"Why Costco investors are smiling" from WSJ

Following Costco's annual shareholder meeting, investors left happy despite difficult economic times and a weak retail environment. Costco managed to escape the downturn spiral facing most retailers with a 4% increase in quarterly revenues at the end of 2008 and even a 1% increase in same-store sales. If you were an investor 5 years ago, you're seeing a 63% return today. Beyond the earnings, shareholders smiled at all the free samples provided by their favorite warehouse.

Costco was able to show the crowd the popularity of Costco overseas, noting the long lines in Japanese stores last winter. Costco's busiest store is located in Korea, an attractive and prosperous 'emerging' market. CEO Jim Sinegal is eager to take market share from other discount retailers, now facing bankruptcy, and grow new divisions especially in Costco's successful private label. Sinegal stated, "great companies prosper during tough times" and remains optimistic for new store growth in 2010.

The 73 year old CEO was not grilled on the financial position of his company, the shareholders remained content with simple responses on product mix and new stores. Sinegal has his work cut out for him, but he seems to have successfully navigated his aging company through these troubled times and remembered the most important thing in the retail business: your customers.