Costco (COST): retail demand exposure

How global shocks reach COST

Costco is filed under Retail, and 1 of the 6 shock types GLOBLVIEW tracks reach it through that sector (trade/tariff). Stories centered on the United States also register as geographic exposure, because Costco is registered in the United States.

Direction is a tendency across cycles, not a forecast. Sector mapping uses the Finnhub industry classification; geography uses country of registration, not revenue by region.

What actually moves Costco

Costco's balance sheet is a poor place to look for rate stress. Long-term debt was $5.8 billion, almost all fixed, with $75 million current. Interest expense was $154 million. Interest income and other was $589 million. A lower short rate can nick that income. The larger rate path is the member: consumer debt and housing affect what people buy, not what Costco owes.

Trade hits merchandise cost. The filing says trade actions have already affected some costs, and that higher tariffs could hurt results depending on the goods, the rates, the timing and how Costco prices in response. Gasoline is the oil channel twice. It was about 10% of net sales, so a higher pump price lifts revenue and lowers the gross margin percentage, while freight costs rise on everything else.

The less obvious concentration is geographic, not a customer. There is no major account. The United States and Canada were 86% of net sales, and California alone was 26% of US net sales. Membership fees were only about 2% of revenue and a large share of profit, which is why a shock that causes people to drop the card matters more than a shock that shaves merchandise margin.

Drawn from the annual filing cited below. Not a forecast and not investment advice.

What Costco sells and where it earns

Costco runs membership warehouses: large, plain stores that each carry fewer than 4,000 active items, sold in bulk at low markups. It operated 914 warehouses at August 31, 2025, most of them in the U.S., Puerto Rico and Canada, with others in Mexico, Japan, the U.K., Korea, Australia, Taiwan, China, Spain, France, Sweden, Iceland and New Zealand. Total revenue for fiscal 2025 was $275.2 billion. Nearly all of it is merchandise sales, but membership fees matter far more than their size suggests: $5.3 billion, about 2% of revenue, against operating income of $10.4 billion. Paid members reached 81.0 million, and renewal rates were 92.3% in the U.S. and Canada and 89.8% worldwide. Food and sundries were $109.6 billion of net sales, non-foods $71.2 billion and fresh foods $38.0 billion. Gasoline, pharmacy, optical, e-commerce and other ancillary businesses added $51.2 billion, with gasoline alone about 10% of net sales. Kirkland Signature, the house brand, is generally priced below national brands and earns higher margins, and Costco expects its share of sales to keep rising.

Customer concentration

There is no customer concentration. Sales are spread across 81.0 million paid members, 38.7 million of them Executive members. The concentration that does matter is geographic: California alone accounted for 26% of U.S. net sales in fiscal 2025.

Debt

Long-term debt was $5.8 billion at August 31, 2025: $5.0 billion of fixed-rate senior notes ($1.0 billion due May 2027, $1.25 billion due June 2027, $1.75 billion due April 2030 and $1.0 billion due April 2032) plus $805 million of other debt. The current portion was $75 million, and interest expense of $154 million was well below $589 million of interest income and other.

Risk factors that moved this year

• Tariffs and trade actions. The risk factors say trade-related actions in various countries have affected the costs of some merchandise and that higher tariffs could hurt results, with the effect depending on the goods, the rates, the timing and how Costco chooses to price in response.
• Dependence on the U.S. and Canada. Those operations were 86% of net sales and 84% of operating income in fiscal 2025, and California alone was 26% of U.S. net sales, so a slowdown in a few markets carries outsized weight.
• Power and water for new sites. The growth risk factor cites rising global demand for electricity and water stress in some regions as reasons Costco may struggle to secure long-term utility contracts for new buildings or face added costs for onsite generation and storage. These are the risks the FY2025 filing foregrounds; they were not compared line by line with the FY2024 10-K.

How this changes the exposure read

Costco sits in consumer staples, and most shocks reach it through prices rather than demand. Oil shocks hit twice: gasoline is about 10% of net sales, so higher pump prices lift revenue while lowering the gross margin percentage, and freight and energy costs rise. Trade and tariff measures raise merchandise costs, and the filing says the damage depends on how much Costco passes on. Rates and credit stress matter little to the balance sheet, with $5.8 billion of debt, but reach members through consumer debt and housing. Currency matters because 27% of net sales comes from outside the U.S. Chip and export rules and conflict risk are indirect.

Source: Costco 10-K, FY2025. Checked 2026-10-05. Figures are from the filing and may differ from the live stats above.

What is moving it now

Key stats

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