Retail Giants Walmart and Costco Surge Amid Sales Growth

Retail sales remain robust in 2024 with Walmart and Costco posting strong market share gains. These giants saw substantial stock price increases, outperforming the S&P 500. Their e-commerce improvements and competitive advantages bode well for future growth.

Date: 25-03-2025

AI Rating: 7

Earnings Per Share (EPS): The report mentions that Amazon's earnings per share are projected to climb 15% this year, compared to 9% for Costco and 5% for Walmart. This indicates that Amazon is experiencing faster earnings growth than its primary competitors.

Operating Margins: Amazon's North American segment showed an operating margin increase to 6.4% in 2024, up from 4.2% in 2023 and negative 0.9% in 2022. In comparison, Walmart's operating margin stands at 5.2%, while Costco's sits at 3.7%. This trend suggests that Amazon is improving its profitability more significantly than its rivals.

Revenue Growth: The text highlights that both Walmart and Costco achieved over 20% growth in U.S. e-commerce sales year over year, contributing to their same-store sales growth. Amazon's third-party seller services and online store sales grew at slower rates (8% and 9%, respectively), although it still increased its share in the e-commerce sector.

While Walmart and Costco's sales growth is notable, Amazon remains the market leader and is also augmenting its profitability through its retail media advertising business, which grew 18% to $17.3 billion in the last quarter. This strong growth in Amazon's ad sales is particularly essential as it has high margins and is becoming a larger percentage of total revenue.

Investors should note that while Walmart and Costco are performing well, Amazon's combinations of profitability improvements, e-commerce strategies, and additional revenue streams from AWS and advertising make it an attractive investment in comparison.

Stocks: WMT COST AMZN