How Much Is Costco Worth?
Costco’s austere warehouses don’t offer much in terms of eye candy, but inside you’ll find an emporium capable of satisfying most of your needs. Whether it’s groceries, clothes or electronics, Costco’s myriad goods and membership model have proven resilient in an era of retail titans. Here are some figures that help break down Costco’s success and ongoing market activities.
|CEO Craig Jelinek’s Salary (2021)||$1,032,885|
|What Costco Is Worth|
|Share Price, 52-Week Range||$322.38-$571.49|
|2021 Revenue||$195.93 billion|
|2021 Profit||$5.01 billion|
|GOBankingRates’ Evaluation of Costco’s Net Worth||$125.09 billion|
|All information on 52-week range is accurate as of March 14, 2022.|
Costco’s Market Cap: $234.474B
Market cap is one measure of a company’s value. It’s calculated by multiplying the number of outstanding shares by the current share price, which means it represents the value of all of the company’s stock. A strong market cap might mean investors are comfortable buying more stock.
Costco’s Net Worth: $125.09B
Even though market cap gives you a clear sense of what the market values a company at, it’s based on market sentiment, which, in turn, is based on a multitude of consumer variables and market players.
The GOBankingRates Evaluation calculates a company’s net worth using only full-year profits and revenue from the last three years and the company’s assets and liabilities.
Based solely on Costco’s revenue and profits from the last three fiscal years, as well as its assets and liabilities, Costco’s net worth is over $125 billion.
Costco and the Pandemic
As the pandemic arrived in the U.S. and the country shut down except for essential services, consumers who could venture out made good use of warehouse clubs to stock up on groceries and household products. That increase in purchases resulted in increased sales for Costo despite the dampening effects of stay-home orders and the closure of nonessential store departments. In the third quarter of the company’s fiscal year 2020, which included March, when most shutdowns went into effect, same-store sales grew 4.8% compared to the year prior, according to CNBC.
With higher sales came higher expenses, as new labor and sanitation costs reduced the company’s earnings by over $280 million, CNBC reported. Also affecting the bottom line was the fact that consumers scaled back spending on discretionary purchases like luggage.
Costo ended 2020 on a high note, beating analysts’ estimates for both the fourth quarter and the full year and finishing the year with double-digit profits and comparable sales increases, Supermarket News reported at the time.
Costco’s share price climbed steadily over the course of the year, from $305.52 on Jan. 1, 2020, to $352.43 on Jan. 1, 2021.
Costo in 2021
Despite ongoing labor and supply chain issues and price increases, Costo’s performance remained strong in fiscal year 2021, which ended Aug. 31, 2021. Earnings grew from $9.02 per diluted share in 2020 to $11.27 per diluted share in 2021, exceeding analysts’ consensus estimate of $10.72, according to Supermarket News. U.S. comparable sales were up 13.6%, according to Costco’s news release. Canadian and “other international” sales were up 12.1% and 13.4%, respectively, and e-commerce grew 42.6% compared to 2020.
The company expanded its footprint that year with 20 new stores and two relocations.
What’s in Store for Costco in 2022?
Costco released its second-quarter 2022 earnings on March 3. Not surprisingly, growth has slowed as the pandemic has waned and consumers have returned to more normal shopping habits. However, same-store sales in the U.S., Canada and other international locations grew $15.8%, 16% and 14.4%, respectively, and e-commerce grew 12.5% compared to the previous quarter. U.S. same-store sales were especially strong in February, with 17.4% growth over the four-week period.
Earnings reached $2.92 per diluted share for the quarter, up from $2.14 per diluted share in the second quarter of 2021.
In an earnings call with analysts, Costco Chief Financial Officer Richard Galanti said the company could open 25 to 30 more stores this year and accelerate new openings over the next several years.
Although share prices have been rocky so far this fiscal year because of slowed growth, 29 analysts polled by Yahoo Finance give the stock a consensus rating of “buy.” The consensus target price from 31 analysts is $558.51, which is just slightly higher than the most recent closing price of $527.42.
Costco’s History and Investors
Costco started out as Price Club, with its first location being staged in a converted aircraft hangar in 1976. The company initially only served small businesses but realized it could increase profits by including select customers in its consumer profile, resulting in the membership model familiar to shoppers today. Jim Senegal, an executive vice president of merchandising and marketing at Price Club, co-founded Costco Wholesale in 1983, and in 1993, Price Club and Costco Wholesale merged into one.
Costco operates 828 warehouses worldwide as of February 2022, with more than 572 located in the U.S. and Puerto Rico. Its shareholders consist mostly of institutional investors, which hold 69.04% of all outstanding shares. The three largest are The Vanguard Group Inc., BlackRock Inc. and State Street Corp.
Sean Dennison contributed to the reporting for this article.
Data is accurate as of March 14, 2022, and subject to change.
Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.
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- Costco. 2022. "Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal 2022 and February Sales Results."
- The Motley Fool. 2022. "Costco Wholesale (COST) Q2 2022 Earnings Call Transcript."
- CNBC. 2020. "Costco saw sales bounce from pandemic, but stay-at-home orders limited bigger gains."
- Salary.com. "W. Craig Jelinek."