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Costco Wholesale Corp. (NASDAQ:COST)

Common-Size Income Statement

Costco Wholesale Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Aug 30, 2026 Aug 31, 2025 Sep 1, 2024 Sep 3, 2023 Aug 28, 2022 Aug 29, 2021
Net sales 100.00 100.00 100.00 100.00 100.00 100.00
Merchandise costs -88.91 -88.88 -89.08 -89.43 -89.52 -88.87
Gross margin 11.09% 11.12% 10.92% 10.57% 10.48% 11.13%
Membership fees 1.99 1.97 1.93 1.93 1.90 2.02
Selling, general and administrative -9.15 -9.25 -9.14 -9.08 -8.88 -9.65
Operating income 3.93% 3.85% 3.72% 3.41% 3.50% 3.49%
Interest expense -0.05 -0.06 -0.07 -0.07 -0.07 -0.09
Interest income 0.20 0.17 0.21 0.20 0.03 0.02
Foreign-currency transaction gains, net 0.02 0.03 0.01 0.01 0.05 0.03
Other, net 0.01 0.01 0.03 0.01 0.02 0.02
Interest income and other, net 0.24% 0.22% 0.25% 0.22% 0.09% 0.07%
Other income (expense) 0.19% 0.16% 0.18% 0.16% 0.02% -0.01%
Income before income taxes 4.12% 4.01% 3.90% 3.57% 3.52% 3.48%
Provision for income taxes -1.02 -1.01 -0.95 -0.92 -0.86 -0.83
Net income including noncontrolling interests 3.10% 3.00% 2.95% 2.65% 2.66% 2.64%
Net income attributable to noncontrolling interests 0.00 0.00 0.00 0.00 -0.03 -0.04
Net income attributable to Costco 3.10% 3.00% 2.95% 2.65% 2.62% 2.61%

Based on: 10-K (reporting date: 2026-08-30), 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29).

The common-size income statement reveals a consistent expansion in net profitability over the analyzed period. Net income attributable to the company grew from 2.61% of net sales in 2021 to 3.10% by 2026, driven by a combination of improved operational efficiency and stable gross margins.

Gross Profitability and Cost Management
Merchandise costs have remained relatively stable, fluctuating within a narrow range between 88.87% and 89.52% of net sales. After a peak in costs in 2022 (89.52%), there is a gradual downward trend toward 88.91% by 2026. Consequently, the gross margin has shown a recovery and slight growth trend, rising from 10.48% in 2022 to 11.09% in 2026.
Operational Efficiency
Selling, general, and administrative (SG&A) expenses as a percentage of net sales decreased from 9.65% in 2021 to 9.15% in 2026. This reduction in overhead relative to sales has contributed directly to the expansion of the operating income margin, which rose from 3.41% in 2023 to 3.93% in 2026.
Membership Revenue Contribution
Membership fees have provided a consistent revenue stream, maintaining a steady contribution of approximately 1.90% to 2.02% of net sales. A slight upward trajectory is noted toward the end of the period, reaching 1.99% in 2026, indicating a stable and slightly growing reliance on subscription-based income relative to total sales.
Non-Operating Income and Expenses
Interest expense has decreased marginally from 0.09% to 0.05% of net sales. Simultaneously, interest income saw a significant increase from 0.03% in 2022 to 0.20% in 2026. These factors, combined with modest gains from foreign-currency transactions, have resulted in a positive trend for other income, which grew from -0.01% in 2021 to 0.19% in 2026.
Bottom-Line Performance
Income before income taxes increased steadily from 3.48% in 2021 to 4.12% in 2026. While the provision for income taxes as a percentage of sales also rose from 0.83% to 1.02%, the gains in operating and non-operating income were sufficient to drive a net income margin increase of 49 basis points over the six-year period.

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