COSTNEUTRAL

Gross Margin

12.8%

Updated 534h ago

Sector Performance

6th percentile

COST

12.8%

Sector Median

44.7%

Sector Avg

45.2%

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Deep Analysis

Costco's gross margin of 12.8% means that for every dollar of sales, the company keeps roughly 12.8 cents after paying the direct costs of the goods it sells—a measure of core product profitability.

That figure sits far below the sector median of 43.2%, placing Costco in the 6th percentile among its peers, indicating it operates on unusually thin margins compared to similar companies. Trend data is not available: year-over-year and quarter-over-quarter changes are both listed as N/A, and only a single historical value is provided, so no direction can be assessed. The combination of a very low gross margin with no trend information implies uncertainty—investors cannot determine whether the thin margin is stable, improving, or worsening, adding risk. Because the metric is deeply below the sector norm and lacks observable movement, it contradicts the overall NEUTRAL verdict, leaning toward a more cautious assessment.

Frequently Asked Questions

What does the Gross Margin tell investors about COST?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

Who are COST's closest peers by Gross Margin?

The closest peers by Gross Margin include: EXPD (14.0%), JBHT (12.6%), DVN (12.1%), F (11.9%), GM (11.5%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.