Operates membership warehouses and e-commerce sites that offer a limited selection of products at low prices and generate high sales volumes.
★★★★★
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Strong
What Costco does
Costco operates membership warehouses and e-commerce sites that sell a broad range of merchandise at low prices while earning recurring membership fees.
Founded
1983
Issaquah, Washington
CEO
Ron Vachris
Since 2024
Market cap
$414.75B
35
Revenue (FY26)
$303.15B
+10.1% YoY
30-Second Summary
A plain-English explanation of Costco's business model
If you only remember one thing
Costco is a membership-based warehouse retailer. Customers pay a recurring membership fee to shop at Costco, while Costco makes most of its revenue by selling a large volume of merchandise at relatively low prices. The membership model helps build recurring revenue and customer loyalty, while high sales volumes and efficient operations support the business.
Business Segments
Where Costco's $303.15B Fiscal year 2026 (ended August 30, 2026) comes from
$303.15B
Fiscal year 2026
98% of revenue ·+10.1% YoY
2% of revenue ·+11% YoY
Costco's fiscal 2026 revenue is primarily generated by merchandise sales through its warehouse and e-commerce business, with a smaller but recurring contribution from membership fees.
Fiscal year 2026 ended August 30, 2026. Costco does not report these two revenue sources as separate operating segments. They are shown here as major revenue sources reported in Costco's consolidated financial statements. Percentages are calculated against total fiscal 2026 revenue of $303.154B.
Business Model
How Costco makes money — the ecosystem flywheel
Build Membership
Sell at Low Prices
Strengths & Risks
What makes Costco strong — and what could go wrong
Strong Membership Model
Costco earns recurring membership fees from customers who pay for access to its warehouse and e-commerce offerings.
Large Operating Scale
Costco operates hundreds of warehouses across multiple countries, giving it significant purchasing and distribution scale.
High Sales Volume
The company focuses on a limited product selection and high inventory turnover, allowing it to sell large volumes while maintaining relatively low merchandise margins.
Customer Loyalty
Membership renewal rates and the recurring nature of membership create a strong customer-retention component in the business model.
Multiple Growth Channels
Costco can grow through new warehouses, increased sales at existing locations, membership growth, higher membership income, and digitally-enabled sales.
Financial Overview
Fiscal year 2026 (ended August 30, 2026)
$303.15B
+10.1% YoY
FY26
$9.23B
+13.9% YoY
FY26
$9.39B
+19.8% YoY
FY26
Costco generated $303.154B of total revenue and $9.226B of net income in fiscal 2026. Operating cash flow was $15.825B and capital expenditures were $6.435B, producing approximately $9.390B of calculated free cash flow.
Financial History
5-year trend, fiscal years 2022–2026
$303.15B
+34% since FY22
Business Ecosystem
Who Costco depends on — and who depends on Costco
Members
Members pay recurring fees and purchase merchandise through Costco warehouses and e-commerce sites.
Suppliers
Manufacturers, brands, and other suppliers provide the merchandise Costco purchases and sells through its warehouse and digital channels.
Distribution Network
Distribution facilities, transportation operations, and warehouse infrastructure support Costco's high-volume inventory model.
Costco
Membership warehouse retailer
Competitors
Companies used as broad comparison references for Costco's warehouse-club and large-scale retail model. Costco has a distinctive membership-based model, so no single company is a perfect one-to-one competitor. Market caps use an October 2026 snapshot.
Walmart
$850.5B
One of the world's largest retailers and a major competitor for everyday consumer spending across physical stores and e-commerce.
Target
$70.11B
Large U.S. retailer competing with Costco for consumer spending across groceries, household products, electronics, apparel, and other merchandise.
Kroger
$34.5B
Large grocery retailer that provides a comparison for Costco's food, grocery, and everyday-consumer retail exposure.
