Institutional Ownership Hits 68.5% as Costco Execs Sell 3,549 Shares
Barlow Wealth raised its stake in Costco by 2.2% to 34,452 shares worth $32.5 million in Q3, while Vanguard, State Street, Geode and Invesco also increased holdings, bringing institutional ownership to 68.5%. Two executive vice presidents sold 3,549 shares at average prices between $867 and $916, and a class-action lawsuit alleges the popular Kirkland rotisserie chicken contains added preservatives contrary to its “no preservatives” claims.
1. Costco Delivers Robust First-Quarter Results
In its fiscal first quarter, Costco reported net sales of $66 billion, representing an 8.2% year-over-year increase. Comparable-store sales rose 6.4% after adjusting for fuel and currency fluctuations, while digitally enabled comparable sales jumped 20.5%. Membership fee income climbed 14%, driven by both fee increases and continued growth in the membership base. These results mark the seventh consecutive quarter of double-digit digital growth and underscore the resilience of Costco’s high-volume, low-margin model.
2. Cash-Rich Balance Sheet and Expansion Strategy Support Future Growth
Costco maintains a conservative capital structure, with minimal long-term debt and significant cash reserves, enabling sustained investment in growth initiatives. The company operates 921 warehouses worldwide and plans to open 28 net new locations this fiscal year, targeting an eventual pace of 30 or more annual openings. New stores opened in fiscal 2025 generated average annualized net sales of $192 million, up 28% from those opened two years prior, reflecting management’s refined site-selection and rollout process.
3. Strong Institutional Backing and Insider Activity
Institutional investors hold over two-thirds of Costco’s shares. Notably, Vanguard Group increased its stake by 1.7% to 43.4 million shares, while State Street and Geode Capital also raised positions. Barlow Wealth Partners holds 34,452 shares, representing 3.6% of its portfolio and valued at $32.5 million. On the insider front, two executive vice presidents reduced their holdings by 16.0% (2,049 shares) and 15.4% (1,500 shares) respectively, with insiders selling 9,315 shares totaling $8.55 million over the past 90 days. Corporate insiders now own approximately 0.10% of the company.
4. Class-Action Lawsuit Challenges 'No Preservatives' Claims
A class-action lawsuit filed in the Southern District of California accuses Costco of misrepresenting its Kirkland Signature Seasoned Rotisserie Chicken as free of preservatives. Plaintiffs allege the product contains sodium phosphate and carrageenan, which function as added preservatives. The suit argues that on-shelf and online 'No Preservatives' signage creates a misleading impression, and that any ingredient disclosures are relegated to small print. If successful, the litigation could expose Costco to reputational damage and potential financial liabilities.