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How Global Expansion Is Shaping Costco's Long-Term Profile
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Key Takeaways
COST plans 27 new warehouses in fiscal 2025, expanding its global footprint to 914 locations.
International segments posted Q3 adjusted comparable sales growth of 8.5% and 7.8%.
Localizing supply chains has cut prices by 40% on Kirkland Signature products in APAC markets.
Costco Wholesale Corporation’s (COST - Free Report) long-term profile is defined by its disciplined global expansion strategy, moving beyond the domestic market to tap into high-potential international regions. COST currently operates 908 warehouses worldwide, with a significant global presence spanning 109 in Canada, 41 in Mexico, 37 in Japan, 29 in the United Kingdom, and notable growth in countries such as Korea (20), Australia (15), Taiwan (14) and China (7). Costco plans to open 27 new warehouses (24 net new) in fiscal 2025, bringing its global count to 914.
This international push is making a substantial contribution to Costco’s top line. In the third quarter, the Other International and Canada segments reported adjusted comparable sales growth of 8.5% and 7.8%, respectively. While foreign exchange fluctuations created a minor 1.2% headwind, Costco continues to leverage its global scale and operational discipline to strategically manage supply-chain dynamics.
Beyond sales figures, global expansion is playing a key role in enhancing Costco’s operational efficiency. The company is localizing supply chains for its Kirkland Signature brand to better serve regional markets. For example, sourcing Kirkland Signature Ultra Clean Laundry products directly from Asia for APAC warehouses has resulted in a 40% reduction in member prices within the region. This localization strategy not only mitigates tariff-related costs but also strengthens Costco’s ability to deliver member value through competitive pricing.
Costco’s global expansion is reshaping it into a more resilient, efficient and member-focused retailer. By blending regional relevance, Costco is driving higher volumes, stronger renewal rates and greater supply-chain agility.
Costco’s Price Performance, Valuation and Estimates
Costco stock has been a standout performer, with shares rallying 11.2% in the past year, outpacing the industry’s growth of 4.6%. The company has also comfortably outperformed key peers, such as Target Corporation (TGT - Free Report) and Dollar General Corporation (DG - Free Report) . During the same period, Target shares have tumbled 32.4%, while Dollar General has fallen 10.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 48.07, higher than the industry’s ratio of 31.61. COST carries a Value Score of D.
Costco is trading at a premium to Dollar General (with a forward 12-month P/E ratio of 17.79), and Target (12.99).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 8.1% and 11.6%, respectively.
Image: Bigstock
How Global Expansion Is Shaping Costco's Long-Term Profile
Key Takeaways
Costco Wholesale Corporation’s (COST - Free Report) long-term profile is defined by its disciplined global expansion strategy, moving beyond the domestic market to tap into high-potential international regions. COST currently operates 908 warehouses worldwide, with a significant global presence spanning 109 in Canada, 41 in Mexico, 37 in Japan, 29 in the United Kingdom, and notable growth in countries such as Korea (20), Australia (15), Taiwan (14) and China (7). Costco plans to open 27 new warehouses (24 net new) in fiscal 2025, bringing its global count to 914.
This international push is making a substantial contribution to Costco’s top line. In the third quarter, the Other International and Canada segments reported adjusted comparable sales growth of 8.5% and 7.8%, respectively. While foreign exchange fluctuations created a minor 1.2% headwind, Costco continues to leverage its global scale and operational discipline to strategically manage supply-chain dynamics.
Beyond sales figures, global expansion is playing a key role in enhancing Costco’s operational efficiency. The company is localizing supply chains for its Kirkland Signature brand to better serve regional markets. For example, sourcing Kirkland Signature Ultra Clean Laundry products directly from Asia for APAC warehouses has resulted in a 40% reduction in member prices within the region. This localization strategy not only mitigates tariff-related costs but also strengthens Costco’s ability to deliver member value through competitive pricing.
Costco’s global expansion is reshaping it into a more resilient, efficient and member-focused retailer. By blending regional relevance, Costco is driving higher volumes, stronger renewal rates and greater supply-chain agility.
Costco’s Price Performance, Valuation and Estimates
Costco stock has been a standout performer, with shares rallying 11.2% in the past year, outpacing the industry’s growth of 4.6%. The company has also comfortably outperformed key peers, such as Target Corporation (TGT - Free Report) and Dollar General Corporation (DG - Free Report) . During the same period, Target shares have tumbled 32.4%, while Dollar General has fallen 10.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 48.07, higher than the industry’s ratio of 31.61. COST carries a Value Score of D.
Costco is trading at a premium to Dollar General (with a forward 12-month P/E ratio of 17.79), and Target (12.99).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 8.1% and 11.6%, respectively.
Image Source: Zacks Investment Research
Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.