Analyst Says Greg Abel May Revisit Costco as Sales Rise 11.6%
Updated
Updated · The Globe and Mail · Aug 18
Analyst Says Greg Abel May Revisit Costco as Sales Rise 11.6%
1 articles · Updated · The Globe and Mail · Aug 18
Summary
Costco has emerged as a potential Berkshire Hathaway target under Greg Abel, with an analyst arguing the retailer still fits Berkshire’s preference for durable, cash-generating businesses.
11.6% third-quarter sales growth to $69.15 billion, 10.7% July sales growth and 17.7% digitally enabled sales growth underpin that case, alongside net income rising to $2.19 billion from $1.90 billion.
92.3% renewal rates in the U.S. and Canada and 89.8% worldwide show the strength of Costco’s membership model even after fee increases to $65 for Gold Star and $130 for Executive memberships.
Berkshire owned Costco for about two decades before exiting in 2020, and Warren Buffett later said selling was probably a mistake after the stock roughly doubled.
Costco is not in Berkshire’s March 31 13F portfolio, but the report argues Abel could favor the retailer’s moat, recurring revenue and long-term compounding profile.
Could Berkshire Hathaway's future leadership reverse a historic mistake by buying back into Costco's booming AI-driven retail empire?
As Costco quietly builds a high-converting digital engine, is the traditional warehouse giant secretly transforming into an unstoppable e-commerce monopoly?
With membership fees rising, what hidden psychological moat keeps over 82 million loyal shoppers from fleeing to cheaper digital rivals?