Costco WholesaleSTU:CTO +1.13%97 Operating Margin % is 3.99% as of May. 2026, which is 21% above its 10-year median of 3.31. GuruFocus rates STU:CTO with a GF Score™ of 97/100 and a GF Value™ of €892.55 (Fairly Valued). The stock has 1 warning sign investors should review. Among 310 Retail - Defensive companies, Costco Wholesale ranks better than 55.48% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Costco Wholesale Operating Margin % Related Terms
Costco Wholesale Operating Margin % Historical Data
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The historical data trend for Costco Wholesale's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
STU:CTO vs TGT, DG, DLTR: Operating Margin % Comparison
For the Discount Stores subindustry, Costco Wholesale's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Costco Wholesale Operating Margin % vs Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Costco Wholesale's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Costco Wholesale's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Costco Wholesale's Operating Margin % for the fiscal year that ended in Aug. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Costco Wholesale (STU:CTO) has a Operating Margin % of 3.99% as of May. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Costco Wholesale and its competitors. This is 21% above median its historical median of 3.31. Over the past decade, Costco Wholesale's Operating Margin % has ranged from 3.09 to 3.82. According to the industry distribution chart, Costco Wholesale ranks #138 out of 310 companies in the Retail - Defensive industry, placing it in the top 44.5%.
Is Costco Wholesale's Operating Margin % too high?
Costco Wholesale's current Operating Margin % of 3.99% is 21% above median its 10-year median of 3.31. Over the past 10 years, this metric has ranged from a low of 3.09 to a high of 3.82. The Retail - Defensive industry median Operating Margin % is 3.28. Costco Wholesale's value of 3.99% is 21.8% above this industry median. Based on the distribution chart, Costco Wholesale ranks #138 out of 310 companies in the Retail - Defensive industry, which is above the industry midpoint. Overall, Costco Wholesale has a GF Score™ of 97/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Costco Wholesale's Operating Margin % compare to TGT and DG?
According to the Retail - Defensive industry distribution chart, Costco Wholesale ranks #138 out of 310 companies for Operating Margin %. This puts Costco Wholesale in the upper half of its industry. The industry median Operating Margin % is 3.28. Costco Wholesale's value of 3.99% is 21.8% above this benchmark. Historically, Costco Wholesale's own Operating Margin % has ranged from 3.09 to 3.82 over the past decade. While the company's 10-year median is 3.31 vs. the industry median of 3.28, Costco Wholesale has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Retail - Defensive company?
The median Operating Margin % among Retail - Defensive companies is 3.28, based on 310 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Costco Wholesale's current Operating Margin % of 3.99% is 21.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Costco Wholesale and its competitors. For the Retail - Defensive industry, the median Operating Margin % is 3.28 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Costco Wholesale's current Operating Margin % is 3.99%, which is 21% above median its own 10-year median of 3.31. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Costco Wholesale stock overvalued right now?
Based on GuruFocus' analysis, Costco Wholesale (STU:CTO) is currently considered Fairly Valued. The stock's GF Value™ is €892.55, compared to a current price of €842.20 — trading 5.6% below its estimated fair value. The current Operating Margin % is 3.99%, which is 21% above median its 10-year median of 3.31 and 21.8% above the Retail - Defensive industry median of 3.28. Costco Wholesale's overall GF Score™ is 97/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Costco Wholesale (STU:CTO), the current Operating Margin % is 3.99% as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Costco Wholesale (STU:CTO) Overvalued in 2026?
Based on GuruFocus' analysis, Costco Wholesale stock appears to be undervalued.
The current stock price of €842.20 is trading 5.6% below its estimated GF Value™ of €892.55.
GuruFocus considers Costco Wholesale to be Fairly Valued.
Key valuation signals for STU:CTO:
Operating Margin %: 3.99% (21% above median its 10-year median of 3.31)
GF Value™: €892.55 vs. price of €842.20 (5.6% below fair value)
Industry Position: 21.8% above the Retail - Defensive median (#138 of 310)
No single metric tells the full story. See the STU:CTO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Founded in 1983, Costco Wholesale now operates a global chain of membership-based warehouse clubs, delivering high-quality goods and services at consistently low prices. As of its most recent fiscal year, Costco operated approximately 910 warehouses, serving more than 80 million members across its three geographic segments: Costco US (approximately 73% of total revenue), Costco Canada (13%), and Costco International (14%).Costco's core value proposition—quality products at unbeatable prices—has yielded consistently strong member renewal rates (93% in the US and Canada and nearly 90% internationally). About 55% of Costco's fiscal 2025 revenue came from its grocery offerings, and another 25% from general merchandise.
97GF Score
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