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Costco Wholesale (NASDAQ: COST) and Amazon (NASDAQ: AMZN) are leaders in retail, each employing a subscription model to boost sales and customer loyalty. As of 2023, Costco has 128 million members globally, with a 91% renewal rate, while Amazon Prime boasts over 200 million subscribers and a 99% renewal rate in the U.S.
Costco’s market cap stands at $390 billion, making it the third-largest retailer worldwide, with 879 warehouses across 14 countries. Over the past five years, Costco’s revenue and operating income have increased by 59% and 71%, respectively, while free cash flow surged by 121%. In contrast, Amazon’s annual revenue and operating income grew by 105% and 153% over the same period.
In Q1 2024, Costco experienced a 21% year-over-year increase in e-commerce sales, outperforming Amazon’s retail growth. Despite the differing business models, both companies are anticipated to provide reliable long-term growth, making them compelling options for investors depending on their risk tolerance and investment strategy.
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