Costco Wholesale (COST) stock remains one of Jim Cramer’s favorite long-term holdings, and he doubled down on his bullish view this morning on CNBC.
He argued that COST’s shareholder-friendly capital return program, relentless focus on value, and willingness to pressure suppliers into keeping prices low create a powerful competitive advantage.
Cramer’s remarks come as Costco shares continue to benefit from strong traffic trends and recently redirected most of a $184 million tariff-refund windfall back to customers through lower prices.
Why Cramer remains bullish on Costco stock
Cramer highlighted a feature that has repeatedly distinguished Costco from many large retailers – its willingness to reward investors through special dividends.
He noted that the warehouse giant periodically distributes large one-time payouts in addition to its regular dividend, calling it evidence of the company’s loyalty to shareholders.
The CNBC host also pointed to COST’s history of aggressive buybacks and “disciplined” capital allocation.
In his view, management has consistently demonstrated that excess cash is returned to owners rather than being spent on questionable expansion projects.
That approach has helped COST stock build credibility with investors over decades.
For long-term shareholders, the combination of steady membership-fee growth, recurring cash flow, and occasional special dividends creates an attractive total-return profile.
Cramer’s broader message was that Costco’s management team continues to operate with a clear focus on both customers and shareholders, a balance that few retailers consistently achieve.
COST has a pricing strategy rivals struggle to match
Perhaps the most important part of Cramer’s argument centered on Costco’s ability to hold down prices even when suppliers push for increases.
He described Costco and Walmart as rare retailers willing to challenge vendors directly rather than simply pass higher costs to consumers.
According to the former hedge fund manager, Costco’s powerful Kirkland Signature private-label portfolio gives it leverage in negotiations.
If branded manufacturers try to raise prices too aggressively, COST can often offer “competing” Kirkland products at significantly lower prices.
He pointed to the retailer’s private-label strategy as a key reason shoppers continue to view Costco as a destination for value.
That philosophy has been evident in recent months.
Costco disclosed that it received $184 million in tariff refunds during its fiscal fourth quarter, consisting of refunds and associated interest.
Rather than keeping the windfall as profit, management said most of the proceeds were used to lower prices on products ranging from produce, meat, and beverages to home furnishings and hardware.
COST shares are a play against inflation
Cramer ultimately framed Costco stock as more than just a retail name.
In his words, the company “has a plan to help America save money,” a strategy he believes becomes even more valuable when consumers remain focused on affordability.
That view aligns with Costco’s business model.
Unlike many retailers that depend heavily on merchandise markups, Costco generates a substantial portion of its profits from membership fees.
The structure allows management to prioritize volume and value, reinforcing customer loyalty and driving repeat visits.
Recent tariff-refund decisions reinforce that philosophy.
Management has repeatedly stated that the majority of future refunds will also be reinvested into member value rather than retained as earnings.
For investors, Cramer’s thesis is straightforward: Costco’s combination of pricing power, customer trust, private-label strength, and shareholder-friendly capital returns creates a competitive moat that remains difficult to replicate.
As long as the company keeps finding ways to lower costs for members while rewarding shareholders, he believes the stock remains a buy.
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