7 Best Department Store Stocks to Buy Now

3. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 75

Costco Wholesale Corporation (NASDAQ:COST) operates membership-only big box warehouse club stores, and is one of the most popular department stores in the US. It offers an extensive collection to its customers, including furniture, electronics, clothing, consumables, and much more. The company is expanding its operations, recently opening a new store in Maine and consolidating its presence in 47 US states. It attained its target of opening 30 new warehouses in fiscal 2024. It is also expanding its presence internationally, and has plans to take on 12 of its 29 planned openings outside the US.

Apart from its expansion strategy, the company is improving its member experience by boosting delivery times, streamlining merchandise assortment, and scheduling functionality. It reported membership fee income of $1.512 billion, reflecting a growth of $3 million on one less week year-over-year.

Costco Wholesale Corp’s (NASDAQ:COST) renewal rate in the US and Canada was down one-tenth of a percent in fiscal Q4 2024 compared to fiscal Q3 end. It stood at 92.9% and underwent this slight decrease due to the effect of the online membership promotion that the company ran in fiscal year 2023 for a short while.

However, improvement in the worldwide membership renewal rate offset the decrease in the US. The company ended fiscal Q4 2024 with around 76.2 million paid household members and 136.8 million cardholders. These numbers reflect a year-over-year increase of 7.3% and 7%, respectively. Costco Wholesale Corporation (NASDAQ:COST) takes the third spot on our list of the 7 best department store stocks to buy now.

Madison Sustainable Equity Fund stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2024 investor letter:

“Costco Wholesale Corporation (NASDAQ:COST) continues to demonstrate its commitment to sustainability by lowering its emissions. For example, it has converted its Kirkland Signature laundry packs from plastic tubs to a pouch. This has reduced plastic packaging by 80%. It has also moved to localize production of bulky items such as water, paper, and laundry detergents. Manufacturing these goods closer to the countries in which they are sold reduces emissions associated with shipping.”