Costco Wholesale Corporation · NASDAQ:COST
Costco Wholesale — Shareholder Meeting (January 2025)
102 slides from Costco Wholesale's shareholder meeting presentation, Jan 23, 2025
Slide 1: Annual Meeting of Shareholders January 23, 2025
Annual Meeting of Shareholders January 23, 2025
Slide 2: Hamilton E. James
Hamilton E. James Joined the Board in 1988; Chairman of the Board since 2017 Chairman of Jefferson River Capital Former Executive Vice Chairman and President / Chief Operating Officer of The Blackstone Group
Slide 3: Board Members
Board Members
Slide 4: Susan L. Decker
Susan L. Decker Joined the Board in 2004 CEO and Founder of Raftr Formerly President and CFO of Yahoo Director of Berkshire Hathaway Inc. and Vail Resorts, Inc.
Slide 5: Kenneth D. Denman
Kenneth D. Denman Joined the Board in 2017 General Partner at Sway Ventures Formerly President and CEO of Emotient, Inc. Director of Motorola Solutions, Inc.
Slide 6: Helena Buonanno Foulkes
Helena Buonanno Foulkes Joined the Board in 2023 Former CEO and Director of Hudson’s Bay Company Former President of CVS Pharmacy Director of Skillsoft Corp.
Slide 7: Sally Jewell
Sally Jewell Joined the Board in 2020 Secretary of the Interior under President Barack Obama Former Chief Executive Officer and Director of Recreational Equipment, Inc. Director of Symetra Financial Corporation
Slide 8: Jeffrey S. Raikes
Jeffrey S. Raikes Joined the Board in 2008 Co-Founder of the Raikes Foundation Former CEO of the Bill & Melinda Gates Foundation Former President of Business Division at Microsoft
Slide 9: John W. Stanton
John W. Stanton Joined the Board in 2015 Chairman and Managing Partner of the Seattle Mariners Chairman of Trilogy Equity Partners and Director of Microsoft Founder and Former Chairman and CEO of Western Wireless Corporation Former Chairman and CEO of T-Mobile USA (formerly VoiceStream Wireless Corp
Slide 10: Mary Agnes (Maggie) Wilderotter
Mary Agnes (Maggie) Wilderotter Joined the Board in 2015 Former Chairman and Chief Executive Officer of Frontier Communications Chairman of the Board of Directors of DocuSign and Director of Sana Biotechnology
Slide 11: Ron Vachris
Ron Vachris Joined the Board in 2022 CEO since 2024
Slide 12: Departing Board Members
Departing Board Members
Slide 13: Richard A. Galanti
Richard A. Galanti Joined the Board in 1995 Executive Vice President and Former Chief Financial Officer Former Director of the Federal Reserve Bank of San Francisco
Slide 14: Craig Jelinek
Craig Jelinek Joined the Board in 2010 Former CEO (from 2012 – 2023)
Slide 15: Former Board Member
Former Board Member
Slide 16: John W. Meisenbach
John W. Meisenbach Director since inception in 1983 until 2020 Served in the U.S. Navy Submarine Service President of MCM, a Meisenbach Company John was a friend and advisor to many people, including Jeff Brotman and Jim Sinegal. As a long-serving Costco board member, he played an important role in
Slide 17: Annual Meeting of Shareholders January 23, 2025
Annual Meeting of Shareholders January 23, 2025
Slide 18: Costco Today
Costco Today • 3rd largest global retailer • 11th largest in Fortune 500 • $416 billion market cap* *As of January 10th, 2025
Slide 19: Costco Today
Costco Today • Sales $250B – FY’24 • 131M sq. ft (147K / whse) • $260M average sales / whse • 322K employees worldwide
Slide 20: Costco Today: Members
Costco Today (Q1 FY’25) Members: – 77M households – 139M cardholders – 92.8% renewal rate (U.S. & CN) – 90.4% renewal rate worldwide – $4.9B in membership fee income (LTM)
Slide 21: Costco Today: Warehouses Worldwide
Costco Today (January 2025) 897 Warehouses Worldwide 617 - U.S. 14 - Taiwan 109 - CN 7 - China 41 - Mexico 5 - Spain 36 - Japan 2 - France 29 - UK 1 - Iceland 19 - Korea 1 - New Zealand 15 - Australia 1 - Sweden
Slide 22: Keys to Our Success
Keys to Our Success (FY’24 figures) High Sales Productivity: Sales Per Warehouse $260M Sales per Sq Ft. ~$1,800 Comparable Sales 5.3% Inventory Turnover ~13x
Slide 23: Fiscal Year Results
Fiscal Year Results (in MM’s except for EPS) 2023 2024 Sales $237,710 $249,625 Net Income $6,292 $7,367 Diluted EPS $14.16 $16.56
Slide 24: 1st Quarter
1st Quarter (in MM’s except for EPS) 2024 2025 Sales $56,717 $60,985 Net Income $1,589 $1,798 Diluted EPS $3.58 $4.04
Slide 25: Comp Traffic (Frequency)
Comp Traffic (Frequency) FY’10 –’20 3.8% FY’21 7.0% FY’22 7.5% FY’23 4.8% FY’24 5.7% FY’25 – Q1 5.1%
Slide 26: FY'24 Highlights
FY’24 Highlights ● Sales of $250B ● 247 locations > $300M ● 49 locations > $400M ● 29 net new warehouse openings ● Continued investment in employee wages ● Record $9.3B returned to shareholders through dividends and buybacks
Slide 27: Expansion
Expansion FY’24 Warehouse Count Beginning: 861 Openings: +29 Ending: 890 Today: 897
Slide 28: NE Billings, Montana - Relocation
NE Billings, Montana - Relocation 10/27/23
Slide 29: Scarborough, Maine
Scarborough, Maine 11/17/23
Slide 30: Anchorage, Alaska Business Center
Anchorage, Alaska Business Center 2/2/24
Slide 31: Nanjing, China
Nanjing, China 5/28/24
Slide 32: NW Omaha, Nebraska
NW Omaha, Nebraska 7/12/24
Slide 33: Cheongna, Korea
Cheongna, Korea 8/22/24
Slide 34: Okinawa Nanjo, Japan
Okinawa Nanjo, Japan 8/24/24
Slide 35: Saturation
Saturation ● No! ● Next 5-10 years: ○ 25-30 openings / year ○ Infills / new markets ○ International ○ Business Centers
Slide 36: Warehouses Worldwide
Warehouses Worldwide 2024 2034 +/- North America 730 917 187 Asia/Aus 91 141 50 Europe 37 58 21 New Markets 0 4 4 Business Centers 32 50 18 Total 890 1,170 280
Slide 37: Merchandise Highlights
Merchandise Highlights
Slide 38: Jewelry / Precious Metals
Jewelry / Precious Metals 518K Carats of Diamonds Sold Globally in FY’24
Slide 39: Bullion Newness
Bullion Newness Good Luck Lady Liberty Diwali 1oz Gold Bar Koi Fish 1oz 10 oz Silver 15k units Only at Costco
Slide 40: Fresh Foods
Fresh Foods +7% Globally in FY’24
Slide 41: Service Deli
Service Deli 154M Rotisserie Chickens Sold Globally in FY’24
Slide 42: Kirkland Signature Sushi Expansion
Kirkland Signature Sushi Expansion - Made Daily - Fresh Fish Cut Daily - Only Real Crab - 20%+ value
Slide 43: New Kirkland Signature
New Kirkland Signature Margherita Take & Bake Combo Take & Bake Sell Price: $17.99 Sell Price: $17.99 Value: 45% Value: 55%
Slide 44: Pharmacy / Health & Beauty
Pharmacy / Health & Beauty +7% Globally in FY24
Slide 45: Ticket Program
Ticket Program +80% Globally in FY’24
Slide 46: New Home Improvement Kiosks
New Home Improvement Kiosks Kohler LuxStone Infinity from Marvin -Walk-in showers -Custom order windows -Bathtubs -Custom order -Hardware & other patio doors accessories -10% Shop Card -10% Shop Card Sunsetter Shaw Grass -Retractable awnings -Landscape turf -Retractable screen systems -Pet turf -Ext
Slide 47: New Brands
springfree New Brands cococozy TRAMPOLINE ” aly, [ea] MAGIC Hydro Flask Wrangler SPOON S > LA BO Y’ = © ex e none som oy p, PELOTON. (le BaBylissP20° — |NFINITY Ruggable TR U F F EE fom MARVIN
Slide 48: Why Kirkland Signature
• We control the quality, value for our members • Ability to build/create a better item • Innovative packaging, clean ingredients, full traceability • Ensure global supply for our future • 20% value to the national brand • Continuous innovation
Slide 49: New Kirkland Signature
New Kirkland Signature KS Bacon & Gouda Egg Bites KS Veggie & Cheese Egg White Bites Sell Price: $11.99 Sell Price: $11.99 Value: 19% Value: 19%
Slide 50: New Kirkland Signature
New Kirkland Signature Coming soon - New value to the brand: 31-35% - Current value to the brand: 22-27% - Pocketed waistband (all sizes) - Pocketed waistband (size 3 - 6 only) - 2x more stretch in waistband - Longer & thicker absorbent layer - Smaller pack sizes for size 1 and size 2
Slide 51: New Kirkland Signature
New Kirkland Signature Coming soon KS Unisex Shearling Slipper KS 5W30 High Mileage Oil Item: KS Iron Set Sell Price: $24.99 Sell Price: $35.99 Sell Price: $499.99 Value: 77% Value: 45% Value: 58%
Slide 52: New Kirkland Signature
New Kirkland Signature KS Organic Ghee KS Lightly Breaded Chicken KS Chicken Tortilla Soup Sell Price: $19.99 Breast Fillet Sell Price: $9.49 Value: 12% Sell Price: $12.99 Value: 15% Value: 13%
Slide 53: New Kirkland Signature
New Kirkland Signature KS Mimosa KS Vodka Soda KS Old Fashioned Sell Price: $7.99 Sell Price: $24.99 Sell Price: $16.99 Value: 30% Value: 19% Value: 36%
Slide 54: Kirkland Signature Beer
Kirkland Signature Beer 2014 2015 2024 KS Light Beer KS Craft Beer KS Lager Add Add Add Photo Photo Photo
Slide 55: Costco Online
Costco Online U.S. UK Canada Taiwan Mexico Korea Australia Japan China - Micro Site
Slide 56: E-Commerce
E-Commerce ● Complement the core warehouse ● Convenience of Big & Bulky ● Grocery Online ● Expanded selection year round ● Delivery + Installation available ● Same Day Delivery ● Expanded “Treasure Hunt”
Slide 57: Why Buy at Costco?
Why Buy at Costco? The price you SEE Is the price you PAY!
Slide 58: Mobile App
Mobile App ● Avg Rating 4.8, +100% ● Digital Membership Card ● Warehouse Inventory ● Receipts - Warehouse & Online ● Native Search ● Warehouse finder with hours and gas prices
Slide 59: Costco Next
Costco Next Get more of what you want with… Exclusive Members Only Values on an expanded selection of goods curated by our buyers, directly from brands that you trust Costconext.com or link out through Costco.com
Slide 60: Costco Next
Costco Next Site redesign launched Oct 16 ● Categories by brand ● Updated navigation ● Overall design improving user experience
Slide 61: Costco Next
Costco Next
Slide 62: Business Centers
Business Centers 26 U.S. Locations 6 Canada Locations - Walk in / delivery - eCommerce fulfillment – Online Dry Grocery
Slide 63: Business Centers
Business Centers Key Categories Office Food Service Corporate Offices Bakeries Law Offices Cafés & Delis Nonprofit Care Facilities Organizations Food Trucks Medical & Dental Restaurants Offices Cafeterias School Offices Convenience Store Concession Stands Volume Sales Distributors Gas Stations Groce
Slide 64: Pharmacy
Pharmacy 72M Prescriptions Filled Globally in FY’24 6464
Slide 65: Pharmacy
Pharmacy ● Prescription delivery by mail ● Same day delivery (RX and OTC) ● Pet prescription via mail ● Costco member prescription discount card ● Travel immunizations program ● RX pay ahead: pickup in pharmacy ● RX pickup locker expansion
Slide 66: Optical
Optical 8.9M Pairs of Glasses Sold Globally in FY’24
Slide 67: Optical
Optical ● Frames, Lenses, Contact Lenses and Sunglasses ● Eye exams available in or near most Costco locations ● Accept most vision insurance plans ● Lenses made in house at one of our four labs ● Large selection of brand-name designer frames - YSL - Hugo Boss - Lancel - Police - Vera Wang - Marc Ja
Slide 68: Hearing Aid
Hearing Aid 904K Units Sold Globally in FY’24
Slide 69: Food Court
Food Court 229M Hot Dog & Soda Combos Sold Globally in FY’24
Slide 70: Gasoline
Gasoline 8.1B Gallons of Fuel Sold Globally in FY’24
Slide 71: Global Kirkland Signature Fuel
Global Kirkland Signature Fuel ● Kirkland Signature fuel sold globally exceeds the quality requirements established by the North American Top Tier™ fuel program ● Costco fuel stations use the best available pollution control technology in their regions ● Globally, we saved our members $312M in FY’24
Slide 72: Citi Visa
Citi Visa Effective January 19, 2025 New 5% Cash Back Rewards on Gas at Costco All other reward categories remain the same
Slide 73: EV Charger Strategy
KIRKLAND Signatere— FUEL EV Charger Strategy !
Slide 74: Kirkland EV Charging Expansion
Kirkland EV Charging Expansion ● DC fast chargers for optimum member experience ● All Costco owned equipment ● Member value on charging purchases ● 90 warehouses will be equipped with charging station by year end Clermont, FL
Slide 75: Tire Center
Tire Center 11.4M Tires Sold Globally in FY’24
Slide 76: Tire Center
Tire Center ● Michelin - Bridgestone Premium Tires ● Tire Installation and services by certified technicians ● Expanded member value - Tire prices include -Installation -Balance -Nitrogen Inflation -Road Hazard Warranty ● Life of Tire Maintenance Services -Rotation -Tire Repair
Slide 77: Costco Travel
Costco Travel Cruises Rentals Vacation Packages Hotels
Slide 78: Vacation of a lifetime
Vacation of a lifetime 150 nights on Azamara Onward $290K Cruise Ft. Lauderdale - Barcelona Spain Included: ● 2 Adults ● Club World Owner’s Suite ● $13,000 On-Board Credit ● Ports of Call Included: ○ Easter Island, Chile (Maiden call) ○ Galapagos, Ecuador ○ Machu Picchu, Peru ○ Palau, Oceania Total
Slide 79: American Customer Satisfaction Index
American Customer Satisfaction Index 2019 2020 2021 2022 2023 2024 Costco 83% 81% 81% 82% 82% 85% Sam’s 81 79 78 81 79 83 Trader Joe’s 84 84 85 84 84 84 Wegmans 84 82 81 80 80 82 Lowe’s 78 75 75 78 78 79 Target 78 76 78 78 79 82 Home Depot 78 75 76 78 78 80 Average 81% 79% 79% 80% 80% 82% Walmart 71
Slide 80: Our People
Our People ● Good jobs / wages / benefits ● Careers - available to all ● Promote from within ● Everyone is included ● This is a “good business”
Slide 81: Fantastic Employees
Fantastic Employees • 322,000 employees worldwide – 94% benefits eligible in the U.S. (97% enrolled) • Highly compensated – >$30 U.S. average hourly wage • Low turnover – 9% in the U.S. after 1 year
Slide 82: American Opportunity Index
THE AMERICAN OPPORTUNITY as EMPLOYER FCA CHOICE C3) Hiring How well Costco hires people without degrees and those with little experience kkk American Opportunity Index Costco is a Top 25 company. Costco is a top employer on this year’s Index because it creates opportunity for employees to #2 #4 +7 f
Slide 83: Warehouse Manager Profile
Warehouse Manager Profile 897 Managers started as: Warehouse Manager 1% Asst. Warehouse Manager 2% Other Manager 10% Hourly staff 87%
Slide 84: College Graduates Worldwide In 2024
College Graduates 802 Graduates Worldwide In 2024
Slide 85: Charitable Contributions
Charitable Contributions Target is 1% of prior year’s pretax profit FY’21 $52M FY’22 $65M FY’23 $75M FY’24 $84M
Slide 86: Quality
Quality ● People ● Facilities ● Merchandise ● Management Team Never complacent!
Slide 87: Sustainability
Sustainability
Slide 88: Sustainability Commitment
Sustainability Commitment Doing the right thing for our community and world Updated December 2024 Available to view on costco.com
Slide 89: Sustainability Commitment
Sustainability Commitment Four pillars: – People & Communities – supporting the people impacted by our business – Operations - maintaining efficiencies in an environmentally responsible manner – Merchandising - strategically sourcing merchandise in a sustainable manner – Climate Action Plan – doing
Slide 90: Sustainability Commitment: Communities
Sustainability Commitment Communities • 1% of prior year’s pretax profit donated, over $84M in FY’24 • United Way, Red Cross, Children’s Hospital • Black Economic Development fund - $25M investment • Feeding America - $8.5M in cash grants and 138M pounds of food and other products donated in FY’24 •
Slide 91: Sustainability Commitment: Operations
Sustainability Commitment Operations • Remain efficient, low-cost operators • Expanding our “STAR” program globally to help us: – Remain in Compliance with regulations – Reduce Water Usage – Reduce Energy Usage – Reduce Waste – Reduce Emissions
Slide 92: Sustainability Commitment: Merchandise
Sustainability Commitment Merchandise • The 6 Questions we ask our suppliers: – Can you map your supply chain? – How are the people treated? – How are the animals treated? – How is nature/biodiversity treated – with focus on water, forestry, and fisheries? – Is the best possible packaging being used
Slide 93: Financial Position (MM's)
Financial Position (MM’s) Q1, FY’25 Cash, Equiv, & Short-Term Inv. $10,907 Property & Equipment (net) $29,336 Long-Term Debt $5,745 Stockholders’ Equity $24,451
Slide 94: Dividends
Dividends • Initiated May 2004 at $0.40 per year • Currently at $4.64 per year • Growth Rate 13% per year • >$2.0B annually • Five special dividends in the last 12 years • ~$19.5B to date
Slide 95: Stock Repurchase
Stock Repurchase as of FY’24 End • Program inception – Fiscal Year 2005 • $11.5B total expenditure • 135.8 million shares retired • $84.77 average cost per share • $698MM in FY’24 (avg $695.29/share)
Slide 96: Company Annual Growth
Company Annual Growth (Dec ’85 through FY’24) Net Sales 12.0% Net Income 13.3% Stock Price 18.0% S & P 500 9.2%
Slide 97: Costco Code of Ethics
Costco Code of Ethics • Obey the law • Take care of our members • Take care of our employees • Respect our suppliers • Reward our shareholders
Slide 98: Our Future
Our Future • Maintain core values and culture • Continue to innovate • Warehouse expansion • Digital growth
Slide 99: Thank you Craig & Richard
Thank you Craig & Richard Craig Jelinek Richard Galanti 40 years 40 years
Slide 100: Annual Meeting of Shareholders January 23, 2025
Annual Meeting of Shareholders January 23, 2025
Slide 101: Slide 101
Slide 102: Annual Meeting of Shareholders January 23, 2025
Annual Meeting of Shareholders January 23, 2025
Costco Wholesale — Shareholder Meeting (January 2025) on 6ix