Target Corporation (TGT), Dollar Tree, Inc. (DLTR), Costco Wholesale Corporation (COST): Three Retailers on Paths to Growth

Increasing membership and warehouse expansion

Costco Wholesale Corporation (NASDAQ:COST) runs its business by charging membership fees to customers in exchange for offering them heavy discounts on selected brands of a wide range of merchandise. It offers three types of membership: Executive, Business, and Gold Star. Around 1.6 million new members joined Costco Wholesale Corporation (NASDAQ:COST) in the first two quarters of fiscal year 2013. In the third quarter ending May 2013, there was a rise of 19% year over year in new membership sign-ups. It provides merchandise at lower prices compared to its competitors, and regularly changes the brand of its products. Customers are more attracted, as they always find something new at Costco Wholesale Corporation (NASDAQ:COST) stores. These strategies are working as more customers are becoming members. An increase in the member base will drive the growth of membership-fee income, which is expected to rise $2.29 billion in fiscal year 2013, and $2.44 billion in fiscal year 2014, compared to $2.07 billion in 2012.

Costco Wholesale Corporation (NASDAQ:COST) is expanding its warehouse clubs worldwide. It has opened 19 warehouses in the third quarter of fiscal year 2013. With this expansion, the company now runs 627 warehouses worldwide. It is planning to open an additional nine warehouses in the U.S, Japan, the U.K, Taiwan and Australia by the end of fiscal year 2013. Costco Wholesale Corporation (NASDAQ:COST)’s international expansion will help it to boost sales. The company’s net sales will rise to $103.31 billion in fiscal year 2013 and $112.67 billion in 2014, compared to $97.06 billion last year.

Conclusion

Target Corporation (NYSE:TGT)’s expansion in Canada and REDCard business provide better prospects for future growth.

Dollar Tree, Inc. (NASDAQ:DLTR)‘s addition of freezers and coolers, alongside store expansion in both the U.S and Canada markets, will drive its revenue.

Costco Wholesale Corporation (NASDAQ:COST)’s increasing membership base and international store expansion will boost its sales.

All three of these stocks are a buy.

The article 3 Retailers on Paths to Growth originally appeared on Fool.com and is written by Shweta Dubey.

Shweta Dubey has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale. The Motley Fool owns shares of Costco Wholesale. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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