Costco’s most recent yearly report indicates that nearly one-third of its annual revenue comes from California, with the United States contributing to over 70% of total sales. The report points out that California, often referred to as the Golden State, has more high-volume warehouses compared to other US markets. Costco acknowledges the significance of this, noting that any significant downturn in these operations could have a pronounced impact on the company’s overall performance.
However, this doesn’t mean that investors should be unduly alarmed about the company’s geographical focus. Costco’s impressive success lies in its significant presence in one of America’s fastest-growing regions. That said, investors should definitely factor in Costco’s reliance on California when evaluating the company’s overall performance.
Explore more about Costco’s concentration risk at The Motley Fool.
Courtesy Photo: Michael Ocampo
