United StatesWide moat

Costco Wholesale (COST) — moat facet

Two hundred billion dollars of revenue at 3.44 cents on the dollar, the thinnest margin of the three.

The American segment is most of Costco and its least profitable part per dollar. In fiscal 2025 it brought in $200,046 million of total revenue and $6,878 million of operating income, a margin of about 3.44%, the lowest of the three segments.12

U.S. segment operating margin (%)2.69%FY20162.74%FY20193.16%FY20213.19%FY20223.05%FY20233.38%FY20243.44%FY2025Costco Forms 10-K FY2016, FY2019, FY2022, FY2025; earlier years as reported then
Three-quarters of a point of margin gained in nine years, on revenue that grew 2.3 times.

The estate is large and mostly owned. At the end of fiscal 2025 Costco operated 629 American warehouses, 512 of them on land it owns, with about 93.6 million square feet of floor space and about 223,000 employees.3 By 10 May 2026 there were 637, in 47 states, Washington, D.C., and Puerto Rico.4

The cost structure is where the thin margin comes from. Merchandise costs were $174,021 million of segment revenue in fiscal 2025, about 87.0%, and selling, general and administrative expenses $19,147 million, about 9.6%.56 What is left is 3.44 cents on the dollar. Across the company, membership fees of $5,323 million were about half of operating income.78

Growth has been steady rather than fast. Segment revenue was $86,579 million in fiscal 2016 and $111,751 million in fiscal 2019.910 It reached $141,398 million in 2021 and $165,294 million in 2022.11 From 2016 to 2025 it grew about 2.3 times, roughly 9.8% a year.12 The slowest recent year was fiscal 2024, when American net sales grew 4%; excluding gasoline and currency, comparable sales grew 5%.13

The margin has widened slowly. Operating income was $2,326 million in fiscal 2016, about 2.69% of revenue on the basis reported then, and $5,268 million in 2022, about 3.19%.141516 It then fell to about 3.05% in 2023 before reaching 3.38% in 2024 and 3.44% in 2025.1718

Costco is spending more on the estate. Additions to property and equipment in the United States were $3,288 million in fiscal 2023 and $4,215 million in 2025, against depreciation of $1,895 million.19 In the latest quarter additions were $1,143 million against $846 million a year earlier.20

The June quarter was strong at the top and slightly weaker underneath. Revenue rose about 11.0% to $51,434 million and operating income about 9.3% to $1,873 million, so the margin slipped from about 3.70% to 3.64%.2122 Comparable sales rose 9%, or 7% excluding gasoline and currency, against 8% a year earlier on that basis.23

The number to watch is American comparable sales excluding gasoline and currency. It was 7% in the latest quarter against 8% a year earlier; a run below the membership growth rate would mean each member is buying less.

Moat trajectory: Holding steady

Margin of about 3.64% in the latest quarter against 3.70% a year earlier, on revenue up 11%.

The number that tests this moat
Moat Explorer calc
U.S. segment operating margin, latest quarter
3.64% in Q3 FY2026, from 3.70%

The thinnest margin of the three segments; a continued decline on rising revenue would mean the cost base is outgrowing the sales.

How it's calculated: 1,873 / 51,434 against 1,713 / 46,318.
Source: Costco Form 10-Q, Q3 FY2026 (Moat Explorer calc) ↗
References
  1. ReportedIn fiscal 2025 it brought in $200,046 million of total revenue and $6,878 million of operating income, a margin of about 3.44%, the lowest of the three segments.
    Costco Wholesale Form 10-K FY2025 - segment note 2023-2025: United States total revenue $176,630M/$184,143M/$200,046M, merchandise costs $174,021M and SG&A $19,147M (2025), operating income $5,392M/$6,217M/$6,878M; Canada $33,056M/$34,874M/$36,923M, operating income $1,448M/$1,648M/$1,849M; Other International $32,604M/$35,436M/$38,266M, operating income $1,274M/$1,420M/$1,656M; total revenue $275,235M, operating income $10,383M, membership fees $5,323M; U.S. additions to property and equipment $3,288M (2023) and $4,215M (2025), depreciation $1,895M; Canada additions $281M and $580M, total assets $7,304M; U.S. total assets $54,862M; Other International total assets $14,933M; 914 warehouses: 629 U.S. (512 owned), 110 Canada (94 owned), 175 Other International in Mexico 42, Japan 37, U.K. 29, Korea 20, Australia 15, Taiwan 14, China 7, Spain 5, France 2, Sweden 2, Iceland 1, New Zealand 1; floor space 93.6M/15.9M/25.2M sq ft; employees 223,000/55,000/63,000; changes in net sales and comparable sales by segment 2023-2025 — FY2023-FY2025 (ended August 31, 2025) · publ. October 2025 · source ↗
  2. Moat Explorer calcIn fiscal 2025 it brought in $200,046 million of total revenue and $6,878 million of operating income, a margin of about 3.44%, the lowest of the three segments.
    Moat Explorer calculation from Costco's Forms 10-K FY2016-FY2025 and the Q3 FY2026 10-Q: segment shares of revenue and operating income, operating margins, revenue per warehouse, compound growth rates, operating income over segment total assets — FY2014 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  3. ReportedAt the end of fiscal 2025 Costco operated 629 American warehouses, 512 of them on land it owns, with about 93.6 million square feet of floor space and about 223,000 employees.
    Costco Wholesale Form 10-K FY2025 - segment note 2023-2025: United States total revenue $176,630M/$184,143M/$200,046M, merchandise costs $174,021M and SG&A $19,147M (2025), operating income $5,392M/$6,217M/$6,878M; Canada $33,056M/$34,874M/$36,923M, operating income $1,448M/$1,648M/$1,849M; Other International $32,604M/$35,436M/$38,266M, operating income $1,274M/$1,420M/$1,656M; total revenue $275,235M, operating income $10,383M, membership fees $5,323M; U.S. additions to property and equipment $3,288M (2023) and $4,215M (2025), depreciation $1,895M; Canada additions $281M and $580M, total assets $7,304M; U.S. total assets $54,862M; Other International total assets $14,933M; 914 warehouses: 629 U.S. (512 owned), 110 Canada (94 owned), 175 Other International in Mexico 42, Japan 37, U.K. 29, Korea 20, Australia 15, Taiwan 14, China 7, Spain 5, France 2, Sweden 2, Iceland 1, New Zealand 1; floor space 93.6M/15.9M/25.2M sq ft; employees 223,000/55,000/63,000; changes in net sales and comparable sales by segment 2023-2025 — FY2023-FY2025 (ended August 31, 2025) · publ. October 2025 · source ↗
  4. ReportedBy 10 May 2026 there were 637, in 47 states, Washington, D.C., and Puerto Rico.
    Costco Wholesale Form 10-Q, quarter ended May 10, 2026 - segment revenue and operating income, 12 and 36 weeks: United States $51,434M/$46,318M and $1,873M/$1,713M (36 weeks $149,934M, $5,124M); Canada $9,410M/$8,321M and $506M/$450M (36 weeks $27,774M/$25,021M, $1,416M/$1,215M); Other International $9,683M/$8,566M and $436M/$367M; total operating income $7,884M (36 weeks); U.S. additions to property and equipment $1,143M against $846M; comparable sales U.S. 9%, Canada 11%, Other International 11%, excluding gasoline and currency 7%, 6% and 6% (prior year 8%, 8%, 9%); 928 warehouses: 637 U.S., 115 Canada, three in France — Q3 FY2026 (12 weeks ended May 10, 2026) · publ. June 2026 · source ↗
  5. ReportedMerchandise costs were $174,021 million of segment revenue in fiscal 2025, about 87.0%, and selling, general and administrative expenses $19,147 million, about 9.6%.
    Costco Wholesale Form 10-K FY2025 - segment note 2023-2025: United States total revenue $176,630M/$184,143M/$200,046M, merchandise costs $174,021M and SG&A $19,147M (2025), operating income $5,392M/$6,217M/$6,878M; Canada $33,056M/$34,874M/$36,923M, operating income $1,448M/$1,648M/$1,849M; Other International $32,604M/$35,436M/$38,266M, operating income $1,274M/$1,420M/$1,656M; total revenue $275,235M, operating income $10,383M, membership fees $5,323M; U.S. additions to property and equipment $3,288M (2023) and $4,215M (2025), depreciation $1,895M; Canada additions $281M and $580M, total assets $7,304M; U.S. total assets $54,862M; Other International total assets $14,933M; 914 warehouses: 629 U.S. (512 owned), 110 Canada (94 owned), 175 Other International in Mexico 42, Japan 37, U.K. 29, Korea 20, Australia 15, Taiwan 14, China 7, Spain 5, France 2, Sweden 2, Iceland 1, New Zealand 1; floor space 93.6M/15.9M/25.2M sq ft; employees 223,000/55,000/63,000; changes in net sales and comparable sales by segment 2023-2025 — FY2023-FY2025 (ended August 31, 2025) · publ. October 2025 · source ↗
  6. Moat Explorer calcMerchandise costs were $174,021 million of segment revenue in fiscal 2025, about 87.0%, and selling, general and administrative expenses $19,147 million, about 9.6%.
    Moat Explorer calculation from Costco's Forms 10-K FY2016-FY2025 and the Q3 FY2026 10-Q: segment shares of revenue and operating income, operating margins, revenue per warehouse, compound growth rates, operating income over segment total assets — FY2014 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  7. ReportedAcross the company, membership fees of $5,323 million were about half of operating income.
    Costco Wholesale Form 10-K FY2025 - segment note 2023-2025: United States total revenue $176,630M/$184,143M/$200,046M, merchandise costs $174,021M and SG&A $19,147M (2025), operating income $5,392M/$6,217M/$6,878M; Canada $33,056M/$34,874M/$36,923M, operating income $1,448M/$1,648M/$1,849M; Other International $32,604M/$35,436M/$38,266M, operating income $1,274M/$1,420M/$1,656M; total revenue $275,235M, operating income $10,383M, membership fees $5,323M; U.S. additions to property and equipment $3,288M (2023) and $4,215M (2025), depreciation $1,895M; Canada additions $281M and $580M, total assets $7,304M; U.S. total assets $54,862M; Other International total assets $14,933M; 914 warehouses: 629 U.S. (512 owned), 110 Canada (94 owned), 175 Other International in Mexico 42, Japan 37, U.K. 29, Korea 20, Australia 15, Taiwan 14, China 7, Spain 5, France 2, Sweden 2, Iceland 1, New Zealand 1; floor space 93.6M/15.9M/25.2M sq ft; employees 223,000/55,000/63,000; changes in net sales and comparable sales by segment 2023-2025 — FY2023-FY2025 (ended August 31, 2025) · publ. October 2025 · source ↗
  8. Moat Explorer calcAcross the company, membership fees of $5,323 million were about half of operating income.
    Moat Explorer calculation from Costco's Forms 10-K FY2016-FY2025 and the Q3 FY2026 10-Q: segment shares of revenue and operating income, operating margins, revenue per warehouse, compound growth rates, operating income over segment total assets — FY2014 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  9. ReportedSegment revenue was $86,579 million in fiscal 2016 and $111,751 million in fiscal 2019.
    Costco Wholesale Form 10-K FY2016 - segment note 2014-2016, as reported then: United States total revenue $80,477M/$84,351M/$86,579M, operating income $1,880M/$2,308M/$2,326M; Canada $17,943M/$17,341M/$17,028M, operating income $796M/$771M/$778M; Other International $14,220M/$14,507M/$15,112M, operating income $544M/$545M/$568M; changes in foreign currencies adversely impacted diluted EPS by $0.24, largely driven by changes in the Canadian dollar and Mexican peso — FY2014-FY2016 · publ. October 2016 · source ↗
  10. ReportedSegment revenue was $86,579 million in fiscal 2016 and $111,751 million in fiscal 2019.
    Costco Wholesale Form 10-K FY2019 - segment note 2017-2019, as reported then: United States total revenue $93,889M/$102,286M/$111,751M, operating income $2,644M/$2,787M/$3,063M; Canada $18,775M/$20,689M/$21,366M, operating income $841M/$939M/$924M; Other International $16,361M/$18,601M/$19,586M, operating income $626M/$754M/$750M — FY2017-FY2019 · publ. October 2019 · source ↗
  11. ReportedIt reached $141,398 million in 2021 and $165,294 million in 2022.
    Costco Wholesale Form 10-K FY2022 - segment note 2020-2022 (operating income restated for prior periods): United States total revenue $122,142M/$141,398M/$165,294M, operating income $3,822M/$4,470M/$5,268M; Canada $22,434M/$27,298M/$31,675M, operating income $778M/$1,093M/$1,346M; Other International $22,185M/$27,233M/$29,985M, operating income $835M/$1,145M/$1,179M — FY2020-FY2022 · publ. October 2022 · source ↗
  12. Moat Explorer calcFrom 2016 to 2025 it grew about 2.3 times, roughly 9.8% a year.
    Moat Explorer calculation from Costco's Forms 10-K FY2016-FY2025 and the Q3 FY2026 10-Q: segment shares of revenue and operating income, operating margins, revenue per warehouse, compound growth rates, operating income over segment total assets — FY2014 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  13. ReportedThe slowest recent year was fiscal 2024, when American net sales grew 4%; excluding gasoline and currency, comparable sales grew 5%.
    Costco Wholesale Form 10-K FY2025 - segment note 2023-2025: United States total revenue $176,630M/$184,143M/$200,046M, merchandise costs $174,021M and SG&A $19,147M (2025), operating income $5,392M/$6,217M/$6,878M; Canada $33,056M/$34,874M/$36,923M, operating income $1,448M/$1,648M/$1,849M; Other International $32,604M/$35,436M/$38,266M, operating income $1,274M/$1,420M/$1,656M; total revenue $275,235M, operating income $10,383M, membership fees $5,323M; U.S. additions to property and equipment $3,288M (2023) and $4,215M (2025), depreciation $1,895M; Canada additions $281M and $580M, total assets $7,304M; U.S. total assets $54,862M; Other International total assets $14,933M; 914 warehouses: 629 U.S. (512 owned), 110 Canada (94 owned), 175 Other International in Mexico 42, Japan 37, U.K. 29, Korea 20, Australia 15, Taiwan 14, China 7, Spain 5, France 2, Sweden 2, Iceland 1, New Zealand 1; floor space 93.6M/15.9M/25.2M sq ft; employees 223,000/55,000/63,000; changes in net sales and comparable sales by segment 2023-2025 — FY2023-FY2025 (ended August 31, 2025) · publ. October 2025 · source ↗
  14. ReportedOperating income was $2,326 million in fiscal 2016, about 2.69% of revenue on the basis reported then, and $5,268 million in 2022, about 3.19%.
    Costco Wholesale Form 10-K FY2016 - segment note 2014-2016, as reported then: United States total revenue $80,477M/$84,351M/$86,579M, operating income $1,880M/$2,308M/$2,326M; Canada $17,943M/$17,341M/$17,028M, operating income $796M/$771M/$778M; Other International $14,220M/$14,507M/$15,112M, operating income $544M/$545M/$568M; changes in foreign currencies adversely impacted diluted EPS by $0.24, largely driven by changes in the Canadian dollar and Mexican peso — FY2014-FY2016 · publ. October 2016 · source ↗
  15. ReportedOperating income was $2,326 million in fiscal 2016, about 2.69% of revenue on the basis reported then, and $5,268 million in 2022, about 3.19%.
    Costco Wholesale Form 10-K FY2022 - segment note 2020-2022 (operating income restated for prior periods): United States total revenue $122,142M/$141,398M/$165,294M, operating income $3,822M/$4,470M/$5,268M; Canada $22,434M/$27,298M/$31,675M, operating income $778M/$1,093M/$1,346M; Other International $22,185M/$27,233M/$29,985M, operating income $835M/$1,145M/$1,179M — FY2020-FY2022 · publ. October 2022 · source ↗
  16. Moat Explorer calcOperating income was $2,326 million in fiscal 2016, about 2.69% of revenue on the basis reported then, and $5,268 million in 2022, about 3.19%.
    Moat Explorer calculation from Costco's Forms 10-K FY2016-FY2025 and the Q3 FY2026 10-Q: segment shares of revenue and operating income, operating margins, revenue per warehouse, compound growth rates, operating income over segment total assets — FY2014 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  17. ReportedIt then fell to about 3.05% in 2023 before reaching 3.38% in 2024 and 3.44% in 2025.
    Costco Wholesale Form 10-K FY2025 - segment note 2023-2025: United States total revenue $176,630M/$184,143M/$200,046M, merchandise costs $174,021M and SG&A $19,147M (2025), operating income $5,392M/$6,217M/$6,878M; Canada $33,056M/$34,874M/$36,923M, operating income $1,448M/$1,648M/$1,849M; Other International $32,604M/$35,436M/$38,266M, operating income $1,274M/$1,420M/$1,656M; total revenue $275,235M, operating income $10,383M, membership fees $5,323M; U.S. additions to property and equipment $3,288M (2023) and $4,215M (2025), depreciation $1,895M; Canada additions $281M and $580M, total assets $7,304M; U.S. total assets $54,862M; Other International total assets $14,933M; 914 warehouses: 629 U.S. (512 owned), 110 Canada (94 owned), 175 Other International in Mexico 42, Japan 37, U.K. 29, Korea 20, Australia 15, Taiwan 14, China 7, Spain 5, France 2, Sweden 2, Iceland 1, New Zealand 1; floor space 93.6M/15.9M/25.2M sq ft; employees 223,000/55,000/63,000; changes in net sales and comparable sales by segment 2023-2025 — FY2023-FY2025 (ended August 31, 2025) · publ. October 2025 · source ↗
  18. Moat Explorer calcIt then fell to about 3.05% in 2023 before reaching 3.38% in 2024 and 3.44% in 2025.
    Moat Explorer calculation from Costco's Forms 10-K FY2016-FY2025 and the Q3 FY2026 10-Q: segment shares of revenue and operating income, operating margins, revenue per warehouse, compound growth rates, operating income over segment total assets — FY2014 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  19. ReportedAdditions to property and equipment in the United States were $3,288 million in fiscal 2023 and $4,215 million in 2025, against depreciation of $1,895 million.
    Costco Wholesale Form 10-K FY2025 - segment note 2023-2025: United States total revenue $176,630M/$184,143M/$200,046M, merchandise costs $174,021M and SG&A $19,147M (2025), operating income $5,392M/$6,217M/$6,878M; Canada $33,056M/$34,874M/$36,923M, operating income $1,448M/$1,648M/$1,849M; Other International $32,604M/$35,436M/$38,266M, operating income $1,274M/$1,420M/$1,656M; total revenue $275,235M, operating income $10,383M, membership fees $5,323M; U.S. additions to property and equipment $3,288M (2023) and $4,215M (2025), depreciation $1,895M; Canada additions $281M and $580M, total assets $7,304M; U.S. total assets $54,862M; Other International total assets $14,933M; 914 warehouses: 629 U.S. (512 owned), 110 Canada (94 owned), 175 Other International in Mexico 42, Japan 37, U.K. 29, Korea 20, Australia 15, Taiwan 14, China 7, Spain 5, France 2, Sweden 2, Iceland 1, New Zealand 1; floor space 93.6M/15.9M/25.2M sq ft; employees 223,000/55,000/63,000; changes in net sales and comparable sales by segment 2023-2025 — FY2023-FY2025 (ended August 31, 2025) · publ. October 2025 · source ↗
  20. ReportedIn the latest quarter additions were $1,143 million against $846 million a year earlier.
    Costco Wholesale Form 10-Q, quarter ended May 10, 2026 - segment revenue and operating income, 12 and 36 weeks: United States $51,434M/$46,318M and $1,873M/$1,713M (36 weeks $149,934M, $5,124M); Canada $9,410M/$8,321M and $506M/$450M (36 weeks $27,774M/$25,021M, $1,416M/$1,215M); Other International $9,683M/$8,566M and $436M/$367M; total operating income $7,884M (36 weeks); U.S. additions to property and equipment $1,143M against $846M; comparable sales U.S. 9%, Canada 11%, Other International 11%, excluding gasoline and currency 7%, 6% and 6% (prior year 8%, 8%, 9%); 928 warehouses: 637 U.S., 115 Canada, three in France — Q3 FY2026 (12 weeks ended May 10, 2026) · publ. June 2026 · source ↗
  21. ReportedRevenue rose about 11.0% to $51,434 million and operating income about 9.3% to $1,873 million, so the margin slipped from about 3.70% to 3.64%.
    Costco Wholesale Form 10-Q, quarter ended May 10, 2026 - segment revenue and operating income, 12 and 36 weeks: United States $51,434M/$46,318M and $1,873M/$1,713M (36 weeks $149,934M, $5,124M); Canada $9,410M/$8,321M and $506M/$450M (36 weeks $27,774M/$25,021M, $1,416M/$1,215M); Other International $9,683M/$8,566M and $436M/$367M; total operating income $7,884M (36 weeks); U.S. additions to property and equipment $1,143M against $846M; comparable sales U.S. 9%, Canada 11%, Other International 11%, excluding gasoline and currency 7%, 6% and 6% (prior year 8%, 8%, 9%); 928 warehouses: 637 U.S., 115 Canada, three in France — Q3 FY2026 (12 weeks ended May 10, 2026) · publ. June 2026 · source ↗
  22. Moat Explorer calcRevenue rose about 11.0% to $51,434 million and operating income about 9.3% to $1,873 million, so the margin slipped from about 3.70% to 3.64%.
    Moat Explorer calculation from Costco's Forms 10-K FY2016-FY2025 and the Q3 FY2026 10-Q: segment shares of revenue and operating income, operating margins, revenue per warehouse, compound growth rates, operating income over segment total assets — FY2014 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  23. ReportedComparable sales rose 9%, or 7% excluding gasoline and currency, against 8% a year earlier on that basis.
    Costco Wholesale Form 10-Q, quarter ended May 10, 2026 - segment revenue and operating income, 12 and 36 weeks: United States $51,434M/$46,318M and $1,873M/$1,713M (36 weeks $149,934M, $5,124M); Canada $9,410M/$8,321M and $506M/$450M (36 weeks $27,774M/$25,021M, $1,416M/$1,215M); Other International $9,683M/$8,566M and $436M/$367M; total operating income $7,884M (36 weeks); U.S. additions to property and equipment $1,143M against $846M; comparable sales U.S. 9%, Canada 11%, Other International 11%, excluding gasoline and currency 7%, 6% and 6% (prior year 8%, 8%, 9%); 928 warehouses: 637 U.S., 115 Canada, three in France — Q3 FY2026 (12 weeks ended May 10, 2026) · publ. June 2026 · source ↗
Sources
Generated September 23, 2026