Costco vs Target: Revenue, Profit and Business Model
Costco reported $303.2B of revenue in FY2026 and $9.2B of net income. Target reported $104.8B of revenue in FY2026 and $3.7B of net income.
Latest financial snapshot
Financial summary
Costco
Costco's revenue is almost entirely merchandise: FY2026 net sales were $297.2B and membership fees were $5.907B, together $303.2B. Fees are under 2% of revenue but carry nearly full margin, so they make up a large share of operating income. Net income rose 13.9% to $9.226B ($20.76 per diluted share) from $8.099B in FY2025. Operating cash flow was $15.8B, capital spending was about $6.4B, and management plans about $7.5B of capex in FY2027. Q4 FY2026 included a one-time $0.15 per share benefit from IEEPA tariff refunds. Costco's gross margin is about 11% of sales and SG&A about 9%, a narrow spread that works only because of scale and fast inventory turns.
Target
Target's revenue fell three years in a row, from $109.1 billion in fiscal 2022 to $104.8 billion in fiscal 2025, while FY2025 net income was $3.705 billion. Fiscal 2026 has reversed the trend so far. Q2 FY2026 net sales rose 5.3% to $26.5 billion, comparable sales grew 3.8% on a 3.6% traffic gain, and digital comparable sales rose 8.7% with same-day delivery up more than 25%. Q2 GAAP EPS was $4.11 versus $2.05 a year earlier, but $1.65 of that came from $994 million of pretax tariff refunds; excluding refunds, EPS grew about 20%. Management now guides to roughly 5% net sales growth for fiscal 2026 and EPS of $9.90 to $10.90.
Revenue and profit by year
Costco
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $303.2B | $9.2B | 3.0% | +10.1% | Source |
| FY2025 | $275.2B | $8.1B | 2.9% | +8.2% | Source |
| FY2024 | $254.5B | $7.4B | 2.9% | +5.0% | Source |
| FY2023 | $242.3B | $6.3B | 2.6% | +6.8% | Source |
| FY2022 | $227B | $5.8B | 2.6% | +15.8% | Source |
| FY2021 | $195.9B | $5B | 2.6% | +17.5% | Source |
| FY2020 | $166.8B | $4B | 2.4% | +9.2% | Source |
| FY2019 | $152.7B | $3.7B | 2.4% | +7.9% | Source |
| FY2018 | $141.6B | $3.1B | 2.2% | +9.7% | Source |
| FY2017 | $129B | $2.7B | 2.1% | +8.7% | Source |
| FY2016 | $118.7B | $2.4B | 2.0% | — | Source |
Target
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $104.8B | $3.7B | 3.5% | +0.0% | |
| FY2025 | $104.8B | $3.7B | 3.5% | -1.7% | Source |
| FY2024 | $106.6B | $4.1B | 3.8% | -0.8% | Source |
| FY2023 | $107.4B | $4.1B | 3.9% | -1.6% | Source |
| FY2022 | $109.1B | $2.8B | 2.5% | +2.9% | Source |
| FY2021 | $106B | $6.9B | 6.6% | +13.3% | Source |
| FY2020 | $93.6B | $4.4B | 4.7% | +19.8% | Source |
| FY2019 | $78.1B | $3.3B | 4.2% | +3.7% | Source |
| FY2018 | $75.4B | $2.9B | 3.9% | +3.6% | Source |
| FY2017 | $72.7B | $2.9B | 4.0% | +3.5% | Source |
| FY2016 | $70.3B | $2.7B | 3.9% | — | Source |
Where the revenue comes from
Costco
- Merchandise net sales~98%
Groceries, fresh food, household goods, electronics, gasoline, pharmacy and other goods sold in warehouses and online; $297.2B in FY2026.
- Membership fees~2%
Annual Gold Star, Business and Executive fees; $5.9B in FY2026 and a large share of operating profit despite being under 2% of revenue.
Target
- Stores and digital merchandise
Primary revenue source
Sales of food, essentials, apparel, beauty, home, electronics, toys and seasonal products through stores and digital channels.
- Owned brands
Strategic margin driver
Target-owned and exclusive brands that support margin and differentiation.
- Same-day services and Shipt
Growth and retention stream
Delivery, pickup, Drive Up and Target Circle 360 services that deepen loyalty.
- Roundel retail media
High-margin supplemental stream
Advertising revenue from brands using Target's retail media network.
Business model and strategy
Costco
How it makes money
Costco runs a membership warehouse club: shoppers pay an annual fee ($65 for Gold Star or Business, $130 for Executive in the U.S. and Canada since September 2024) to buy from a tightly edited assortment of roughly 4,000 items. Limited choice means huge volume per item, which gives Costco strong buying power with suppliers.
Growth strategy
Costco grows mostly by itself rather than through acquisitions. It opened 28 warehouses in FY2026 (25 net new) and plans 33 in FY2027, while pushing members to upgrade to Executive, which raises fee income and spending per household. Digital is the fastest-growing channel: digitally enabled sales topped $33B in FY2026 with site and app traffic up about 30%.
Competitive advantage
Costco's advantage is a loop that rivals find hard to copy: membership fees fund low prices, low prices drive renewal (92.3% in the U.S. and Canada in FY2026), and high volume on about 4,000 items earns better supplier terms. Markups capped near 14-15% build price trust, Kirkland Signature gives Costco its own quality benchmark, and high inventory turnover means the company often sells goods before paying suppliers.
Target
How it makes money
Target runs a general-merchandise, big-box retail model that pairs low-margin essentials (groceries, household basics) to drive store traffic with higher-margin discretionary categories (apparel, home decor, and private-label brands) to drive profit -- the classic 'basket size' strategy.
Growth strategy
Target is focusing on merchandising authority, guest experience, technology acceleration, team and community strength, stores-as-hubs, same-day fulfillment, retail media and owned-brand renewal.
Competitive advantage
Target's advantage is the mix of curated merchandise, owned brands, convenient stores, same-day fulfillment and a brand position between discount utility and design-led retail.
Questions about Costco vs Target
Which company has higher revenue — Costco Wholesale Corporation or Target Corporation?
Costco Wholesale Corporation reported $303.2B (FY2026), while Target Corporation reported $104.8B (FY2026). By last reported revenue, Costco Wholesale Corporation is the larger business, with Target Corporation reporting a smaller revenue base.
What is the market cap of Costco Wholesale Corporation vs Target Corporation?
Costco Wholesale Corporation's market capitalisation stands at $397.1B, while Target Corporation's is $72.0B. Costco Wholesale Corporation carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Target Corporation.
Which is more financially efficient — Costco Wholesale Corporation or Target Corporation?
Costco Wholesale Corporation generates $889k / employee in revenue per employee, while Target Corporation generates $252k / employee. Costco Wholesale Corporation shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Costco Wholesale Corporation and Target Corporation make money?
Costco Wholesale Corporation and Target Corporation generate revenue in fundamentally different ways. Costco Wholesale Corporation: Costco runs a membership warehouse club: shoppers pay an annual fee ($65 for Gold Star or Business, $130 for Executive in the U. Target Corporation: Target runs a general-merchandise, big-box retail model that pairs low-margin essentials (groceries, household basics) to drive store traffic with higher-margin discretionary categories (apparel, home decor, and private-label brands) to drive profit -- the classic 'basket size' strategy.
Which company is valued higher relative to revenue — Costco Wholesale Corporation or Target Corporation?
On a price-to-sales (P/S) basis, Costco Wholesale Corporation trades at 1.3x P/S and Target Corporation at 0.7x P/S. Costco Wholesale Corporation commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Target Corporation. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Costco Wholesale Corporation bigger than Target Corporation?
By last reported revenue, Costco Wholesale Corporation ($303.2B (FY2026)) is the larger company compared to Target Corporation ($104.8B (FY2026)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Costco vs Target overview