If You’d Invested $10,000 in Costco Stock 15 Years Ago, Here’s How Much You’d Have Today

Costco Wholesale (COST 0.19%) has long remained one of the most successful retailers in the US and much of the world. However, this did not make the company invulnerable 15 years ago during the financial crisis.

At that point, its rapid growth briefly turned negative as consumers held back unnecessary spending. However, it was also a retailer that quickly recovered as the crisis receded. In addition, the improvements led to massive gains for the retail stock as its expansion continued.

Costco’s earnings over 15 years

In August 2009, a $10,000 investment would have bought 206 shares at about $48.50 per share. Today, at just over $881 per share, that investment would be worth just over $180,000. Also, if you factor in the total return, which includes dividends, an investor would have more than $250,000.

As previously mentioned, despite its recession-proof business, Costco has not escaped the effects of the financial crisis. In fiscal 2009 (ended August 30, 2009), its net sales of $70 billion were down nearly 2% from last year’s level. That was quite a turnaround considering the 13% increase in net sales in 2008.

Still, disciplined investors saw opportunity as the downturn drove Costco’s price-to-earnings ratio to just 19 times earnings, well below today’s 54-earnings multiple.

Moreover, the decline in net sales in 2009 became an anomaly as net sales grew by 9% in fiscal year 2010 and by 14% in fiscal year 2011. Such growth rates triggered a steady increase in the share price that continues until at present.

Lessons for today

Of course, Costco’s success is probably more than the stock price today. At the aforementioned 54 times earnings, investors may be hesitant to pay such a price when net sales rose just 7% in the first three quarters of fiscal 2024 (ended May 12).

However, the state of Costco in 2009 is a reminder of how buying opportunities in high-quality companies can arise in difficult economic times. Knowing this, you should learn to put negative feelings aside and start accumulating top stocks during such periods.