Overview

• Costco shares sit near all-time highs, drawing scrutiny over a rich valuation despite solid execution.
• The company’s profit engine centers on membership fees rather than merchandise margins, with gross margins generally capped around 14% to 15%.
• In fiscal 2025, membership fees generated about $5.3 billion, underpinning net income of $8.1 billion.
• Customer loyalty remains a strength, with renewal rates exceeding 90% in the U.S. and approaching that level globally.
• Costco operates roughly 914 warehouses, opens about 20 to 30 locations annually, and reports strong early international demand, including in China.