On Dec. 5, 1985, two-year-old retail company Costco Wholesale (COST +0.21%) went public at $10 a share. In its first earnings report filed the following January, it announced sales of $134.5 million.
The report was staggering for two reasons: first, because the fledgling retailer had almost tripled sales while turning profitable over the last year, and second, because the report only included the quarter up to Nov. 24.
Forty years later, Costco's latest earnings report for Q1 2026 revealed net sales of $65.98 billion, up 8.2% year over year. The company now boasts 921 warehouses worldwide, including recently opened ones in Spain and France, and plans to open 28 new stores in fiscal year 2026, a significant number, considering that its newly opened stores generated an average $192 million in sales last year.
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At a time when brick-and-mortar retailers are struggling, with Kohl's and Macy's closing dozens of stores between them while some well-known brands declared bankruptcy, Costco is confidently raising prices and thriving. Last year, it raised its membership fee from $60 to $65, and has grown its membership base by 5.2% year over year, to 81.4 million total paid members, with a renewal rate of 92.2% in U.S. and Canada stores.
Costco has cultivated this customer loyalty through decades of commitment to its core philosophy of charging no more than its own cost, plus a 14% margin, or private labels sold for a 15% gross margin. Costco's commitment to low prices even extends to its member-only deal of a $1.50 hot dog combo special, which has been in place since 1985.
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Costco's reputation for unwavering commitment to securing low prices for customers even attracted the attention of Warren Buffett's partner at Berkshire Hathaway, the late Charlie Munger, who remarked that he wished everything in America worked as well as Costco did. He became Costco's second-largest shareholder, never selling a single share.
However, Munger was unable to talk Buffett out of selling. In the third quarter of 2020, Berkshire dumped its 4.3 million shares of Costco, valued at $1.3 billion in June 2020. Within months, Buffett admitted that the sale was "probably a mistake."
It looks like even more of a mistake with the benefit of hindsight. Over the last five years, Costco shares have rallied by 138%, and those 4.3 million shares would be worth around $3.66 billion. The company has also ramped up its dividend by 85% since Berkshire sold its shares, as part of a streak of annual dividend hikes that now stands at 21 years and counting.
The company has also recently returned value to shareholders through its aggressive share buyback program. Authorized in January 2023 at up to $4 billion, Costco repurchased $2.18 billion of common stock in the 2025 fiscal year, in addition to spending hundreds of millions of dollars on share repurchases in the 2024 fiscal year.
Share buybacks are inherently shareholder-friendly, as they increase the value of investors' shares as a percentage of the company by reducing the outstanding share count. They can also make dividend growth easier, because a reduced share count allows a company to pay more money through dividends to fewer shares.
So, how much would $100 invested in Costco's IPO be worth today?
Although Costco's IPO price was $10 per share, when you adjust for stock splits in the 40 years since, its initial price per share was approximately $1.67. That's a 50,858% increase that would turn every $100 invested into $86,058.
Of course, for longtime shareholders, there are dividends to consider. Costco paid its first dividend in 2004, paying out $0.10 per share. Because the company hasn't had a stock split since, anyone who initially bought $100 worth of Costco shares at the IPO would now be collecting $1,329 in income from dividends each year.
From its immense capital appreciation to its dividend that now pays 13x an initial investment, Costco's astonishing rise shows the power of a valuable brand that connects with millions of consumers and compounds over decades.
