Is the business good?
How good a business is COST?
Costco earns 43% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
43%
Return on invested capital · cost of capital 9.0% · 34 points above what the capital costs: growth creates value
- Operating margin
- 3.9%
Operating margin · Discount Stores median 4.5% · 12 months to Q3 2026
- Cash conversion
- 1.14×
Cash conversion · 0.75× a year ago · every dollar of reported profit arrived as cash, and more
- Share count, year on year
- −0.10%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 3.3% |
| FY2021 | 3.4% |
| FY2022 | 3.4% |
| FY2023 | 3.4% |
| FY2024 | 3.6% |
| FY2025 | 3.8% |
Details›
- Gross margin12 months to Q3 2026
- 13%
- Operating margin12 months to Q3 2026
- 3.9%
- Net margin12 months to Q3 2026
- 3.0%
- Free cash flow margin
- 3.4%
- Revenue, trailing twelve months
- $270.6B
- Free cash flow, trailing twelve months
- $9.23B
- Net income, trailing twelve months
- $8.13B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 43%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Discount Stores
Ranks #8 of 9 by Smart Score