Does the Secret to Costco's Success Make the Stock a No-Brainer Buy?
Over the past five years, Costco (NASDAQ: COST) shares have climbed 159%, easily crushing both the S 500 and the Nasdaq Composite Index. Strong revenue and earnings growth, which have admittedly slowed recently, have been key to the stock's impressive returns.
Costco is well known for relentlessly focusing on providing the lowest prices to its customers in an exceptional shopping environment. But let's take a closer look at the company's secret ingredient that has also contributed tremendously to its success. It just might make the top retail stock a no-brainer buy right now.
The retail sector is incredibly competitive, with businesses doing whatever they can to drive greater traffic and sales in an environment where customers have unlimited options to choose from. Costco stands out from the crowd because of its low prices -- the average markup on its products of 11% is far lower than other big-box retailers. This strategy has worked, as evidenced by the fact that Costco is the world's third-largest retailer.
Source Fool.com
