In fiscal 2026 (52 weeks to 30 August 2026) Costco reported total revenue of $303.2 billion, up 10% from $275.2 billion, operating income of $11.7 billion and net income of $9.2 billion, according to its Form 10-K. Almost all revenue is merchandise sold at a gross margin of about 11%; the $5.9 billion of membership fees is small in revenue terms but central to profit. Operating cash flow of $15.8 billion covered $6.4 billion of capital spending.
Net sales were $297.2 billion and merchandise costs $264.3 billion, a gross margin of 11.09% of net sales in fiscal 2026.
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Charge for access
Membership fees were $5.9 billion, up 11%. The US annual fee is $65 and includes a free household card; Executive members pay an additional fee and generally earn a 2% reward.
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Keep overheads tight
Selling, general and administrative costs were $27.2 billion, leaving operating income of $11.7 billion, an operating margin of about 3.9% of total revenue (our calculation).
Costco says it often sells inventory before it has to pay for it. Operating cash flow was $15.8 billion against $6.4 billion of additions to property and equipment.
What changed in fiscal 2026
Growth with a fee tailwind
Membership fee revenue rose 11%, driven by sign-ups, the fee increase in the US and Canada effective 1 September 2024 and upgrades to Executive membership. Costco says the fee increase accounted for about 30% of membership incomegrowth in fiscal 2026 (Costco 10-K, fiscal 2026).
Digital is a growing slice
Digitally-enabled sales, initiated on a digital device and fulfilled through warehouses, depots or Costco Travel, were 11% of total net sales in fiscal 2026, and digitally-enabled comparable sales rose 21%.
More members, more warehouses
Paid members reached 84.1 million, up from 81.0 million; Executive members were 42.3 million and generated about 75.2% of worldwide net sales. Renewal rates were 92.3% in the US and Canada and 89.8% worldwide. Costco ended the year with 939 warehouses, 25 more than a year earlier.
AI as a stated risk
The 10-K says Costco must keep pace with artificial intelligence, warns that AI has sped up cybersecurity threats, and flags the risk of inaccurate AI outputs reaching members or employees.
Investors: read membership fees, renewal rates and Executive penetration together; they drive profit more than headline sales.
Operators: a fee paid upfront lets you price goods close to cost and still earn a steady return.
Builders: design for fast inventory or service turnover so customers fund working capital, not lenders.
Analysts: adjust for gasoline, which lifts sales but lowers the gross margin percentage when prices rise.
Watch the digital share of sales each year to see whether Costco's low-cost model carries over online.
The Business Engineer lens
Costco’s numbers show a business that earns its living from a paid, renewing relationship rather than from markups. The Business Engineer view: in AI-era retail, where price comparison is instant, a membership that customers pay for in advance is a sturdier moat than any single price.
The complete explainer, cleaned up and reformatted for mobile.
In short
Costco’s fiscal 2026 financials: total revenue $303.2B (+10%), operating income $11.7B (3.9% margin), net income $9.2B and operating cash flow $15.8B, against $6.4B of capital spending. The year ran 52 weeks to 30 Aug 2026.
How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
Sources: Costco Form 10-K for fiscal 2026 (52 weeks to 30 Aug 2026, filed 7 Oct 2026); annual series from Costco 10-K XBRL data (SEC). Fiscal 2023 had 53 weeks. Calculated figures are labelled.
Last Updated: April 2026
What Is Costco Financials?
Costco Financials refers to the comprehensive financial performance, metrics, and economic data of Costco Wholesale Corporation, a multinational membership-based warehouse retailer operating globally. The company’s financial statements reveal its revenue streams, profitability margins, cash flows, and shareholder returns across fiscal periods. Understanding Costco’s financials provides critical insights into the warehouse club retail model’s viability and its competitive positioning within global retail markets.
Dual-revenue model balancing low merchandise margins with high-margin membership fees
Costco’s financial model operates through a carefully orchestrated system where membership revenues and merchandise sales create complementary profit streams. The company collects membership fees upfront, generating immediate cash before inventory sales occur, while maintaining deliberately low product margins that incentivize bulk purchases and member retention. This structure creates predictable, recurring revenue alongside operational leverage from warehouse productivity.
Warehouse distribution efficiency: Costco operates a single-step distributionstrategy where merchandise flows directly from suppliers to warehouse floors, eliminating traditional retail distribution center intermediaries. This reduces logistics costs and accelerates inventory velocity, enabling the company to collect customer payments before remitting supplier invoices.
Costco Financials in Practice: Real-World Examples
Fiscal Year 2023 Revenue Growth and Profitability Achievement
Membership Revenue as Profit Engine
Merchandise Sales Efficiency and Inventory Management
International Operations and Geographic Diversification
Why Costco Financials Matters in Business
Benchmarking Retail Business Model Innovation
Understanding Consumer Behavior Through Financial Metrics
Evaluating Supply Chain and Operational Excellence
Advantages and Disadvantages of Costco Financials
Advantages
Strong member loyalty and retention: Renewal rates exceeding 90% in core markets create predictable revenue bases and reduce customer acquisition cost amortization, enabling the company to invest profits into warehouse expansion rather than retention marketing.
Disadvantages
Key Takeaways
Renewal rates exceeding 90% in mature markets ensure predictable recurring revenue and reduce customer acquisition dependencies, providing financial stability superior to traditional retail models.
Frequently Asked Questions
How does Costco maintain profitability with such low merchandise margins?
What is Costco’s net profit margin compared to competitors?
How much revenue does Costco generate from membership fees versus merchandise sales?
What is Costco’s international revenue contribution and growth potential?
How does inventory turnover impact Costco’s financial performance?
What percentage of Costco’s members are Executive members versus Gold Star members?
How many warehouses does Costco operate and what is average warehouse productivity?
What is Costco’s capital expenditure requirement and how does it support growth?
Costco in charts
Costco at a glance: $303.2B of revenue in fiscal 2026. Source: Costco Form 10-K for fiscal 2026 (SEC EDGAR). YoY and margins calculated. Analysis by The Business Engineer.Costco turns $303B of revenue into $11.7B of operating income. Source: Costco Form 10-K for fiscal 2026 (SEC). Shares calculated. Analysis by The Business Engineer.
The Business Engineer view: a cash machine that reinvests
Operating cash flow of $15.8B more than covered $6.4B of new warehouses and depots in fiscal 2026 (Costco fiscal 2026 10-K).
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
