Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Costco Wholesale Corp., profitability ratios
Based on: 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), 10-K (reporting date: 2020-08-30).
The financial data reveals several key trends in the profitability and efficiency metrics over the six-year period under review.
- Gross Profit Margin
-
The gross profit margin experienced slight fluctuations but remained relatively stable, starting at 11.2% in 2020 and showing a minor decrease in 2022 to 10.48%. Subsequently, it rebounded gradually, reaching 11.12% by 2025. This suggests that the company managed to maintain consistent control over its cost of goods sold relative to revenue.
- Operating Profit Margin
-
Operating profit margin displayed a general upward trend, rising from 3.33% in 2020 to 3.85% in 2025. Although a minor dip occurred in 2023 to 3.41%, the overall improvement indicates enhanced operational efficiency or better management of operating expenses over time.
- Net Profit Margin
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Net profit margin showed steady improvement throughout the period, increasing from 2.45% to 3.00%. This consistent growth points to stronger bottom-line profitability and suggests improved cost management or favorable tax, interest, or non-operating income effects.
- Return on Equity (ROE)
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Return on equity exhibited some volatility, beginning at 21.89% in 2020 and peaking at 31.19% in 2024 before settling to 27.77% in 2025. These variations may reflect changes in leverage, net income, or equity base, but the elevated ROE levels throughout indicate effective utilization of shareholders' equity.
- Return on Assets (ROA)
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Return on assets showed a clear upward trajectory, improving steadily from 7.2% to 10.5%. This suggests efficient use of assets in generating profits and indicates enhanced asset management or profitability growth over the span of the assessed years.
Overall, the analyzed financial metrics reflect a positive trend in profitability and operational performance, with improvements seen in operating efficiency, net profitability, and returns generated from both equity and assets.
Return on Sales
Return on Investment
Gross Profit Margin
Costco Wholesale Corp., gross profit margin calculation, comparison to benchmarks
| Aug 31, 2025 | Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross margin | 30,026) | 27,267) | 25,124) | 23,348) | 21,368) | 18,281) | |
| Net sales | 269,912) | 249,625) | 237,710) | 222,730) | 192,052) | 163,220) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 11.12% | 10.92% | 10.57% | 10.48% | 11.13% | 11.20% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Target Corp. | 28.21% | 27.54% | 24.57% | 29.28% | 29.27% | 29.76% | |
| Walmart Inc. | 24.13% | 23.73% | 23.46% | 24.44% | 24.30% | 24.10% | |
Based on: 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), 10-K (reporting date: 2020-08-30).
1 2025 Calculation
Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × 30,026 ÷ 269,912 = 11.12%
2 Click competitor name to see calculations.
The analysis of the financial data reveals several noteworthy trends over the reported periods. There is a consistent upward trajectory in both gross margin and net sales, indicating sustained growth in revenue generation and profitability at the gross level.
- Gross Margin
- The gross margin has increased steadily from 18,281 million US dollars in the first period to 30,026 million US dollars in the latest period. This reflects a significant increase in the absolute gross profit, suggesting effective management of cost of goods sold relative to sales.
- Net Sales
- Net sales demonstrate a robust growth pattern, rising from 163,220 million US dollars to 269,912 million US dollars over the periods analyzed. This consistent increase points to expanding sales volume or value and potentially successful market penetration or pricing strategies.
- Gross Profit Margin Percentage
- The gross profit margin percentage shows some fluctuation but generally trends upward from 11.2% to 11.12%. After a slight dip in the middle periods, the margin percentage recovers and approaches its initial level, indicating maintained efficiency in production or procurement despite the larger scale of operations.
Overall, the company exhibits healthy financial growth, with rising sales and gross profit figures accompanying a stable gross profit margin percentage. This pattern suggests an effective balance between revenue growth and cost control measures, supporting sustainable profitability over time.
Operating Profit Margin
Costco Wholesale Corp., operating profit margin calculation, comparison to benchmarks
| Aug 31, 2025 | Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 10,383) | 9,285) | 8,114) | 7,793) | 6,708) | 5,435) | |
| Net sales | 269,912) | 249,625) | 237,710) | 222,730) | 192,052) | 163,220) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 3.85% | 3.72% | 3.41% | 3.50% | 3.49% | 3.33% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Target Corp. | 5.22% | 5.31% | 3.53% | 8.44% | 6.99% | 5.96% | |
| Walmart Inc. | 4.35% | 4.20% | 3.37% | 4.57% | 4.06% | 3.96% | |
| Operating Profit Margin, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 4.20% | 3.40% | 4.76% | 4.26% | 4.03% | |
| Operating Profit Margin, Industry | |||||||
| Consumer Staples | — | 7.96% | 7.31% | 8.44% | 8.48% | 8.17% | |
Based on: 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), 10-K (reporting date: 2020-08-30).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 10,383 ÷ 269,912 = 3.85%
2 Click competitor name to see calculations.
The financial data indicates a consistent upward trend in key performance metrics over the observed periods. Net sales have shown robust growth year over year, increasing from $163.22 billion in 2020 to an estimated $269.91 billion in 2025. This upward trajectory reflects sustained revenue expansion and potentially effective market penetration or volume growth.
Operating income has also increased significantly during the same period, rising from $5.435 billion in 2020 to an anticipated $10.383 billion in 2025. This notable growth in operating income suggests improved operational efficiency and successful cost management as revenues expand.
The operating profit margin exhibits a relatively stable trend with slight fluctuations. Beginning at 3.33% in 2020, the margin shows a modest increase to 3.85% by 2025. The margin peaked at 3.72% in 2024 and, although the margin lightly dipped in 2023 to 3.41%, overall, the trend points to a gradual enhancement in profitability at the operating level, which may be a result of improved expense control or stronger pricing power.
In summary, the data reflects a strong growth trajectory for net sales and operating income, accompanied by a stable and slightly improving operating profit margin. These patterns suggest an overall positive financial performance with effective scaling of operations and margin management.
Net Profit Margin
Costco Wholesale Corp., net profit margin calculation, comparison to benchmarks
| Aug 31, 2025 | Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Costco | 8,099) | 7,367) | 6,292) | 5,844) | 5,007) | 4,002) | |
| Net sales | 269,912) | 249,625) | 237,710) | 222,730) | 192,052) | 163,220) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 3.00% | 2.95% | 2.65% | 2.62% | 2.61% | 2.45% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Target Corp. | 3.84% | 3.85% | 2.55% | 6.55% | 4.67% | 4.20% | |
| Walmart Inc. | 2.88% | 2.41% | 1.93% | 2.41% | 2.43% | 2.86% | |
| Net Profit Margin, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 2.70% | 2.18% | 2.95% | 2.72% | 2.91% | |
| Net Profit Margin, Industry | |||||||
| Consumer Staples | — | 5.69% | 5.47% | 6.11% | 6.21% | 6.22% | |
Based on: 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), 10-K (reporting date: 2020-08-30).
1 2025 Calculation
Net profit margin = 100 × Net income attributable to Costco ÷ Net sales
= 100 × 8,099 ÷ 269,912 = 3.00%
2 Click competitor name to see calculations.
The financial data indicates a consistent upward trend in the key performance indicators over the observed periods. Net income attributable to the company has shown steady growth each year, rising from $4,002 million to $8,099 million. This represents more than a twofold increase, demonstrating strong profitability expansion.
Net sales have similarly experienced a sustained increase, moving from $163,220 million in the earliest period to $269,912 million in the most recent. This reflects robust revenue growth, likely driven by either increased sales volume, pricing adjustments, or a combination of both factors.
The net profit margin, expressed as a percentage, has exhibited gradual improvement over the years. Starting at 2.45%, it has increased to 3.00%, indicating enhancements in operational efficiency, cost control, or a more favorable sales mix, contributing to a higher proportion of profit relative to net sales.
- Net Income Attributable
- Consistent growth with a more than twofold increase over the six-year span, highlighting strong profitability gains.
- Net Sales
- Steady upward trajectory in sales revenue, signaling effective revenue generation strategies and market demand expansion.
- Net Profit Margin
- Incremental enhancement in profitability margin, suggesting improved cost management or value-added sales mix over time.
Overall, the trends reflect a financially healthy position with increasing revenues and profitability margins, signaling efficient operations and successful growth strategies across the periods analyzed.
Return on Equity (ROE)
Costco Wholesale Corp., ROE calculation, comparison to benchmarks
| Aug 31, 2025 | Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Costco | 8,099) | 7,367) | 6,292) | 5,844) | 5,007) | 4,002) | |
| Total Costco stockholders’ equity | 29,164) | 23,622) | 25,058) | 20,642) | 17,564) | 18,284) | |
| Profitability Ratio | |||||||
| ROE1 | 27.77% | 31.19% | 25.11% | 28.31% | 28.51% | 21.89% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Target Corp. | 27.89% | 30.81% | 24.75% | 54.15% | 30.25% | 27.73% | |
| Walmart Inc. | 21.36% | 18.50% | 15.23% | 16.42% | 16.69% | 19.93% | |
| ROE, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 22.34% | 18.37% | 22.67% | 20.26% | 21.15% | |
| ROE, Industry | |||||||
| Consumer Staples | — | 32.18% | 30.71% | 32.10% | 31.40% | 30.98% | |
Based on: 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), 10-K (reporting date: 2020-08-30).
1 2025 Calculation
ROE = 100 × Net income attributable to Costco ÷ Total Costco stockholders’ equity
= 100 × 8,099 ÷ 29,164 = 27.77%
2 Click competitor name to see calculations.
The financial performance over the periods under review reveals notable trends in profitability and equity management. Net income attributable to the entity demonstrates a consistent upward trajectory, increasing steadily from 4002 million US dollars in 2020 to 8099 million US dollars in 2025. This represents more than a doubling of net income over the six-year span, indicating strong growth in profitability.
Total stockholders’ equity exhibits some variability but an overall increasing pattern. Equity decreased slightly from 18284 million US dollars in 2020 to 17564 million in 2021, before rebounding sharply to reach 29164 million in 2025, the highest level within the timeframe. This suggests that while there may have been some fluctuations, the company has generally enhanced its capital base, possibly through retained earnings or equity issuances outpacing distributions.
The return on equity (ROE) metric, which measures profitability relative to shareholders’ equity, reflects fluctuations within a relatively narrow band. Starting at 21.89% in 2020, ROE peaked at 31.19% in 2024, before moderating to 27.77% in 2025. This volatility in ROE is consistent with the changes in equity levels and indicates effective—but varying over time—utilization of shareholders’ capital to generate profit.
- Net Income
- Consistent and robust growth from 4002 million US dollars in 2020 to 8099 million in 2025, indicating strong earnings performance.
- Total Stockholders’ Equity
- Saw a dip in 2021 but subsequently increased substantially, culminating in an equity base of 29164 million US dollars in 2025.
- Return on Equity (ROE)
- Fluctuated between approximately 22% and 31%, reflecting variable but generally effective deployment of equity capital.
Overall, the data points to a company exhibiting solid earnings growth and a strengthening capital position, with ROE levels suggesting a well-managed balance between profit generation and equity utilization. The improvement in net income outpaces that of equity growth, contributing to generally healthy returns for shareholders over the analyzed time frame.
Return on Assets (ROA)
Costco Wholesale Corp., ROA calculation, comparison to benchmarks
| Aug 31, 2025 | Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Costco | 8,099) | 7,367) | 6,292) | 5,844) | 5,007) | 4,002) | |
| Total assets | 77,099) | 69,831) | 68,994) | 64,166) | 59,268) | 55,556) | |
| Profitability Ratio | |||||||
| ROA1 | 10.50% | 10.55% | 9.12% | 9.11% | 8.45% | 7.20% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Target Corp. | 7.08% | 7.48% | 5.21% | 12.91% | 8.52% | 7.67% | |
| Walmart Inc. | 7.45% | 6.15% | 4.80% | 5.58% | 5.35% | 6.29% | |
| ROA, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 7.15% | 5.68% | 7.29% | 6.30% | 6.62% | |
| ROA, Industry | |||||||
| Consumer Staples | — | 8.89% | 8.28% | 8.95% | 8.75% | 8.24% | |
Based on: 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), 10-K (reporting date: 2020-08-30).
1 2025 Calculation
ROA = 100 × Net income attributable to Costco ÷ Total assets
= 100 × 8,099 ÷ 77,099 = 10.50%
2 Click competitor name to see calculations.
- Net Income Attributable to Costco
- The net income exhibited a consistent upward trajectory over the period analyzed. Beginning at 4,002 million US dollars, it increased annually, reaching 8,099 million US dollars by the end of the latest period. This strong growth indicates improving profitability and effective management of costs and revenues.
- Total Assets
- Total assets also demonstrated a steady increase, rising from 55,556 million US dollars initially to 77,099 million US dollars in the latest period. This growth suggests ongoing investments and expansion in assets, potentially to support operational capacity and long-term business growth.
- Return on Assets (ROA)
- The return on assets showed a notable improvement, starting at 7.2% and increasing to approximately 10.5% by the end of the periods reported. This indicates enhanced efficiency in generating profit from the company's asset base, reflecting better asset utilization and consistent profitability improvements relative to asset growth.
- Summary
- Overall, the financial data reveals a positive trend in key performance indicators. Both net income and total assets grew steadily, with net income growth outpacing asset growth, as evidenced by the increasing ROA. This combination suggests effective operational performance and strategic asset deployment, resulting in improved profitability and financial health over time.