walmart’s still cruising with strong sales, but Target’s struggling as inflation-weary shoppers tighten their wallets. And while those two duke it out, Costco keeps coasting on its unbeatable value and eternal crowd-pleaser: cheap food. 

In the end, it’s becoming clear as day that Costco isn’t just a store—it’s a lifestyle. From pies and gaming monitors to jewelry and chicken thighs, they’re crushing it across every category. Add in rock-solid membership loyalty, Kirkland Signature’s cult following, and an e-commerce arm that’s picking up steam, and you’ve got a business model that’s basically recession-proof.

(Source: Giphy) 

So whether you’re there for a pallet of bottled water, a diamond necklace, or just the hot dog combo, one thing’s clear: Costco isn’t just surviving—it’s thriving. And judging by these numbers, they’re not slowing down anytime soon. In the meantime though, filter all the hype through a brain-cell here and place your bets accordingly. 

And as always, stay safe and stay frosty, friends! Until next time… 

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Stocks.News does not hold positions in companies mentioned in the article.