Quote:
Originally Posted by NJBest
Aren't you forgetting the fact that they have 3.4 billion shares outstanding at $69 each?
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Just checked their debt ratio. You are correct. Apologies.
They're beating down suppliers, monopolizing the American medium and small markets, underpaying employees, and STILL have a high debt ratio.
They should strive to be more like CostCo.
http://www.nytimes.com/2005/07/17/bu...anted=all&_r=0
But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.
Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
"Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.
Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."
High wages don
"Downsizing, lower pay, reduced benefits — that seems to be the same story at one company after another, as if the sole point of business were to pull in one massive quarterly profit.
But then there’s our number of the day: $19.50."
"Some Wall Street analysts haven’t been happy about that or about the company’s generous health plan. No doubt, Costco could be making a higher profit. And yet, the company does just fine. The value of Costco stock has more than doubled since 2009, and the company’s founder, James Sinegal, said those wages buy the company a low rate of employee turnover and theft."
The High Cost of Low Wages - Harvard Business Review
"Consider Costco and Wal-Mart’s Sam’s Club, which compete fiercely on low-price merchandise. Among warehouse retailers, Costco—with 338 stores and 67,600 full-time employees in the United States—is number one, accounting for about 50% of the market. Sam’s Club—with 551 stores and 110,200 employees in the United States—is number two, with about 40% of the market.
Though the businesses are direct competitors and quite similar overall, a remarkable disparity shows up in their wage and benefits structures. The average wage at Costco is $17 an hour. Wal-Mart does not break out the pay of its Sam’s Club workers, but a full-time worker at Wal-Mart makes $10.11 an hour on average, and a variety of sources suggest that Sam’s Club’s pay scale is similar to Wal-Mart’s. A 2005 New York Times article by Steven Greenhouse reported that at $17 an hour, Costco’s average pay is 72% higher than Sam’s Club’s ($9.86 an hour)."
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