If I Could Only Buy and Hold 1 Stock Heading Into the Eye of a Stock Market Storm, This Would Be It
Costco has been doing well despite consumers' challenges.
Investors are facing many concerns, including high inflation, the Iran war, rising energy costs, increased tariffs, and the Federal Reserve's interest rate hikes. Despite these challenges, the S&P 500 index has risen 14.1% this year as of October 9. It's possible that the market will continue its upward trend, but eventually, economic difficulties and poor stock market performance will come.
However, this shouldn't deter you from investing in stocks. Certain companies perform well regardless of economic conditions. Costco tops the list of such companies. While it may seem odd that a retailer, especially one with an annual membership fee, thrives during tough economic times, Costco is not an ordinary retailer. To shop at Costco, customers must become members and pay an annual fee.
In return, they receive a wide range of products and services in large quantities, typically at competitive prices. Costco's membership renewal rate consistently stays high, at 90% globally in the latest fiscal year ending August 30. The company adds new members regularly, ending the period with 84.1 million paid members, up from 76.2 million and 81 million in 2024 and 2025, respectively.
Despite the economic hardships, consumers are still drawn to Costco's warehouses. Over the past two quarters, Costco's same-store sales have grown by 6.7% and 6.6%, respectively. When analyzing Costco's core operations, these figures have been adjusted to account for volatile gas prices and foreign currency translations. While Costco focuses on sales growth, it also maintains strong profitability.
Fourth-quarter operating income increased by 13.8% year-over-year to $3.8 billion, marking the company's 12.5% profit growth for the year. Costco's management continues to expand the number of warehouses, adding 25 last year, bringing the total to 939 locations. Investing in stocks can be a wise decision, even during uncertain times. Costco is a company that tends to perform well under various economic circumstances.
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