The FCF Institute team had an informative conversation with Costco Wholesale’s Financial Planning and Investor Relations AVP, Josh Dahmen, about the company’s free cash flow performance.
As a key holding in our US Defensive Equity Strategy, Costco is one of the largest companies in the retail industry with its unique business model and competitive edge.
Here are some key takeaways from our meeting:
1. The company’s robust business model and efficient cash management strategies have resulted in a solid balance sheet and minimal risk.
2. One of the main drivers of their free cash flow performance is the continued expansion of their membership base and strong sales growth.
3. The company’s commitment to maintaining a low-cost, high-value proposition for their customers contributes to their consistent financial performance.
Costco is one of the best Food and Staples Retail companies in our Free Cash Flow Quality Model #FCFQM, an alpha model to identify a company with strong and sustainable profitability that could potentially generate consistent excess returns.
