Charlie Munger, the vice chairman of the board of directors of the company, predicted Friday that big-box retailer Costco will eventually compete with Amazon as it expands its e-commerce business.
Charlie Munger is bullish on this retailer.
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Munger said at the Sohn conference that Costco will eventually be a huge internet player that can compete with giants like Amazon.
The 97-year-old thinks that Jeff Bezos may have more to fear from Costco in terms of retailing than the reverse.
Munger argues that the membership-only retail chain has an enormous purchasing power.
At the end of last year, Munger owned about 166,000 shares of the company, which was worth about $62 million at the time.
The reopening of the economy has led to a 40% jump in the shares of Costco so far in 2021.
One of the largest retailers in the world, with over 800 warehouse stores, has been investing a lot in its e-commerce business, and last year it acquired delivery service provider Innovel Solutions for $1 billion.
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During the Pandemic lockdowns last year, people were so busy they didn't have time to buy groceries. The retailer is seeing an increase in sales as people shop in physical stores again. The company reported $192 billion in revenue for the fiscal year ending in September 2021, up from $163 billion in 2020.
Forbes estimates that Munger is worth between $1 billion and $2 billion, with most of his fortune coming from his shares of class A stock. He was outed as a billionaire by Forbes in 1998.
The quote is crucial.
Despite the retail sector upheaval, the analyst expects consistent, strong performance from the company. He believes that the retailer has a main strength that is itspurchasing leverage and tremendous value. Akbari thinks that the business of Costco should be well positioned for decades to come.
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