Prediction: Costco Will Join the $1 Trillion Club by 2033

Here is a prediction I feel good about: Costco Wholesale (NASDAQ: COST) will join the $1 trillion club by 2033. The warehouse retailer is worth roughly $417 billion today, so to reach a 13-figure market cap, it will need to grow by just about 140%. That may sound ambitious for a company that sells rotisserie chickens and bulk packages of paper towels, but Costco has one of the most reliable growth machines in all of retail, and the math is more achievable than you might think.The secret to Costco is that it barely makes a profit at the register from selling groceries and household goods. It makes its profits from selling memberships. The company now counts more than 40 million paid household memberships, with over 82 million cardholders in total, and a renewal rate above 92%, meaning almost everyone who joins stays. Membership fee income, which is nearly pure profit, keeps climbing, helped by a recent fee increase. That sticky recurring revenue is the closest thing retail has to a subscription business, and it is remarkably durable in any type of economy.Image source: Getty Images.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool