Costco Wholesale Corporation is the world's largest membership warehouse club operator. Founded in 1983 in Seattle by James Sinegal and Jeffrey Brotman, it merged with Price Club in 1993 and now runs 939 warehouses. In fiscal 2026 it reported $303.2 billion in revenue and $9.23 billion in net income.
How the membership model works
Costco sells goods at markups of about 14-15%, well below typical grocers and department stores. That leaves thin merchandise margins, so annual membership fees ($5.9 billion in FY2026) supply a large share of profit. With 84.1 million paid members and a 92.3% renewal rate in the U.S. and Canada, that fee income is steady and predictable.
A short list of items, sold in huge volume
A typical warehouse stocks about 4,000 items. High volume per item gives Costco strong terms with suppliers, and fast inventory turns mean it often sells goods before it has to pay for them. Pallets on concrete floors, little advertising and lean staffing keep SG&A near 9% of sales.
Kirkland Signature
Kirkland Signature, launched in 1995, is Costco's private-label brand across food, household goods, apparel, wine and health products. It gives members a lower-priced alternative to national brands and gives Costco leverage when negotiating with those brands.
The $1.50 hot dog
The hot dog and soda combo has cost $1.50 since 1985. Costco has held the price through decades of inflation as a public signal that it will not chase short-term margin at members' expense.
Outlook
Costco plans 33 openings in FY2027, including five relocations, and about $7.5 billion of capital spending. Digitally enabled sales passed $33 billion in FY2026, and Executive memberships keep growing faster than total membership. The main risks are slower member growth in North America, cost inflation and tariffs.
