In 2020, RBC released a research paper estimating COST could grow its US store base by over 400 units. The population size, density, and median income of many regions of the US are still under-penetrated by Costco. At the 15 year average of ~13 US stores added per year, this gives COST another ~30-years of growth.

But what about International growth?

This is arguably the larger opportunity and it’s proving to be more profitable on an EBIT basis.

Source: COST Filings, IP
Source: COST Filings, IP

We recently published two interviews with former Costco executives, who each spent over 30 years at COST, to discuss the international growth opportunity. One of the executives was responsible for scouting new markets, opening multiple APAC countries and more recently worked for Sam's in China.

The major takeaway is that Costco has an incredible international opportunity, especially in China.

In this analysis, we explore the potential store count ex-US over the next 20 years and analyse why international EBIT margins are structurally higher than the US.

Costco is very conservative by nature. It took the management over 20 years to finally enter China:

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