In the past 30 years, shares of Costco (COST +1.12%) have generated a total return of 16,810% (as of Jan. 9). If you invested $6,000 in this retail stock in January 1996, you'd have $1 million sitting in your brokerage account right now. This has truly been a millionaire-making business.
These days, Costco is a giant company with a market cap of $411 billion. And it reported $270 billion in fiscal 2025 (ended Aug. 31) net sales. From the current point, can this business help you become a millionaire over the long term?
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Costco is a wonderful company
One of Costco's best traits is that its warehouse stores experience durable demand. Quality merchandise in a broad range of categories sold at low prices has all-weather appeal. In both good and bad economic times, Costco has proven that it can grow its revenue and earnings. Not every company is fortunate to always be operating from a position of strength.
It helps that the business charges annual membership fees to shoppers, which drives customer loyalty. In the U.S. and Canada, the membership renewal rate was 92.2% in Q1 2026 (ended Nov. 23). Total paid memberships increased 5.2% year over year to 81.4 million in the quarter. In the future, management plans to get to a yearly run rate of 30 net new store openings, showcasing the expansion runway that they still see, despite Costco's massive size.
That scale is precisely what protects the company's competitive position in a crowded retail landscape. Costco has built up bargaining power with its suppliers. The result is lower costs for merchandise, and these savings benefit shoppers at checkout. Looking out over the next 30 years, it's safe to assume that the business will still be relevant and thriving.
NASDAQ: COST
Key Data Points
Investors should temper expectations
Even though this stock is 14% below its peak, it's not exactly selling at a discount. Investors have to buy shares at a price-to-earnings ratio of 49.5. That's too steep of a valuation to pay.
Costco is such a great business that it deserves to keep the attention of interested investors, who should wait for a pullback before scooping up the stock. If you did buy today, though, I think there's a low probability that you'd beat the market over the next five or 10 years.
And for those investors who are looking for a millionaire-maker opportunity, it's best to temper expectations. Costco is much more mature today than it was 30 years ago. The best growth days are in the past.
