Why Costco was selected as Yahoo Finance’s Company of the Year

Editor-at-Large Brian Sozzi explains why Costco was named Yahoo Finance's 2022 Company of the Year.

Video transcript

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AKIKO FUJITA: Well, it is time for today's Trending Ticker, and today we're taking a look at Costco. It has, of course, been crowned Yahoo Finance's Company of the Year. That stock, though, down about 1.3% today. Our very own Brian Sozzi sat down with Costco CEO Craig Jelinek to reflect on the past year and what's led to Costco's strength in the face of inflation.

CRAIG JELINEK: We believe we're the low price leader. Our markup's about 13%. So we-- every-- any rebate money we get, we pass right on to the consumer. We're a top line company. We drive sales. We're not a margin company.

AKIKO FUJITA: And joining us now with more, we've got Yahoo Finance's Brian Sozzi. Brian, I know you went out to Washington State to sit down with Craig, but let's talk a bit about why exactly Costco is the Company of the Year. A lot of people are going to say, well, look, it's been a down year. Costco stock is still down. What warrants the big title?

BRIAN SOZZI: Well, I really just went there for the Costco hot dow-- hot dog, Akiko, the legendary hot dog. And then secondarily, I mean, it's the Company of the Year because Meta had a terrible year. But no, look, Costco, they outperform, relatively speaking, from a stock price perspective. Second, this is a company, in a year of massive inflation are hitting many households, sending consumers away from grocery stores-- this is a company that absolutely thrived.

Sales, same-store sales on a monthly basis, pretty much double digit gains every single month. The company's margins hung in there. They grew memberships, the number of people that have Costco memberships, significantly. They're going to probably open over 20 stores over the next-- or they probably will have opened 20 stores over the past 12 months. It has been a beast of a year for this company. And as you would expect, given consumers are trading down in an inflationary environment, really, my hat's off to them.

RACHELLE AKUFFO: And Brian, also as we look at within the company in terms of satisfaction of people who work there, Costco really did seem to be ahead of the game when it came to salary and compensation. How much did that factor into this decision?

BRIAN SOZZI: Well, Costco has long been known for paying some of the best wages in all of retail-- in some cases, over $20 a pop if you are a cashier. And then also as well, some of the best health care compensation-- Craig talking to me a little bit about that in another part of the interview. And as a result, I went into the back of this particular Costco store just to see what was going on in terms of inventory.

But in the back of the Costco store, in the employee break room, you see a board just showing how long some employees have been with this company-- 20 25, 30 years. You look at Craig Jelinek, he started the company, I believe, in 1984. The comp-- his potential successor, Ron Vachris, started the company in the early '90s. The CFO, Ron Galanti-- Richard Galanti, he started at the company in the early '80s. He actually led the series A funding for Costco. I mean, this is a company that is known for promoting from within and treating its employees very well. That's why you have people going from stocking the floors essentially to the C-suite.