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 selection of goods, including its Kirkland Signature private-label line, 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.

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Costco’s Market Cap: $223.32B

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.

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Costco’s Net Worth: $143.68B

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 $143 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 Costco 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.

Costco 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.

Costco in 2022

Costco ended 2022 on a positive note. Its annual report revealed a 16% increase in net sales, outperforming 2021 and 2020 increases by 1% and 8%, respectively, despite the negative effects of inflation. The company attributed the strong performance to a 14% increase in comparable sales and sales at new club warehouses opened in 2021 and 2022. 

Revenue from membership fees increased 9%, matching 2021’s increase, due in part to member renewals — which are integral to Costco’s continued growth and reached record highs –, as well as upgrades from Gold Star to Executive memberships, which cost an additional $60. Costco reported 54 million Gold Star members in 2022 compared to 50.2 million in 2021 and 46.8 million in 2020.

The company has 29.1 Executive members. While comprising just 57% of paid memberships in the U.S. and Canada and 22% elsewhere, Executive members drove 71% of net sales in 2022. They also renew their memberships at a higher rate than Gold Star members.

Costco opened 26 new warehouses, including three relocations, in 2022. Other expenditures included the repurchase 863,000 shares of stock, and dividends totaling $3.38 per share.

What’s in Store for Costco in 2023?

In a fourth-quarter 2022 earnings call with analysts, Costco CEO Richard Galanti said the company is “seeing just a little light at the end of the tunnel” regarding pressures from higher commodity prices, higher wages, higher transportation costs and supply chain disruptions. Galanti also noted that Costco’s business model fares well in all economic environments, whether times are good and people have money to spend, or — as is the case in early 2023 — they’re looking to save in more troubled times. However, the company’s Q1 2023 earnings and membership revenue both fell short of analysts’ expectations, TheStreet reported, despite a 7.1% increase in same-store sales compared to the same quarter of 2022. 

Costco shares fell slightly after the earnings release but are up nearly 11% year to date as of Jan. 27. Several investment houses have confirmed their “outperform” and “buy” recommendations over the last two months. 

Costco expects to open 29 new warehouses in 2023, including four relocations, for a net increase of 25 warehouses. As for any increase in membership fees, Galanti told analysts in the company’s Q1 2023 earnings call that “it’s a question of when, not if.”

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 848 warehouses worldwide as of January 2023, with more than 584 located in the U.S. and Puerto Rico. Its shareholders consist mostly of institutional investors, which hold 70.26% 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 Jan. 29, 2023, 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.

This article originally appeared on GOBankingRates.com: How Much Is Costco Worth?