Costco Wholesale Corporation (NASDAQ:COST) and Dollar Tree Inc. (NASDAQ: DLTR) are two stocks in the retail sector that are recession-resistant and are a good inclusion in any portfolio. Let’s have a look at those two companies in more detail.

Costco Wholesale Corporation 

Costco, based in Issaquah, Washington, operates membership warehouses in the United States, Puerto Rico, Canada, United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. The company has over 800 member warehouses around the world and operates e-commerce websites worldwide.

Net sales for the second quarter increased 16.1% to $50.94 billion from $43.89 billion last year. Net sales for the first 24 weeks rose 16.4% to $100.35 billion from $86.23 billion last year.

Net income for the quarter was $1,299 million, or $2.92 per diluted share, compared to $951 million, or $2.14 per diluted share, in the same quarter last year.

Inflation works more in favor of Costco than against it. Rising prices mean more households will purchase subscriptions (which rise in price with inflation) and shop more at the company’s warehouses.

Costco shares are trading today above where they were before earnings. Performing in good times and bad, Costco is a great addition to your stock portfolio.

Dollar Tree

Headquartered in Chesapeake, Virginia, Dollar Tree operates a variety of discount retail stores through two segments: Dollar Tree and Family Dollar.

Up 20% year-to-date, Dollar Tree investors are flocking in as high inflation pushes households to seek cheaper substitutes for life’s necessities.

That’s exactly what Dollar Tree offers in its more than 8,000 stores in the United States and Canada. A supplier of food and other daily necessities as well as other common household items, the company helps consumers cope with the declining purchasing power of the dollar.

All this while improving its margins, thanks to efforts such as raising prices at its Dollar Tree stores (from $1 to $1.25 per item). For the year, Dollar Tree reported earnings of $5.80 per share on sales of $26.3 billion, compared to estimates of earnings of $5.57 per share and sales of $26.4 billion.

Reasonably priced (at 20 times forward earnings), Dollar Tree stock is another retailer to add to your shopping list.