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Costco Wholesale Corporation (Costco)考拉的英文
I. Investment Highlights
Company Profile
Costco is a low cost/discount retailer that operates through 417 warehou style retail stores, and Access to Costco Warehous is restricted to members who pay a small annual fee for access. Started primarily as a small business supply company, Costco’s inventory focus has grown to include high-end consumer goods including home electronics and luxury items. Costco has succeeded by focusing on the demands a specific customer group while continues to provided for other profitable customers. Growth Dynamics
Costco’s quarterly sales growth is in tune with the rest of the industry at ~ 10%. This is a very sustainable growth rate and while not stellar, when combined with the lowest labor costs in the industry, results in an excellent return.
Revenue Est. Current
Quarter Next
Quarter
Current
Year
Next Year
Avg. Estimate 12.78B 13.85B 58.7B 63.95B No. of An. 11 11 13 11
Low Estimate 12.46B 13.39B 57.17B 61.13B High Estimate 13.07B 14.07B 60.53B 66.28B Year Ago
Sales
11.58B 12.66B N/A 58.74B Sales Growth 10.4% 9.4% N/A 8.9% Source:
Since a great deal of Costco’s growth comes from new store openings, growth is somewhat limited by the availability of new markets. Costco’s management has recognized this and has already begun an extensive and successful overas expansion plan while maintaining steady domestic growth. Growth in older stores is spurred by the addition of additional rvices included gas stations, pharmacy, and other rvice oriented enterpris.
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Earnings per share ()
II. Executive Summary
Costco is an international discount retailer with 415 retail locations in six countries and thirty ven states. Small business owners and professionals in the $100k salary range are the primary customers due to their disposable incomes and demand for high-end goods/rvices. The incread demand for designer goods has led to incread sales of designer home furnishings including furniture and accessories.
Day to day office and home supplies, from paper to flour provide the economic saving of bulk buying and bring customers in who can then make high dollar impul buys generating one of the highest dollars per square foot.
Low volatility and consistent growth combined with excellent leadership and corporate policy make Costco an excellent stock for long term investing. Recommendation: BUY
Costco is a buy for anyone who wants a low risk stock that will outperform the market and wants long term stability with excellent growth and consistent dividends.
Target Price: ~ $45 the going market rate
Pros
-Highest sales/profit per square foot in the industry
-Lowest labor costs in the industry
-Steady/consistent growth
-Low risk
-Better than market returns
-Everybody likes low prices
Cons
-Heavy economic link – luxury goods
-Big name competition - Wal-Mart
veral造句-Long-term growth limitations possible
Critical Factors
High dollar per square foot and low costs allow for some of the lowest prices in the industry. This combined with high quality and low cost creates high value customers that purcha large amount of high cost items, particularly impul buys.
III. Company Description
From the Costco website:
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Costco Wholesale Corporation operates an international chain of membership warehous, mainly under the "Costco Wholesale" name, that carry quality, brand name merchandi at substantially lower prices than are typically found at conventional wholesale or retail sources. The warehous are designed to help small-to-medium-sized business reduce costs in purchasing for resale and for everyday business u. Individuals may also purcha for their personal needs.
Costco's warehous prent one of the largest and most exclusive product category lections to be found under a single roof. Categories include groceries, candy, appliances, television and media, automotive supplies, tires, toys, hardware, sporting goods, jewelry, watches, cameras, books, hou
wares, apparel, health and beauty aids, tobacco, furniture, office supplies and office equipment. Costco is known for carrying top quality national and regional brands, with 100% satisfaction guaranteed, at prices consistently below traditional wholesale or retail outlets.
Members can also shop for private label Kirkland Signature products, designed to be of equal or better quality than national brands, including juice, cookies, coffee, tires, hou wares, luggage, appliances, clothing and detergent. The Company also operates lf-rvice gasoline stations at a number of its U.S. and Canadian locations. Additionally, Costco Wholesale Industries, a division of the Company, operates manufacturing business, including special food packaging, optical laboratories, meat processing and jewelry distribution. The business have a common goal of providing members with high quality products at substantially lower prices.
Leadership
价格便宜
IV. Economic and Industry Environment
Industry’s Relation to the Economy
The discount retailer industry on a while is not very related to the economy. During poor economic ti
mes, discount retailers tend to do better since people have less money to spend. Costco is a high-end discount retailer, primarily rving small business owners who are susceptible to economic swings of the economy in general. Overall I would say there is a high correlation between Costco’s industry and the economy in general, unless Costco is able to shift is merchandi to follow the swinging economy.
At a local level, Costco has done veral things that have incread the value of each customer. Products are marked up a flat rate so customers know products are priced at a
very reasonable level. Products are high quality and the return policy is very customer friendly. Lastly, a great deal of the inventory at Costco has inconsistent availability. Products often ll out and may never be there again, this low availability combined with low prices and high quality dramatically increa impul buying, particularly of high cost items.
河南中招服务平台官网成绩查询Competition
Two major chains, Costco and Sam’s Club, a Wal-Mart Division, dominate the United States warehou wholesale market. BJ’s Wholesale Club is a regional player, located only on the Atlantic aboard of the US. Overas there are many smaller competitors, but most are focud on food a
nd not retail merchandi.
DIRECT COMPETITOR COMPARISON
COST WMT BJ TGT Industry Market Cap: 21.87B 185.57B 1.78B 46.2B 291B Qtrly Rev Growth (yoy): 10.10% 10.20% 9.8% 13.6% 10.0 Revenue (ttm): 51.37B 298.46B 7.68B 49.57B NA Gross Margin (ttm): 1.96% 23.06% 1.55% 4.82% 3.4% EBITDA (ttm): 1.97B 22.39B 104.22M 5.28B NA Oper Margins (ttm): 2.89% 5.94% 2.52% 7.92% NA Net Income (ttm): 1.01B 10.72B 121.41M 10.72B NA Price/Book Value 2.47 3.85 1.91 3.45 3.4
WMT = Wal-Mart Stores Inc.
febeBJ = BJ’s Wholesale Club
TGT = Target
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Industry = Discount Variety Stores
V. Company Position
Market Information
Costco operates in 6 countries and 37 states. Regions with a large number of small business owners and/or higher income professionals with a demand for high-end goods are typical.
Product Development, R&D
休息日As a discount retailer, there few R&D costs associated with Costco’s operations. Costco does maintain its own Kirkland brand which lls high-quality products at lower prices. There are some costs associated with this development, but they are limited. Kirkland branded products cover most products Costco lls, particularly food and clothing.
Demographics
Costco primarily target independent small business owners who typically have $100,000 in personal income. Costco started by providing bulk sales of the items the business owners needed for day t
o day business operations, and then moved into supplying high end luxury merchandi that this customer group was demanding. It is the focus on this high-end demographic that differentiates Costco from other discount retailers, such as Sam’s Club.
Threat of Substitution
Costco’s demographics focus does limit the overall threat of substitutions. One common substitute, Sam’s Club lls bulk food and dry goods as well al a limited lection of high end merchandi. The increa in high-end sales has been a recent shift in an attempt to compete with Costco’s significantly higher dollar per square foot of $795 vs. $516 at Sam’s and $411 at BJ’s Wholesale Club. In fact, Costco received $13,647 in profit per employee last year, compared to $11,039 as Sam’s Club.
This focus on high-end clients, mixed with low prices has created a loyal clientele that creates a significant barrier to entry.
Image
By having some of the best benefits in the industry, Costco has created a hard working and intenly
loyal group of employees. The excellent treatment of employees has helped to create a very positive image among shareholders, customers, and suppliers that few of their competitors can match.
Among its customers, Costco is en as a high end/low cost store. Products are expected to be high quality and among the cheapest available. This image of low-cost/high-quality leads customers to make impul purchas that would otherw i not occur. Sam’s Club, on the other hand, is associated with bulk buying cheap/low-quality goods and items.
Management Quality
Costco’s leadership has made excellent decision about store placement, expansion, target market, and product lection. Most promotions come from within and employees that generate exceptional results are rewarded and promoted within the firm. Management quality appears to be excellent and should be into the faceable future.
One fact of interest is the significant shareholdings of the CEO, Chairman, Sr. VP, and Executive VP (e Other Considerations). It is preferential for high-level executives with
