The $100 That Became $86,058: How Costco Turned Four Decades Into a Wealth Machine

On December 5, 1985, Costco Wholesale [(NASDAQ: COST)] made its debut on the public market at just $10 per share. Nobody could have predicted what would unfold over the next 40 years—a transformation that would turn a modest $100 investment into approximately $86,058 today. When adjusted for stock splits across four decades, that initial $10 price per share actually represented about $1.67 in today’s equivalent terms, translating to a staggering 50,858% gain.

The Engine of Growth: A Loyalty Machine Unlike Any Other

Today’s Costco operates 921 warehouses worldwide and generated $65.98 billion in net sales for Q1 2026, a year-over-year increase of 8.2%. But these numbers alone don’t capture what makes this company remarkable in an era when traditional retail is collapsing. Kohl’s and Macy’s have shuttered dozens of locations while some retail giants declared bankruptcy, yet Costco continues raising membership fees and expanding confidently.

The secret lies in an almost religious philosophy: charge members no more than cost plus a 14% margin, or 15% for private labels. This commitment runs so deep that Costco’s famous $1.50 hot dog combo has remained unchanged since 1985—despite inflation that would suggest otherwise. Last year, when the company raised membership fees from $60 to $65, it still managed to grow its membership base by 5.2% year-over-year, reaching 81.4 million paid members with a renewal rate of 92.2% in U.S. and Canada stores.

This customer loyalty translated into aggressive expansion. Costco opened 28 new stores in fiscal year 2026, with newly opened warehouses averaging $192 million in sales each. The company has also expanded internationally, with recent openings in Spain and France.

The Value That Even Warren Buffett Missed

The company’s unwavering commitment to consumer value caught the attention of Charlie Munger, legendary partner at Berkshire Hathaway. Munger famously remarked that he wished everything in America worked as well as Costco did. He became the company’s second-largest shareholder and never sold a single share—but Buffett couldn’t be convinced to hold on.

In Q3 2020, Berkshire Hathaway divested its 4.3 million Costco shares, valued at $1.3 billion at that time. Within months, Buffett admitted the sale was “probably a mistake.” With today’s perspective, it looks far worse. Over the past five years alone, Costco shares have climbed 138%. Those 4.3 million shares Berkshire sold would now be worth approximately $3.66 billion—a $2.36 billion difference that speaks volumes about the company’s staying power.

Dividends: The Silent Wealth Builder

For long-term shareholders, the story gets even better. Costco initiated its dividend program in 2004 with a modest $0.10 per share payout. Today, anyone who purchased $100 worth of shares at the original IPO would collect approximately $1,329 in annual dividend income—a 13x multiplier on the initial investment before considering capital appreciation.

The company has maintained 21 consecutive years of annual dividend increases and shows no signs of slowing down. Beyond dividends, Costco has returned shareholder value through an aggressive buyback program. Authorized in January 2023 for up to $4 billion, the company repurchased $2.18 billion of common stock in fiscal year 2025, with additional hundreds of millions spent in 2024. These buybacks reduce share count, which mathematically increases each remaining shareholder’s ownership percentage and supports future dividend growth.

The Real Lesson: Quality Compounds

The story of Costco from its $134.5 million in first-year sales (announced in January 1986, covering just the quarter through November 24) to its modern $65.98 billion quarterly revenue represents more than just business growth—it illustrates the exponential power of a resilient brand, customer alignment, and disciplined capital allocation over decades.

That original $100 investment becoming $86,058 in capital gains, plus $1,329 in annual dividend income, demonstrates why investors often overlook simple, boring, consistent businesses in favor of flashier opportunities. Sometimes the best investments are those that keep their promises to customers for 40 years straight.