Start with the dated company disclosure
For the 52 weeks ended August 31, 2025, Costco reported net sales of USD 269,912 million, membership fees of USD 5,323 million and net income of USD 8,099 million. Its Form 10-K states that U.S. and Canadian annual membership fees increased effective September 1, 2024, with revenue recognized over the membership year. Company disclosure and supporting tables.
Read the operating drivers separately
| Measure | What to compare | What a rise does not prove |
|---|---|---|
| Membership income | Fee changes, paying memberships and recognition timing | That a fee increase was still wholly in the future |
| Merchandise economics | Sales, merchandise costs and operating expenses | That merchandise must break even |
| Comparable sales | Comparable periods and disclosed currency/fuel adjustments | That all growth came from new warehouses |
Membership income is a revenue line, not a separately disclosed 100% margin profit segment. Merchandise operations and member services share expenses. Subtracting membership revenue from net income also mixes pre-expense revenue with after-tax earnings and does not isolate merchandise profit. The useful question is how member retention and shopping activity support the whole business.
Work through the economic effect
Hypothetically, a USD 12 annual fee increase recognized evenly over twelve months contributes USD 1 of revenue per member-month. A cohort renewed six months before year-end contributes USD 6 from the increase during that six-month span. This example ignores actual renewal timing and accounting details; it illustrates why cash collected and recognized fee revenue can differ.
Bull, neutral and bear conditions
| Case | Conditions to test |
|---|---|
| Bull | Renewals and spending hold while new warehouses improve operating returns. |
| Neutral | Fee recognition lifts revenue but merchandise and operating costs absorb the benefit. |
| Bear | Renewal weakness or cost pressure coincides with valuation contraction. |
These are conditional analytical scenarios, not probabilities, current valuations or entry prices. Check the next comparable filing before changing any assumption. A strong business result and a positive shareholder return are separate outcomes.
What to reconcile in the next report
For the next report, compare memberships and sales over the same accounting period, then check whether a fee change has fully flowed into recognized revenue. Separate warehouse openings from comparable-location activity. A new warehouse can increase total sales while its early staffing and property costs weigh on profitability. Renewal strength can support the model, but it does not remove the risk of paying a valuation that assumes more growth than the business delivers. Avoid replacing that question with anecdotes about favorite products.
Sources checked September 11, 2026, except where an earlier check date is specified. This article explains public information and stated assumptions; it does not recommend buying or selling or determine individual tax treatment. Investment disclaimer
References
1- 2025 Form 10-K: Membership Fees and Consolidated Statements of Income (opens in a new tab) Costco Wholesale · checked 2026-09-11
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