Costco's wholesale model is unique. Stores are only accessible to customers with a Costco membership. In exchange for this annual fee, customers have access to unbeatable prices and a reward certificate of up to 2% of annual spend.

Costco's objective is to raise the price of membership fees every 5 or 6 years. However, there had been no increase since 2017, as a result of consumer concerns about the impact of inflation on their purchasing power.

The price of the "Gold Star" program has therefore risen from $60 to $65. The price for "executive" members is rising from $120 to $130. In particular, it offers the 2% annual discount mentioned above, up to a limit of $1,250 (previously $1,000). Michael Schulman, Director of Investments at Running Point Capital, believes that this announcement should "give a boost to revenues and shares".

At the same time, Costco reported on its business. Net sales rose by 6.9% in the first 44 weeks of its fiscal year to $210.5 bn, compared with $196.9 bn in the same period last year. E-commerce showed the strongest acceleration, with an increase of 15.2% over the period. The company notes that the month of June was particularly favorable.

These good results are in line with what Costco has demonstrated in the past. Revenue and margin growth are steady. Over the past decade, between 2013 and 2023, sales have increased by a factor of 2.2, while operating profitability has risen by around 50 points to 3.4%. These margins are admittedly low, but that's Costco's business model. In fact, the chain offers products priced at a maximum mark-up of 14% over cost. That's twice as low as Walmart. However, there have been no margin incidents in recent years, as the group manages its supplies, costs and business model to perfection.

As for the balance sheet, it's worth emphasizing the solidity of the whole. Cash flow is in excess of $4 billion, well supported by strong cash generation. The conversion of net income into free cash flow has regularly exceeded 100% in recent years, which is prodigious.

A long-term investor will see Costco as a very high-quality company. And as is often the case, especially these days when valuations can reach high levels, Costco trades at large multiples. The P/E is close to 55 times.