Equity Clock

Arithmetic Average Seasonal Chart

Geometric Average Seasonal Chart

COST Relative to the S&P 500

COST Relative to the Sector

% of Revenue Generated in Each Quarter

% of Free Cash Flow Generated in Each Quarter

% of Net Income Generated in Each Quarter

Seasonal Chart Analysis

Analysis of the Costco Wholesale Corp. (NASD:COST) seasonal charts above shows that a Buy Date of August 25 and a Sell Date of November 23 has resulted in a geometric average return of 5.77% above the benchmark rate of the S&P 500 Total Return Index over the past 20 years. This seasonal timeframe has shown positive results compared to the benchmark in 19 of those periods. This is an excellent rate of success, but the return underperforms the relative buy-and-hold performance of the stock over the past 20 years by an average of 1.32% per year.

The seasonal timeframe is Inline with the period of seasonal strength for the Consumer Staples sector, which runs from April 25 to November 23. The seasonal chart for the broad sector is available via the following link: Consumer Staples Sector Seasonal Chart.

Costco operates a membership-based, no-frills retail model, predicated on offering a select product assortment in bulk quantities at bargain prices. The firm avoids maintaining costly product displays by keeping inventory on pallets and limits distribution expenses by storing its inventory at point of sale in the warehouse. Given Costco’s frugal cost structure, the firm is able to price its merchandise below competing retailers, driving high sales volume per warehouse and allowing the retailer to generate strong profits on thin margins. Costco operates over 600 warehouses in the United States and boasts over 60% market share in the domestic warehouse club industry. Internationally, Costco operates another 270 warehouses, primarily in markets such as Canada, Mexico, Japan, and the UK.

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Stocks mentioned in this post: COST