Costco’s stellar performance in the first quarter of fiscal 2025 has solidified its position as a retail giant, exceeding even the most optimistic analyst predictions. The company’s impressive revenue and earnings per share surpassed expectations, further validating the late, great investor Charlie Munger’s unwavering faith in the company. Munger, who served on Costco’s board until his passing last year, famously declared his love for Costco, calling himself a “total addict” and vowing never to sell his shares. His admiration stemmed from Costco’s unique and highly effective business model: a combination of efficient operations, remarkably low prices, and the powerful draw of its membership program.
This first-quarter success wasn’t just a matter of meeting expectations; it was a parade of record-breaking achievements. Costco Logistics reached a remarkable milestone, completing nearly 1 million deliveries in the quarter, with over 196,000 deliveries in a single week alone. This highlights Costco’s impressive expansion in the e-commerce arena and its ability to seamlessly integrate online and in-store shopping experiences. Further demonstrating this strength, the company continued to gain market share in the online retail space.
The success wasn’t limited to logistics. Costco’s U.S. bakery division baked its way to new heights, selling a staggering 4.2 million pies in the three days leading up to Thanksgiving. This phenomenal achievement underscores the popularity of Costco’s bakery offerings and its ability to effectively cater to seasonal demands.
Costco’s pharmacy business also saw explosive growth, exceeding expectations with prescription growth surpassing 19% for the first quarter. This marked yet another record-setting performance for the division. Finally, on Halloween, Costco’s food courts served a whopping 274,000 whole pizzas – a new company record and a testament to the enduring appeal of their affordable and delicious food court offerings.
Ron Vachris, Costco’s president and CEO, aptly summarized these achievements: “All of these milestones reflect the continued strength of our business across the membership offering.” These impressive results speak volumes, not just about Costco’s operational efficiency and market dominance, but also about the visionary leadership that has guided the company’s remarkable trajectory. The fact that Costco’s share price has soared by a phenomenal 4,536% since 1997 – a testament to its long-term growth and profitability – further reinforces this point.
Analysts are equally impressed. Benzinga reports a consensus price target of $954.38, based on the assessment of 26 analysts. While estimates vary, with a high of $1145 and a low of $700, the average price target of $1073.33 suggests a significant upside potential for investors.
Costco’s continued growth and ability to consistently surpass expectations position it as a leader in the retail industry, a testament to a proven business model and a commitment to exceeding customer expectations. The company’s future remains bright, echoing Charlie Munger’s insightful belief in its enduring success.
