Costco

Costco’s business is highly predictable. Its financials and comps (same-warehouse sales) have grown consistently over decades. FY2024 saw 5% net sales growth (8% when adjusting for extra week) due to steady comp gains and new warehouses. Membership revenue (which lags sales) grows similarly (~5% in 2024).

Recurring membership fees booked in advance make cash flows smooth. Morningstar highlights Costco’s “very consistent revenue and earnings growth” and low volatility thanks to inelastic staples and advance fee booking. The company’s core market (groceries, household goods, gas, etc.) is defensive.

Growth roughly tracks population and consumer spending trends; a mild recession would dampen normal goods spending but membership fees would largely persist. International expansion (e.g. new UK/Asia warehouses) and e-commerce (still a small % of sales) add growth optionality.