Sample note. Numbers are illustrative placeholders, not live data.
The model in one sentence
Costco sells goods at almost no markup so that it can sell you the right to buy them. Membership fees are a small share of revenue but a majority of operating income.
The numbers that matter
| Metric | Value |
|---|---|
| Membership renewal rate (US/Canada) | 92.9% |
| Fee income share of operating income | ~55% |
| Comparable sales growth | 5.8% |
| Forward P/E | 48.2x |
Why the multiple is so high
Recurring, high-renewal fee income is closer to a subscription than to retail. Investors price it accordingly. The risk is that they price it too accordingly: at nearly fifty times earnings, a two-point drop in renewal would be a real event.
What I am watching
- Fee increases and the renewal response in the two quarters that follow
- E-commerce mix and whether it dilutes warehouse traffic
- International warehouse openings as the next leg of growth
Educational content only. Not investment advice.