Costco's Fans Propel the Stock Higher
Shares of membership-only warehouse club Costco (NASDAQ: COST) have been on a tear this year, up 46% since Jan. 1 against just 18.3% for the S&P 500.
As consumer-goods investors -- and fans of huge shopping carts -- are aware, Costco operates membership-only, no-frills, self-service warehouse retail locations offering low prices on a wide range of products. Good deals on everything from diamond rings to snow tires, including grocery and household items mostly sold in bulk, ensure high sales volume and rapid inventory turnover, and services such as optical centers and travel discounts bring customer loyalty.
Efficient operations and happy customers have the current membership renewal rate at 90%, and the good word-of-mouth that comes from satisfied members increases their ranks. In terms of income, membership fees brought in $3.4 million in fiscal 2019, compared with $3.1 million in 2018.
Source Fool.com
