Costco continues to do very well. I have been a bull on Costco for a long while.
The key to Costco is they take care of their three main constituencies:
- They take care of their customers with quality, reasonably priced merchandise.
- The take care of their employees with higher than average retail wages.
- The take care of their shareholders. They are about due for another one of their hefty special dividends.
It is a simple formula that keeps their stock price rising. Too many firms, abrogate this simple formula when they try to grow too fast. Private equity is well-known for “killing the golden goose” with their impatience and greed. If all parties are happy, they all work together to build an outstanding organization.
Personally, I like how Costco doesn't give guidance and they don't pay a whole lot of attention to Wall Street.
Costco keeps doing well by doing right by all their constituencies. Too many firms focus excessively on Wall Street. If they only kept their focus on their business versus trying to manipulate the "score board", they would be marvelously successful too.
Costco’s operational model is an “elephant” that hides in plain view. Too bad that many company’s managements just don’t see that well. Maybe they should go see an eye doctor!
