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Walmart and Costco are not interchangeable retail stocks: Walmart combines enormous grocery, general-merchandise and e-commerce operations with a smaller membership component, while Costco concentrates its economics around paid warehouse memberships and recurring renewals. The better investment depends on the business model, growth assumptions, valuation you pay and the risks your portfolio can absorb—not on revenue size alone.
The latest annual filings provide a solid operating comparison, but they do not establish which shares are cheaper today. Walmart’s FY2026 ended January 31, 2026; Costco’s FY2026 ended August 30, 2026. Use a same-date price and consistently defined earnings period before making a relative-value call.
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| Name | Best for | Key spec | Checked |
|---|---|---|---|
| Walmart (WMT) | Investors seeking broad retail, grocery and e-commerce exposure at very large scale | FY2026 revenue: $713.163 billion; FY2026 operating income: $29.825 billion; fiscal year ended January 31, 2026 | November 2026 |
| Costco (COST) | Investors who prefer a warehouse-club model tied to membership growth, Executive upgrades and renewals | FY2026 membership-fee revenue grew 11%; fiscal year ended August 30, 2026 | November 2026 |
Prices checked November 2026.
Current share prices, valuation multiples, dividend data and total returns were not established in the cited filings, so the table intentionally does not rank either stock as cheaper.
What is the fundamental difference between Walmart and Costco stock?
Walmart is a diversified retailer. Its sales mix spans grocery, general merchandise, stores, e-commerce and other services, with a reported line called “membership and other income.” Costco is a warehouse club whose membership relationship is central to customer retention and profitability. That distinction affects what an investor should monitor each quarter.
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Walmart’s breadth can spread exposure across shopping categories and channels. It also creates a complex operating machine: grocery usually carries different margins and purchasing patterns than general merchandise, while stores and fulfillment infrastructure require continual execution. Costco’s narrower format is easier to describe, but its economics depend heavily on persuading households to join, upgrade to Executive membership and renew.
Neither model automatically produces the superior stock. A larger company can grow more slowly, and a high-retention membership model can still be overpriced in the market. The investment question is whether the price reflects realistic future earnings and the risks attached to each model.
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What do the latest Walmart and Costco filings show about scale and growth?
Walmart reported total revenue of $713.163 billion in FY2026, up from $680.985 billion in FY2025 and $648.125 billion in FY2024. Operating income was $29.825 billion in FY2026, compared with $29.348 billion in FY2025 and $27.012 billion in FY2024, according to its FY2026 Form 10-K.
| Walmart fiscal year (ended January 31) | Total revenue | Operating income |
|---|---|---|
| FY2026 | $713.163 billion | $29.825 billion |
| FY2025 | $680.985 billion | $29.348 billion |
| FY2024 | $648.125 billion | $27.012 billion |
Walmart also reported $21.893 billion in net income attributable to Walmart and diluted earnings per share of $2.73 for FY2026. Those figures use Walmart’s accounting policies and share-count definitions; compare them with Costco only after confirming that the periods and per-share definitions match.
Costco’s FY2026 filing covers the fiscal year ended August 30, 2026, not the same January-to-January period used by Walmart. The filing reports that membership-fee revenue increased 11% in FY2026. That is a useful indicator of the membership engine, but it is not directly comparable with Walmart’s total-revenue growth and does not, by itself, measure Costco’s total earnings growth. Costco’s reported results and risk disclosures are in its FY2026 Form 10-K.
Because the fiscal year-ends differ by roughly seven months, label every figure with its fiscal period. A chart that places Walmart FY2026 beside Costco FY2026 without dates can look precise while comparing different economic windows.
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How does each company make money from membership?
Costco gives investors a clearer membership-centered lens. Management states that “The extent to which we achieve growth in our membership base, increase the penetration of Executive memberships, and sustain high renewal rates materially influences our profitability.” This is management’s description of a business dependency, not a claim that every dollar of membership-fee revenue becomes profit.
For Costco, track four related questions:
- Is the paid membership base growing?
- Are more members choosing the higher-priced Executive tier?
- Do renewal rates remain high as households reassess spending?
- Can merchandise economics and operating costs support the model while prices remain attractive to members?
Membership fees can provide recurring revenue and help support Costco’s value proposition, but the company still has to sell merchandise profitably and operate warehouses, logistics and digital channels. A slowdown in renewals or upgrades could pressure the profit engine even if warehouse sales remain substantial.
Walmart’s disclosure is less clean for a direct membership comparison. Its “membership and other income” line combines membership with other income, so it should not be treated as a pure membership-fee measure. Investors comparing the companies should keep Costco’s specific membership-fee disclosure separate from Walmart’s broader line item rather than declaring one membership business larger or more profitable from the labels alone.
Which company has the stronger profitability profile?
Walmart’s FY2026 operating income of $29.825 billion on $713.163 billion of revenue implies an operating margin of approximately 4.2% when calculated from the reported figures. The margin is a useful reminder that high sales volume does not equal high profit per dollar of revenue. Grocery, price competition, wages, fulfillment and investments can all affect the amount left after operating expenses.
Costco should be evaluated with the same discipline, using its filing’s operating income, revenue, cash flow and margin definitions for the August 30, 2026 year-end. Do not infer Costco’s margin from membership-fee growth, and do not compare a Costco trailing figure with a Walmart fiscal-year figure without aligning periods.
A practical comparison uses:
- Operating margin: operating income divided by total revenue, calculated on matching or clearly labeled periods.
- Net margin: net income divided by revenue, while checking whether unusual items affect either year.
- Cash conversion: operating cash flow and free cash flow relative to net income, with attention to capital spending and working-capital swings.
- Per-share growth: diluted EPS growth after confirming share-count treatment and fiscal-period alignment.
These measures answer different questions. Margin shows operating economics; cash conversion shows how accounting earnings turn into liquidity; EPS incorporates the effect of share issuance or repurchases. A single favorable ratio should not decide the investment.
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Is Walmart or Costco stock a better buy at today’s price?
The cited filings do not provide a same-date market-price and valuation snapshot, so they cannot support a current “cheaper stock” verdict. To answer that question responsibly, record both closing prices on the same date and calculate multiples using the same earnings convention—such as trailing-12-month diluted EPS for both companies or a clearly identified forward estimate for both.
At minimum, compare:
- Price-to-earnings: specify trailing or forward EPS and the date of the share price.
- Enterprise value to operating measures: define the numerator and whether cash, debt and other obligations are included.
- Free-cash-flow yield: use a consistent free-cash-flow definition and explain major capital-spending changes.
- Growth-adjusted valuation: test whether the premium multiple assumes membership, e-commerce, sales or margin growth that the business may not deliver.
Valuation can dominate business quality. Costco’s membership model may deserve a premium if investors expect durable renewals and profitable growth, but a premium still creates downside if assumptions weaken. Walmart’s scale and diversification may look defensive, but paying too much for a slower-growth earnings stream can also produce disappointing returns.
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Which portfolio goals favor Walmart?
Walmart may fit an investor who wants broad exposure to everyday retail demand, grocery and omnichannel commerce in one company. Its FY2026 revenue scale demonstrates the breadth of the platform, although scale alone is not a forecast of future returns.
Walmart could be the more natural candidate when your thesis depends on:
- continued growth across stores and e-commerce rather than one membership metric;
- consumer spending spread across groceries and general merchandise;
- the company’s ability to use its network and logistics capabilities efficiently;
- accepting a lower-margin, high-volume model in exchange for diversification of retail categories.
That thesis still requires checking execution, labor and fulfillment costs, competitive pricing, changing consumer demand and company-specific risks in the latest filing. Diversification inside the retailer does not eliminate the risk that margins or growth expectations disappoint.
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Which portfolio goals favor Costco?
Costco may fit an investor who specifically wants warehouse-club economics and is comfortable making membership behavior a central part of the thesis. The key evidence to follow is membership-base growth, Executive penetration, renewal rates, merchandise sales and operating-cost discipline—not membership fees in isolation.
Costco could be the more natural candidate when your thesis depends on:
- members renewing because they perceive durable value;
- existing members upgrading to Executive tiers;
- membership growth supporting recurring revenue while warehouses maintain attractive merchandise pricing;
- accepting concentration in a club format rather than broad exposure across retail categories.
Costco’s own filing warns how important membership metrics are to profitability. That dependency can be a strength when retention is resilient and a vulnerability if household budgets, competition or customer satisfaction change.
What risks should you compare before buying either stock?
Read the latest risk sections rather than relying only on historical growth. Both companies face retail competition, execution demands, changing consumer behavior, wage and fulfillment costs, regulation and pressure to keep prices compelling. Company-specific developments can alter the outlook after an annual report is filed.
For Walmart, examine whether sales growth is translating into operating-income and cash-flow growth, how investments affect margins, and whether competitive pricing or consumer mix changes the earnings outlook. Its membership disclosure also requires care because “membership and other income” is not a standalone membership measure.
For Costco, examine renewal and Executive trends, merchandise margins, warehouse expansion and digital execution, along with the sensitivity of profitability to membership behavior. A strong historical renewal rate does not guarantee the same result in a different economic environment.
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External factors can matter too. Tariffs, supply-chain costs, currency movements, interest rates and shifts in discretionary spending can affect retailers differently. Use subsequent filings and current company disclosures for developments after the FY2026 reports; an annual report is authoritative for its reporting period, not a promise about future conditions.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How can you compare Walmart and Costco step by step?
Use this process before assigning either stock a place in your portfolio:
- Write the thesis in one sentence. State whether your expected return depends on broad retail growth, membership expansion, margin improvement, cash generation or a combination.
- Align the dates. Note that Walmart FY2026 ended January 31, 2026 and Costco FY2026 ended August 30, 2026. For market multiples, choose one share-price date and one consistent earnings window.
- Normalize the financials. Collect revenue, operating income, net income, diluted EPS and operating cash flow using each company’s stated definitions. Keep Costco membership-fee revenue separate from Walmart’s combined membership-and-other-income line.
- Measure the operating driver. For Walmart, assess category, channel and margin trends. For Costco, assess membership growth, Executive penetration, renewals and merchandise economics.
- Set a valuation range. Calculate at least one earnings multiple and one cash-flow measure under conservative, base and optimistic assumptions. Do not use a lower multiple as proof of value without considering growth and risk.
- Stress-test the thesis. Ask what happens if consumer demand weakens, costs rise, competition intensifies or membership upgrades slow. Identify the filing disclosure that would show the thesis is failing.
- Decide position size. The stock that fits your portfolio is the one whose business risks and valuation assumptions you can hold through disappointment. Diversification and a predetermined maximum position can limit the damage from a company-specific error.
What common mistakes lead investors to the wrong conclusion?
- Comparing raw revenue as if it were efficiency. Walmart’s $713.163 billion FY2026 revenue reflects a much larger, broader business than Costco’s warehouse-club operation; size is not a return forecast.
- Calling membership fees pure profit. Costco says membership metrics influence profitability, but fees are not identical to net income. Walmart’s disclosed line also includes other income.
- Ignoring fiscal-year mismatch. Walmart’s January 31 year-end and Costco’s August 30 year-end cover different periods.
- Using stale valuation data. A multiple is meaningful only with a clearly stated price date and earnings period.
- Assuming a quality business is always a good investment. Even durable operations can produce poor returns when expectations embedded in the share price are excessive.
- Confusing a company decision with a portfolio decision. The stronger operating model for one investor may not be the right risk exposure for another investor’s existing holdings.
Walmart vs. Costco stock: which retail investment fits your portfolio?
Walmart fits a thesis built around diversified retail scale, grocery, e-commerce and broad consumer exposure. Costco fits a thesis built around warehouse membership, Executive upgrades and high renewals. The filings support those distinctions and show why the companies should not be compared by revenue alone.
The final choice requires a current, same-date valuation analysis that was not established by the cited filings. Compare normalized earnings and cash flow, test each company’s operating drivers and stress the risks before deciding whether either stock deserves a position. That framework produces a portfolio decision tailored to your assumptions rather than a universal winner.
Frequently Asked Questions
Do Walmart and Costco report on the same fiscal calendar?
No. Walmart’s FY2026 ended January 31, 2026, while Costco’s FY2026 ended August 30, 2026. When charting results or calculating growth, label the fiscal year-end beside every figure and avoid presenting the periods as calendar-aligned.
Why can Costco membership growth rise while profits disappoint?
Membership fees are only one part of the economics. Merchandise margins, wages, logistics, warehouse investments and other operating costs can offset stronger fee revenue, so investors should examine operating income and cash flow as well as membership statistics.
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Use share prices from the same date and confirm that both denominators are either trailing diluted EPS or the same type of forward estimate. Also check for unusual earnings items, differing fiscal periods and each company’s share-count definition.
Can owning both stocks improve retail diversification?
Owning both provides exposure to two different retail models, but it does not remove sector or consumer-demand risk. Review how much of your portfolio is already tied to retail, discretionary spending, wages, logistics or membership businesses before adding either position.
