Costco's Global Footprint, Membership Soar in FY25

TL;DR

**Costco's membership model is a fortress, with strong growth and employee investment making it a solid long-term hold despite retail competition.**

AI Summary

Costco Wholesale Corporation reported a robust fiscal year ended August 31, 2025, with significant growth in its global operations. The company expanded its warehouse footprint to 914 locations worldwide, up from 890 in 2024 and 861 in 2023. Membership figures also saw substantial increases, with total paid members reaching 81.0 million in 2025, an increase from 76.2 million in 2024. Executive members, who represent 73.6% of worldwide net sales, grew to 38.7 million from 35.4 million. The company's U.S. and Canada member renewal rate stood strong at 92.3%, with a worldwide rate of 89.8%. Costco also demonstrated a commitment to its workforce, increasing the starting wage by $0.50 to at least $20.00 per hour for entry-level positions in the U.S. and Canada in March 2025, and raising the average hourly rate for U.S. hourly employees to approximately $32.00. Key risks include intense competition from major retailers like Walmart, Target, Kroger, and Amazon, as well as other warehouse clubs such as Sam's Club and BJ's Wholesale Club. Strategic outlook emphasizes continued expansion, strong membership value, and employee investment.

Why It Matters

Costco's continued expansion to 914 warehouses and robust membership growth to 81.0 million paid members signals strong consumer loyalty and effective market penetration, directly impacting investor confidence. The increase in starting wages to $20.00 per hour and an average hourly rate of $32.00 in the U.S. demonstrates a commitment to employees, potentially reducing turnover and enhancing service quality, which benefits customers. In a highly competitive retail landscape against giants like Walmart and Amazon, Costco's ability to maintain high renewal rates (92.3% in U.S./Canada) and grow its Executive membership base (38.7 million) underscores its unique value proposition and competitive resilience.

Risk Assessment

Risk Level: low — Costco exhibits a low risk profile due to its strong membership renewal rates of 92.3% in the U.S. and Canada and 89.8% worldwide, indicating high customer loyalty. The company's consistent growth in paid members, reaching 81.0 million in 2025, and its strategic focus on low prices and efficient operations, as evidenced by operating 914 warehouses globally, provide a stable foundation against market fluctuations. Furthermore, the diversification of its supply chain and expansion of in-country production mitigate supplier dependency risks.

Analyst Insight

Investors should consider Costco a core holding, given its consistent membership growth, high renewal rates, and strategic employee investments. The company's ability to thrive in a competitive retail environment, expanding to 914 warehouses and increasing Executive members to 38.7 million, suggests continued stability and potential for steady returns. Monitor global expansion and e-commerce growth for further upside.

Key Numbers

• $475.2 billion — aggregate market value of voting stock held by non-affiliates (as of February 16, 2025)
• 914 — warehouses worldwide (at August 31, 2025, up from 890 in 2024)
• 81.0 million — total paid members (at the end of 2025, up from 76.2 million in 2024)
• 38.7 million — Executive members (at the end of 2025, representing 73.6% of worldwide net sales)
• 92.3% — member renewal rate (in the U.S. and Canada at the end of 2025)
• 89.8% — worldwide member renewal rate (at the end of 2025)
• 341,000 — employees worldwide (at the end of 2025, up from 333,000 in 2024)
• $20.00 — starting wage per hour (increased in March 2025 for entry-level positions in U.S. and Canada)
• $32.00 — average hourly rate (for hourly employees in the U.S. at the end of 2025)
• 7% — e-commerce net sales (represented approximately 7% of total net sales in 2025)

Key Players & Entities

• Costco Wholesale Corporation (company) — registrant
• NASDAQ Global Select Market (regulator) — stock exchange
• Walmart (company) — competitor
• Target (company) — competitor
• Amazon (company) — competitor
• Sam's Club (company) — competitor
• Kirkland Signature (company) — private-label brand
• SEC (regulator) — Securities and Exchange Commission
• Sarbanes-Oxley Act (regulator) — regulatory act

FAQ

Key Financial Figures

• $65 — Our annual fee for these memberships is $65 in the U.S. and varies in other countri
• $1,250 — es (generally up to a maximum reward of $1,250 per year), redeemable at Costco warehou
• $0.50 — 2025, we increased the starting wage by $0.50 an hour to at least $20.00 for all entr
• $20.00 — rting wage by $0.50 an hour to at least $20.00 for all entry-level positions in the U.
• $1.00 — lso increased the top of wage scales by $1.00 per hour, bringing our average hourly r
• $32.00 — employees in the U.S. to approximately $32.00 per hour. We continue to offer 6 Tab

Filing Documents

• cost-20250831.htm (10-K) — 1405KB
• costex21110k83125.htm (EX-21.1) — 13KB
• costex23110k83125.htm (EX-23.1) — 2KB
• costex31110k83125.htm (EX-31.1) — 19KB
• costex32110k83125.htm (EX-32.1) — 11KB
• cost-20250831_g1.jpg (GRAPHIC) — 94KB
• 0000909832-25-000101.txt ( ) — 8065KB
• cost-20250831.xsd (EX-101.SCH) — 46KB
• cost-20250831_cal.xml (EX-101.CAL) — 81KB
• cost-20250831_def.xml (EX-101.DEF) — 174KB
• cost-20250831_lab.xml (EX-101.LAB) — 689KB
• cost-20250831_pre.xml (EX-101.PRE) — 471KB
• cost-20250831_htm.xml (XML) — 1131KB

Business

Item 1. Business 3

Risk Factors

Item 1A. Risk Factors 9

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 18

Cybersecurity

Item 1C. Cybersecurity 18

Properties

Item 2. Properties 20

Legal Proceedings

Item 3. Legal Proceedings 20

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 20 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20

Reserved

Item 6. Reserved 22

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 23

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 33

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 64

Controls and Procedures

Item 9A. Controls and Procedures 64

Other Information

Item 9B. Other Information 65

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 65 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 65

Executive Compensation

Item 11. Executive Compensation 65

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 65

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 65

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 65 PART IV

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 66

Form 10-K Summary

Item 16. Form 10-K Summary 68

Signatures

Signatures 69 2 Table of Contents INFORMATION RELATING TO FORWARD LOOKING STATEMENTS Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future and may relate to such matters as net sales growth, changes in comparable sales, cannibalization of existing locations by new openings, price or fee changes, earnings performance, earnings per share, stock-based compensation expense, warehouse openings and closures, capital spending, the effect of adopting certain accounting standards, future financial reporting, financing, margins, return on invested capital, investments in technology, strategic direction, expense controls, membership fee changes, signups, and renewal rates, shopping frequency, litigation, attainment of sustainability goals, and the demand for our products and services. In some cases, forward-looking statements can be identified because they contain words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "might," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements, including, without limitation, the factors set forth in the section titled "Item 1A-Risk Factors", and other factors noted in the section titled "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations" and in the consolidated financial statements and related notes in Item 8 of this Report. Forward-looking statements speak only as of the date they are

—Business

Item 1—Business Costco Wholesale Corporation and its subsidiaries (Costco or the Company) began operations in 1983, in Seattle, Washington. We are principally engaged in the operation of membership warehouses in the United States (U.S.) and Puerto Rico, Canada, Mexico, Japan, the United Kingdom (U.K.), Korea, Australia, Taiwan, China, Spain, France, Sweden, Iceland, and New Zealand. Costco operated 914, 890, and 861 warehouses worldwide at August 31, 2025, September 1, 2024, and September 3, 2023. The Company operates e-commerce sites in the U.S., Canada, Mexico, the U.K., Korea, Taiwan, Japan, and Australia. Our common stock trades on the NASDAQ Global Select Market, under the symbol "COST." We report on a 52/53-week fiscal year, consisting of thirteen four-week periods and ending on the Sunday nearest the end of August. The first three quarters consist of three periods each, and the fourth quarter consists of four periods (five weeks in the thirteenth period in a 53-week year). The material seasonal impact in our operations is increased net sales and earnings during the winter holiday season. References to 2025 and 2024 relate to the 52-week fiscal years ended August 31, 2025, and September 1, 2024. References to 2023 relate to the 53-week fiscal year ended September 3, 2023. General We operate membership warehouses and e-commerce sites based on the concept that offering low prices on a limited selection of nationally-branded and private-label products in a wide range of categories will produce high sales volumes and rapid inventory turnover. When combined with the operating efficiencies achieved by volume purchasing, efficient distribution and reduced handling of merchandise in no-frills, self-service warehouse facilities, these volumes and turnover enable us to operate profitably at significantly lower gross margins (net sales less merchandise costs) than most other retailers. We often sell inventory before we are required to pay for it, even while taking ad

—Risk Factors

Item 1A—Risk Factors The risks described below could materially and adversely affect our business, financial condition and results of operations. We could also be affected by additional risks that apply to all companies operating in the U.S. and globally, as well as other risks that are not presently known to us or that we currently consider to be immaterial. These Risk Factors should be carefully reviewed in conjunction with Management ' s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 and our consolidated financial statements and related notes in Item 8 of this Report. Business and Operating Risks We are highly dependent on the financial performance of our U.S. and Canadian operations. Our financial and operational performance is highly dependent on our U.S. and Canadian operations, which comprised 86% and 84% of net sales and operating income in 2025. Within the U.S., we are highly dependent on our California operations, which comprised 26% of U.S. net sales in 2025. Our California market, in general, has a larger percentage of higher volume warehouses as compared to our other domestic markets. Any substantial slowing or sustained decline in these operations could materially adversely affect our business and financial results. Declines in financial performance of our U.S. operations, particularly in California, and our Canadian operations could arise from, among other things: slo