While many retailers struggle to survive, Costco is thriving, a fact made clear by its staggering $242.3 billion in net sales for 2023, fueled by legions of loyal members and a relentless focus on value.
Key Takeaways
- Costco Wholesale Corporation achieved net sales of $242.3 billion in fiscal year 2023, a 6.7% increase year-over-year
- Costco's net income for fiscal 2023 reached $6.7 billion, up 16.3% from fiscal 2022
- Membership fees contributed $4.6 billion to Costco's revenue in FY2023, representing 1.9% of total revenue
- Average warehouse sales volume at Costco was $289 million per store in FY2023
- Costco operates 591 warehouses in the U.S. as of 2023
- Kirkland Signature private label accounts for 25% of Costco's sales
- Costco has 130 million members worldwide as of 2023
- U.S. and Canada paid membership household count is 52 million in 2023
- Renewal rate for Costco Gold Star membership is 92%
- Costco employs 316,000 full-time and part-time workers worldwide as of 2023
- Average hourly wage at Costco is $29.50 in 2023
- 88% of Costco employees have employer-provided health insurance
- Costco opened 29 new warehouses in FY2023
- Total warehouses worldwide: 875 as of end 2023
- U.S. warehouses: 602, Canada: 107 in 2023
Costco's strong sales and membership growth fueled record profits in 2023.
Financial Performance
- Costco Wholesale Corporation achieved net sales of $242.3 billion in fiscal year 2023, a 6.7% increase year-over-year
- Costco's net income for fiscal 2023 reached $6.7 billion, up 16.3% from fiscal 2022
- Membership fees contributed $4.6 billion to Costco's revenue in FY2023, representing 1.9% of total revenue
- Costco's diluted earnings per share (EPS) for FY2023 was $15.06, a 19.2% growth from prior year
- Total assets of Costco stood at $58.5 billion as of September 2023
- Costco's operating income in FY2023 was $9.7 billion, with an operating margin of 4.0%
- Comparable sales growth for Costco in FY2023 was 5.0% globally
- Costco's U.S. comparable sales increased by 4.9% in FY2023
- International comparable sales rose 6.2% in FY2023 excluding foreign currency impact
- Costco's e-commerce sales grew 18.9% in FY2023
- Gross margin for Costco in FY2023 was 10.8%, stable from previous years
- Costco repurchased $5.8 billion worth of its shares in FY2023
- Dividend payout per share for Costco in FY2023 totaled $4.64
- Costco's market capitalization exceeded $350 billion as of late 2023
- Return on equity (ROE) for Costco in FY2023 was 32.1%
- Debt-to-equity ratio for Costco was 0.38 in FY2023
- Costco's free cash flow in FY2023 amounted to $7.2 billion
- Capital expenditures totaled $4.3 billion in FY2023 for new stores and remodels
- Costco's revenue per share in FY2023 was $546.28
- Pre-tax income margin for Costco was 4.2% in FY2023
- Costco's total liabilities were $25.9 billion end of FY2023
- Stock price appreciation for Costco was 56% over FY2023
- Costco's EBITDA for FY2023 reached $10.9 billion
- Net profit margin stood at 2.8% for FY2023
- Costco generated $242.3 billion in sales with only 840 warehouses in FY2023
- Membership fee revenue grew 8.3% to $4.6 billion in FY2023
- Costco's Q4 FY2023 net sales were $59.7 billion, up 5.2%
- Enterprise value of Costco was approximately $340 billion in 2023
- Price-to-earnings ratio (P/E) for Costco averaged 48x in 2023
- Costco's total equity was $32.6 billion at FY2023 end
Financial Performance Interpretation
Costco's impressive $242.3 billion in sales and staggering 32.1% return on equity prove that its real business is not just selling pallets of toilet paper but masterfully turning a cult-like membership fee into a cash-generating, profit-printing machine.
Global Expansion
- Costco opened 29 new warehouses in FY2023
- Total warehouses worldwide: 875 as of end 2023
- U.S. warehouses: 602, Canada: 107 in 2023
- Mexico has 40 Costco warehouses
- China operations include 5 warehouses under "Costco" name
- Japan: 38 warehouses, largest international market
- UK: 29 warehouses
- Australia: 15 warehouses
- Taiwan: 14 warehouses
- Korea: 17 warehouses
- Planned 26-28 new warehouses in FY2024
- First warehouse opened in Seattle 1983, now 602 in U.S.
- Expansion into Iceland planned for 2024, first in Europe beyond UK
- Spain warehouse opened in 2014, now 4 locations
- France: 2 warehouses since 2022 entry
- International sales represent 28% of total revenue in FY2023
- New warehouse ramp-up sales reach $250 million in first full year
- E-commerce expansion to 15 countries in 2023
- Business centers in 70% of international warehouses
- Remodeled 65 warehouses in FY2023 adding square footage
- Entry into Sweden explored for 2025
- Hawaii warehouses: 8, Puerto Rico: 1
- Cumulative warehouse openings since 1983: 875
- Average distance between warehouses: 5 miles in dense areas
- Global square footage totals 127 million sq ft
Global Expansion Interpretation
Costco is executing a master plan of global domination by the pallet-load, expanding its empire of bulk toilet paper and giant muffins at a pace so brisk it can now be measured in international sales percentages and the distance between two of its warehouses, which, in dense areas, is roughly the length of a very determined shopper's parking lot trek.
Membership Data
- Costco has 130 million members worldwide as of 2023
- U.S. and Canada paid membership household count is 52 million in 2023
- Renewal rate for Costco Gold Star membership is 92%
- Executive Membership (2% fee upgrade) held by 50 million cardholders
- Average member spends $1,665 annually on Costco card
- Membership fee for Gold Star is $60 annually, Executive $120 with 2% rewards
- 7.6% growth in paid household members in FY2023
- International paid households reached 24 million in 2023
- Member retention rate exceeds 90% globally
- 236 million total cardholders including household members in 2023
- Business membership accounts for 25% of total members
- Executive members generate 70% of total sales despite being half the base
- Membership growth in Mexico reached 1.2 million new in 2023
- Online membership renewal rate is 95%
- Average tenure of Costco member is 7.5 years
- Student membership program launched with 100,000 signups in first year
- Affiliate membership referrals account for 20% of new signups
- Membership fees as percentage of sales stable at 1.9%
- Japan membership grew to 7.1 million cardholders in 2023
- UK membership base is 800,000 households
- Digital app has 30 million active users among members
- Satisfaction score (NPS) for members is 75
- 85% of members shop monthly
- Lifetime value of average member exceeds $10,000
Membership Data Interpretation
Costco has perfected the art of the virtuous circle: they treat their members so well that half of them willingly pay double for the privilege of spending more, which in turn makes the company so profitable it can afford to keep treating them well, creating a loyalty loop so powerful that leaving would feel like abandoning a very well-stocked family.
Store Operations
- Average warehouse sales volume at Costco was $289 million per store in FY2023
- Costco operates 591 warehouses in the U.S. as of 2023
- Kirkland Signature private label accounts for 25% of Costco's sales
- Costco's average store size is 146,000 square feet
- Gasoline sales at Costco totaled over 4 billion gallons annually in recent years
- Pharmacy sales represent about 2% of Costco's total revenue
- Costco's optical departments generate $1.5 billion in annual sales
- Travel services through Costco generate $2 billion in bookings yearly
- Tire centers at Costco sell over 16 million tires annually
- Food court hot dog combo price unchanged at $1.50 since 1985
- Costco's fresh foods sales grew 10% in FY2023
- Non-foods merchandise category accounts for 43% of sales
- Ancillary businesses (gas, pharmacy, etc.) contribute 75% of operating income
- Average basket size at Costco is $150 per visit
- Inventory turnover ratio for Costco is 12 times per year
- Costco sells over 100 million rotisserie chickens yearly
- Electronics category sales up 15% in FY2023
- Apparel sales represent 10% of total merchandise sales
- Costco's vendor returns rate is under 1%
- Average daily foot traffic per warehouse is 15,000 members
- Bakery produces 142 million muffins annually across warehouses
- Meat department sales per store average $40 million yearly
- Produce sales volume exceeds 1 billion pounds annually
- Hearing aid centers serve 1 million customers yearly
- Business centers generate 20% of total sales
- E-commerce penetration is 7.5% of total sales in FY2023
- Same-day delivery through Instacart covers 99% of warehouses
- Kirkland Signature wine sales top 10 million cases annually
- Auto service bays handle 2 million oil changes per year
Store Operations Interpretation
Costco has mastered the alchemy of turning a $1.50 hot dog and a sea of rotisserie chickens into a $289-million-per-warehouse economic engine, where even the gasoline flows like a river of pure profit.
Workforce Statistics
- Costco employs 316,000 full-time and part-time workers worldwide as of 2023
- Average hourly wage at Costco is $29.50 in 2023
- 88% of Costco employees have employer-provided health insurance
- Turnover rate at Costco is 6% annually, lowest in retail
- 200,000 warehouse employees in the U.S. alone
- Costco promotes 75% of managers from within
- Average tenure of employees is 9 years
- 401(k) match up to 5% of salary for eligible workers
- Female representation in workforce is 52%
- Overtime pay averages 10% of total payroll
- Training hours per employee exceed 40 annually
- Unionized workforce in some international locations covers 15% of employees
- CEO Jim Sinegal started as a stocker, exemplifying promotion path
- Sick pay provided after 180 days, full coverage
- Employee stock purchase plan participation is 80%
- Diversity training mandatory for all supervisors
- Part-time workers eligible for benefits after 90 days
- Safety incident rate is 1.2 per 100 workers, below industry average
- Tuition reimbursement up to $2,500 per year per employee
- 25% of board members are women
- Childcare assistance provided at select locations
- Performance bonus for frontline workers averages 5% of salary
- Veteran hiring program employs 10,000 former military
- Remote work options for corporate staff cover 20% of roles
- Employee satisfaction score is 4.1/5 on Glassdoor
Workforce Statistics Interpretation
Costco has weaponized common decency by proving that treating employees as assets, not liabilities, is actually a ruthlessly efficient business model for crushing retail industry norms.
Sources & References
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