Citing the accomplishment by Costco Wholesale Corp. of keeping its prices competitive while boosting sales, Yahoo Finance has named the warehouse club operator its 2022 Company of the Year.
“In a year of rampant inflation—not seen since the early 1980s—Costco was a warm hug to millions of loyal members by keeping prices for everything from food to gasoline as low as possible, just as rivals were aggressively jacking up prices,” Yahoo Finance stated. “It also provided a warm hug to its fans on Wall Street, producing stellar results from sizable same-store sales increases to its stock price, which got the best of the S&P 500 index. Not to mention its sales of $222.7 billion in the fiscal year up a whopping 16 percent.”
For the 52-weeks ended Aug. 28, 2022, Issaquah, Wash.-based Costco reported a comparable U.S. store sales increase of 15.8%. Among the best performing categories were candy, frozen, bakery and deli. In addition, the company reported a record 92.6% membership renewal rate in the U.S. and Canada.
Costco’s growth is continuing into fiscal 2023, though at a slower rate.
November net sales totaled $19.17 billion for the four weeks ended Nov. 27, 2022, an increase of 5.7 percent from $18.13 billion last year, the company reported. In addition, for the thirteen weeks ended Nov. 27, 2022, the company reported net sales of $58.36 billion, an increase of 7.9 percent from $54.10 billion last year. U.S. comparable store sales were up 6% for the four weeks and 8.8% for 13 weeks.
“As consumers battled the soaring cost of gasoline, groceries and appliances, Costco may have done more than any other U.S. company to help Americans stretch their paychecks,” Yahoo Finance said in a statement. “Profit rose 17% even as the company held the line on price hikes. Wall Street analysts praise Costco's crisp execution and rate the stock as outperform, according to Capital IQ. The stock is down 13% this year, as of Dec. 2, but that still beats the S&P 500 by a couple percentage points. Not bad in a lousy market. ”
Costco, which operates 845 warehouses, including 582 in the United States and Puerto Rico and 107 in Canada, as well as e-commerce sites, stated that it expects to open 15 new warehouses in the U.S. during its current fiscal year.
“If there were one company that could say rising prices weren't a negative, it was Costco,” Yahoo Finance said in a statement. “The Great Inflationary Outbreak of 2022” placed Costco’s worldwide stores squarely under the spotlight, offering up yet another opportunity for the 39-year-old retailer to showcase, to investors and members, its low-price leadership chops.”
Despite Costco’s performance, Yahoo Finance noted that “like any other retailer, there are always uncertainties lurking.” Costco didn’t have a perfect November, as same-store sales growth cooled versus October. Investors promptly punished the often Teflon stock on the view 2023 would bring further sales slowdowns. Membership fees, which have gone unchanged since 2017, are another wild card, as an increase would grow revenues and profits, “but could also turn off some loyal, still inflation-weary, customers.”
