FULLTEXT DEL 2 AV 2

10-K – 2025-10-08 – cost-20250831.htm

Note 4—Debt
Short-Term Borrowings
The Company maintains various short-term bank credit facilities, with a borrowing capacity of $ 1,220 and $ 1,198 , in 2025 and 2024. Short-term borrowings outstanding were immaterial at the end of 2025 and 2024.
Long-Term Debt
The Company's long-term debt consists primarily of Senior Notes, described below. The Company at its option may redeem the Senior Notes at any time, in whole or in part, at a redemption price plus accrued interest. The redemption price is equal to the greater of 100 % of the principal amount or the sum of the present value of the remaining scheduled payments of principal and interest to maturity. Additionally, upon certain events, a holder has the right to require a repurchase at a price of 101 % of the principal amount plus accrued and unpaid interest. Interest on all outstanding long-term debt is payable semi-annually. The estimated fair value of Senior Notes is valued using Level 2 inputs.
Other long-term debt consists of Guaranteed Senior Notes issued by the Company's Japanese subsidiary, valued using Level 3 inputs. In 2024, the Company’s Japan subsidiary issued four Guaranteed Senior Notes, totaling approximately $ 500 , at fixed interest rates ranging from 1.400 % to 2.120 %. Interest is payable semi-annually, and maturity dates range from November 2033, to November 2043. In 2025, 2024, and 2023 the Japanese subsidiary repaid $ 103 , $ 77 , and $ 75 of its Guaranteed Senior Notes.
In 2024, the Company repaid the $ 1,000 outstanding principal balance on its 2.750 % Senior Notes.
At the end of 2025 and 2024, the fair value of the Company's long-term debt, including the current portion, was approximately $ 5,370 and $ 5,412 . The carrying value of long-term debt consisted of the following:

2025 2024
3.000 % Senior Notes due May 2027
$ 1,000 $ 1,000
1.375 % Senior Notes due June 2027
1,250 1,250
1.600 % Senior Notes due April 2030
1,750 1,750
1.750 % Senior Notes due April 2032
1,000 1,000
Other long-term debt 805 919
Total long-term debt 5,805 5,919
Less unamortized debt discounts and issuance costs 17 22
Less current portion (1)
75 103
Long-term debt, excluding current portion $ 5,713 $ 5,794
_____________
(1) Net of unamortized debt discounts and issuance costs and included in other current liabilities in the accompanying consolidated balance sheets.
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Maturities of long-term debt during the next five fiscal years and thereafter are as follows:

2026 $ 75
2027 2,250
2028 —
2029 148
2030 1,750
Thereafter
1,582
Total
$ 5,805

Note 5—Leases
Information regarding the Company's lease assets and liabilities were as follows:

2025 2024
Assets
Operating lease right-of-use assets $ 2,725 $ 2,617
Finance lease assets (1)
1,488 1,433
Total lease assets $ 4,213 $ 4,050
Liabilities
Current
Operating lease liabilities (2)
$ 208 $ 179
Finance lease liabilities (2)
78 147
Long-term
Operating lease liabilities 2,460 2,375
Finance lease liabilities (3)
1,401 1,351
Total lease liabilities $ 4,147 $ 4,052

_______________
(1) Included in other long-term assets in the consolidated balance sheets.
(2) Included in other current liabilities in the consolidated balance sheets.
(3) Included in other long-term liabilities in the consolidated balance sheets.

2025 2024
Weighted-average remaining lease term (years)
Operating leases
20 19
Finance leases
25 23
Weighted-average discount rate
Operating leases
3.05 % 2.67 %
Finance leases
4.63 % 4.59 %

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The components of lease expense, excluding short-term lease costs and sublease income (which were immaterial), were as follows:

2025 2024 2023
Operating lease costs (1)
$ 271 $ 284 $ 309
Finance lease costs:
Amortization of lease assets (1)
102 97 169
Interest on lease liabilities (2)
63 58 54
Variable lease costs (1)
182 163 160
Total lease costs $ 618 $ 602 $ 692

_______________
(1) Included in selling, general and administrative expenses and merchandise costs in the consolidated statements of income.
(2) Included in interest expense and merchandise costs in the consolidated statements of income.
Supplemental cash flow information related to leases were as follows:

2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows — operating leases $ 255 $ 274 $ 287
Operating cash flows — finance leases
58 58 54
Financing cash flows — finance leases
147 136 291
Operating lease assets obtained in exchange for new or modified leases 294 125 202
Finance lease assets obtained in exchange for new or modified leases 131 200 100

As of August 31, 2025, future minimum payments during the next five fiscal years and thereafter are as follows:

Operating Leases (1)
Finance Leases
2026 $ 267 $ 133
2027 250 132
2028 235 135
2029 204 122
2030 184 109
Thereafter 2,451 1,780
Total (2)
3,591 2,411
Less amount representing interest 923 932
Present value of lease liabilities $ 2,668 $ 1,479

_______________
(1) Operating lease payments have not been reduced by expected future sublease income of $ 92 .
(2) Excludes $ 1,094 of lease payments for leases that have been signed but not commenced.
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Note 6—Equity
Dividends
Cash dividends declared in 2025 totaled $ 2,183 or $ 4.92 per share, as compared to $ 8,589 or $ 19.36 per share in 2024. Dividends in 2024 included a special dividend of $ 15 per share, resulting in a payment of approximately $ 6,655 . The Company's current quarterly dividend rate is $ 1.30 per share.
Stock Repurchase Programs
The Company's stock repurchase program is conducted under a $ 4,000 authorization by the Board of Directors, which expires in January 2027. As of the end of 2025, the remaining amount available under the authorization was $ 1,962 . The following table summarizes the Company’s stock repurchase activity:

Shares
Repurchased
(000’s) Average
Price per
Share Total Cost
2025 943 $ 957.66 $ 903
2024 1,004 695.29 698
2023 1,341 504.68 677

These amounts may differ from repurchases of common stock in the consolidated statements of cash flows due to changes in unsettled stock repurchases at the end of each fiscal year. Purchases are made from time to time, as conditions warrant, in the open market or in block purchases and pursuant to plans under SEC Rule 10b5-1.

Note 7—Stock-Based Compensation
The 2019 Incentive Plan authorizes the issuance of up to 15,885,000 RSUs. The number of RSUs that may be granted under this Plan is subject to adjustments for changes in capital structure. The Company issues new shares of common stock upon vesting and settlement of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares withheld for taxes.
Summary of Restricted Stock Unit Activity
At the end of 2025, 6,275,000 shares were available to be granted as RSUs, and the following awards were outstanding:
• 2,187,000 time-based RSUs, which vest upon continued employment or service over specified periods of time; and
• 121,000 performance-based RSUs, of which 70,000 were granted to executive officers subject to the determination of the attainment of performance targets for 2025, which occurred in September 2025. At that time, a portion vested as a result of executive officers who met accelerated vesting provisions. The remaining awards vest upon continued employment over specified periods of time. Please refer to Note 1 for accelerated vesting requirements.
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The following table summarizes RSU transactions during 2025:

Number of
Units
(in 000’s) Weighted-Average
Grant Date Fair
Value
Outstanding at the end of 2024 2,799 $ 463.24
Granted 1,095 883.46
Vested and delivered ( 1,494 ) 558.05
Forfeited ( 92 ) 567.87

Outstanding at the end of 2025 2,308 $ 597.00

The weighted-average grant date fair value of RSUs granted was $ 883.46 , $ 547.26 , and $ 471.47 in 2025, 2024, and 2023. The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2025 was $ 897 and the weighted-average period of time over which this cost will be recognized is 1.6 years. Included in the outstanding balance at the end of 2025 were approximately 766,000 RSUs vested but not yet delivered.
Summary of Stock-Based Compensation
The following table summarizes stock-based compensation expense and the related tax benefits:

2025 2024 2023
Stock-based compensation expense $ 860 $ 818 $ 774
Less recognized income tax benefit
183 173 163
Stock-based compensation expense, net $ 677 $ 645 $ 611

Note 8—Taxes
Income Taxes
Income before income taxes is comprised of the following:

2025 2024 2023
Domestic $ 8,324 $ 7,255 $ 6,264
Foreign 2,494 2,485 2,223
Total $ 10,818 $ 9,740 $ 8,487

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The provisions for income taxes are as follows:

2025 2024 2023
Federal:
Current $ 1,395 $ 1,245 $ 1,056
Deferred ( 42 ) 48 33
Total federal 1,353 1,293 1,089
State:
Current 449 431 374
Deferred ( 18 ) ( 77 ) 10
Total state 431 354 384
Foreign:
Current 955 798 732
Deferred ( 20 ) ( 72 ) ( 10 )
Total foreign 935 726 722
Total provision for income taxes $ 2,719 $ 2,373 $ 2,195

The reconciliation between the statutory tax rate and the effective rate for 2025, 2024, and 2023 is as follows:

2025 2024 2023
Federal taxes at statutory rate $ 2,272 21.0 % $ 2,045 21.0 % $ 1,782 21.0 %
State taxes, net 338 3.1 288 3.0 302 3.6
Foreign taxes, net 222 2.1 109 1.1 160 1.9
Employee stock ownership plan (ESOP) ( 28 ) ( 0.3 ) ( 120 ) ( 1.2 ) ( 25 ) ( 0.3 )
Other ( 85 ) ( 0.8 ) 51 0.5 ( 24 ) ( 0.3 )
Total $ 2,719 25.1 % $ 2,373 24.4 % $ 2,195 25.9 %

The Company's effective tax rate in 2025, 2024, and 2023 included tax benefits of $ 100 , $ 45 , and $ 54 , related to stock compensation. In 2024, tax benefits also included $ 94 related to the portion of the special dividend payable through the Company's 401(k) plan and a net non-recurring tax benefit of $ 63 related to a transfer pricing settlement and certain true-ups of tax reserves.
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The components of the deferred tax assets (liabilities) are as follows:

2025 2024
Deferred tax assets:
Equity compensation $ 100 $ 96
Deferred income/membership fees 369 313
Foreign tax credit carry forward 390 315
Operating lease liabilities 699 678
Accrued liabilities and reserves 917 873

Total deferred tax assets 2,475 2,275
Valuation allowance ( 554 ) ( 494 )
Total net deferred tax assets 1,921 1,781
Deferred tax liabilities:
Property and equipment ( 944 ) ( 948 )
Merchandise inventories ( 305 ) ( 296 )
Operating lease right-of-use assets ( 670 ) ( 652 )
Foreign branch deferreds ( 103 ) ( 105 )
Other ( 31 ) ( 1 )
Total deferred tax liabilities ( 2,053 ) ( 2,002 )
Net deferred tax liabilities $ ( 132 ) $ ( 221 )

The deferred tax accounts at the end of 2025 and 2024 include deferred income tax assets of $ 592 and $ 548 , included in other long-term assets; and deferred income tax liabilities of $ 724 and $ 769 , included in other long-term liabilities.
In 2025 and 2024, the Company had valuation allowances of $ 554 and $ 494 , primarily related to foreign tax credits that the Company believes will not be realized due to carry forward limitations. The foreign tax credit carry forwards are set to expire beginning in fiscal 2030.
The Company generally no longer considers fiscal year earnings of non-U.S. consolidated subsidiaries (other than China) indefinitely reinvested after 2023, in the case of Taiwan, and after 2017, in the case of all other subsidiaries, and has recorded the estimated incremental foreign withholding taxes (net of available foreign tax credits) and state income taxes payable assuming a hypothetical repatriation to the U.S. The Company considers undistributed earnings of certain non-U.S. consolidated subsidiaries, which totaled $ 3,177 , to be indefinitely reinvested and has not provided for withholding or state taxes.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2025 and 2024 is as follows:

2025 2024
Gross unrecognized tax benefit at beginning of year $ 81 $ 16
Gross increases—current year tax positions 9 3
Gross increases—tax positions in prior years 14 64
Gross decreases—tax positions in prior years ( 38 ) —
Gross decreases—settlements ( 1 ) —
Lapse of statute of limitations — ( 2 )
Gross unrecognized tax benefit at end of year $ 65 $ 81

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The gross unrecognized tax benefit includes tax positions for which the ultimate deductibility is highly certain but there is uncertainty about the timing of such deductibility. At the end of 2025 and 2024, these amounts were immaterial. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of these tax positions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority. The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $ 65 and $ 79 at the end of 2025 and 2024.
Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. Accrued interest and penalties recognized during 2025 and 2024, and accrued at the end of each respective period were immaterial.
The Company is currently under audit by several jurisdictions in the U.S. and abroad. Some audits may conclude in the next 12 months, and the unrecognized tax benefits recorded in relation to the audits may differ from actual settlement amounts. It is not practical to estimate the effect, if any, of any amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits. The Company does not anticipate that there will be a material increase or decrease in the total amount of unrecognized tax benefits in the next 12 months.
The Company files income tax returns in the U.S., various state and local jurisdictions, in Canada, and in several other foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local examination for years before fiscal 2018. The Company is currently subject to examination in California for fiscal years 2013 to present.
Other Taxes
The Company is subject to multiple examinations for value added, sales-based, payroll, product, import or other non-income taxes in various jurisdictions. In certain cases, the Company has received assessments from the authorities. Possible losses or range of possible losses associated with these matters are either immaterial or an estimate of the possible loss or range of loss cannot be made at this time. If certain matters or a group of matters were to be decided adversely to the Company, it could result in a charge that might be material to the results of an individual fiscal quarter or year.

Note 9—Net Income per Common and Common Equivalent Share
The following table shows the amounts used in computing net income per share and the weighted average number of shares of basic and of potentially dilutive common shares outstanding (shares in 000’s):

2025 2024 2023
Net income
$ 8,099 $ 7,367 $ 6,292
Weighted average basic shares
443,985 443,914 443,854
RSUs 818 845 598
Weighted average diluted shares
444,803 444,759 444,452

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated based on the dilutive effect of RSUs using the treasury stock method.

Note 10—Commitments and Contingencies
Legal Proceedings
The Company is involved in many claims, proceedings and litigations arising from its business and property ownership. In accordance with accounting guidance, the Company establishes an accrual for legal proceedings if and when those matters present loss contingencies that are both probable and
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reasonably estimable. There may be actual losses in excess of amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss (taking into account where applicable indemnification arrangements concerning suppliers and insurers) and the accrued amount, if any, thereof, and adjusts the amount as appropriate. The Company has recorded an immaterial accrual with respect to some matters described below, in addition to other immaterial accruals for matters not described below. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but monitors for developments that make the contingency both probable and reasonably estimable. In each case, there is a reasonable possibility that a loss may be incurred, including a loss in excess of the applicable accrual. For matters where no accrual has been recorded, the possible loss or range of loss (including any loss in excess of the accrual) cannot, in the Company's view, be reasonably estimated because, among other things: the remedies or penalties sought are indeterminate or unspecified; the legal and/or factual theories are not well developed; and/or the matters involve complex or novel legal theories or a large number of parties.
In November 2023, a former employee filed a class action against the Company alleging claims under California law for failure to pay minimum wage, failure to pay overtime, failure to provide meal and rest breaks, failure to provide accurate wage statements, failure to reimburse expenses, failure to pay wages when due, and failure to pay sick pay. Martin Reyes v. Costco Wholesale Corporation, Sacramento County Superior Court (No. 23cv011351), removed to federal court, No. 2:24-cv-00300 (E.D. Cal.). A second amended complaint was filed, which the Company has moved to dismiss. In January 2024, the same plaintiff filed a related Private Attorneys General Act (PAGA) representative action, seeking civil penalties and asserting the same alleged underlying Labor Code violations and an additional suitable seating claim. In May 2024, the plaintiff filed an amended PAGA complaint; the Company has denied the material allegations of the complaint and filed a motion to stay the action. The motion was granted on December 18, 2024.
In August 2024, an employee filed an action under PAGA against the Company, alleging claims for penalties for various alleged violations of the California Labor Code. Nader v. Costco (No. CV-24-006198; Stanislaus County Superior Court). An amended complaint was filed in November 2024. In February 2025 the court granted the Company’s motion to strike portions of the complaint. The plaintiff filed a further amended complaint; the Company's motion to strike a portion of this complaint was granted on May 13, 2025.
Beginning in December 2017, the United States Judicial Panel on Multidistrict Litigation consolidated numerous cases concerning the impacts of opioid abuses filed against various defendants by counties, cities, hospitals, Native American tribes, third-party payors, and others. In re National Prescription Opiate Litigation (MDL No. 2804) (N.D. Ohio). Included are cases filed against the Company by counties and cities in Michigan, New Jersey, Oregon, Virginia and South Carolina, a third-party payor in Ohio, and a hospital in Texas, class actions filed on behalf of infants born with opioid-related medical conditions in 40 states, and class actions and individual actions filed on behalf of individuals seeking to recover alleged increased insurance costs associated with opioid abuse in 43 states and American Samoa. Claims against the Company filed in federal court outside the MDL by one county in Georgia are pending, and claims filed by certain cities and counties in New York are pending in state court, as are claims by certain county district attorneys in Pennsylvania. Claims against the Company in state courts in New Jersey, Oklahoma, Utah, and Arizona have been dismissed. Claims against the Company in federal court in Georgia and Florida have been dismissed. The Company is defending all of the pending matters except for a small number that have been resolved for immaterial amounts.
Between September 25 and October 31, 2023, five class action suits were filed against the Company alleging privacy law violations stemming from pixel trackers on Costco.com: Birdwell v. Costco Wholesale Corp., No. C23-02416, Contra Costa County Superior Court; and Scott v. Costco Wholesale Corp., No. 2:23-cv-08808 (C.D. Cal.), now consolidated with R.S. v. Costco Wholesale Corp., No. 2:23-cv-01628 (W.D. Wash.); Groves, et ano., v. Costco Wholesale Corp., No. 2:23-cv-01662 (W.D. Wash.), and Castillo v. Costco Wholesale Corp., under No. 2:34-cv-01548 (W.D. Wash.). The Castillo plaintiffs filed a consolidated complaint on January 26, 2024, which seeks damages, equitable relief and attorneys’ fees
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under various statutes, including the Washington Consumer Protection Act, Washington Privacy Act, Washington Uniform Health Care Information Act, Electronic Communications Privacy Act, California Invasion of Privacy Act, and California Confidentiality of Medical Information Act. The consolidated complaint also alleges breach of implied contract, invasion of privacy, conversion, and unjust enrichment. The Company filed a motion to dismiss the Castillo complaint on March 11, 2024. In November 2024 the court denied the motion to dismiss in substantial part. On May 16, 2024, the parties stipulated to stay Birdwell pending resolution of Castillo. On January 2, and August 22, 2024, the Company received related civil investigative demands from the Washington Attorney General's Office. On January 3, 2024, the Company received a related pre-litigation letter from the Los Angeles Office of the County Counsel. The Company is in the process of responding to both agencies.
On June 20, 2024, a class-action lawsuit was filed against the Company and Nice-Pak Products, Inc., alleging that Kirkland Signature Fragrance Free Baby Wipes contain 3.7 parts per billion of per-and polyfluoroalkyl substances. The complaint alleges that the label claim that the wipes are “made with naturally derived ingredients” thus violates various state consumer protection and false advertising laws. The complaint seeks unspecified damages, including punitive damages, as well as equitable relief and attorneys' fees and costs. The defendants filed a motion to dismiss on August 9, 2024. Bullard, et ano., v. Costco Wholesale Corp., et ano., No. 3:24-cv-03714 (N.D. Cal.). On February 14, 2025, the court granted the motion. An amended complaint was filed; defendants' motion to dismiss this complaint was denied on May 14, 2025.
In January 2023 the Company received a Civil Investigative Demand from the U.S. Attorney's Office, Western District of Washington, requesting documents. The government is conducting a False Claims Act investigation concerning whether the Company presented or caused to be presented to the federal government for payment false claims relating to prescription medications.
In May 2024 the Company received a Notice of Intent to File Administrative Complaint for Violations of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) from the U.S. Environmental Protection Agency (EPA). The EPA is seeking administrative fines for importation, sale and distribution of misbranded devices and unregistered products the government asserts are pesticides under FIFRA. An agreement has been reached to settle the matter for an immaterial amount.
The Company does not believe that any pending claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows; it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual fiscal quarter or year.
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Note 11—Segment Reporting
The Company is principally engaged in the operation of membership warehouses through wholly owned subsidiaries in the U.S., Canada, Mexico, Japan, the U.K., Korea, Australia, Taiwan, China, Spain, France, Sweden, Iceland, and New Zealand. Reportable segments are largely based on management’s organization of the operating segments for operational decisions and assessments of financial performance, which considers geographic locations. The material accounting policies of the segments are as described in Note 1 . Inter-segment net sales and expenses, including royalties, have been eliminated in computing total revenue and operating income.
The chief operating decision maker (CODM) is the Company's Chief Executive Officer, President and Director. The CODM utilizes operating income, as reported in the consolidated statement of income, along with internal management reports, in evaluating performance and allocating resources.
The following table provides the revenue, significant expenses, and operating income for the Company's reportable segments:

2025 2024 2023
United States
Total revenue $ 200,046 $ 184,143 $ 176,630
Merchandise costs 174,021 160,573 154,858
Selling, general and administrative expenses 19,147 17,353 16,380
Operating income $ 6,878 $ 6,217 $ 5,392
Canada
Total revenue $ 36,923 $ 34,874 $ 33,056
Merchandise costs 32,204 30,543 29,019
Selling, general and administrative expenses 2,870 2,683 2,589
Operating income $ 1,849 $ 1,648 $ 1,448
Other International
Total revenue $ 38,266 $ 35,436 $ 32,604
Merchandise costs 33,661 31,242 28,709
Selling, general and administrative expenses 2,949 2,774 2,621
Operating income $ 1,656 $ 1,420 $ 1,274
Total
Total revenue $ 275,235 $ 254,453 $ 242,290
Merchandise costs 239,886 222,358 212,586
Selling, general and administrative expenses 24,966 22,810 21,590
Operating income 10,383 9,285 8,114
Other income (1)
435 455 373
Income before income taxes $ 10,818 $ 9,740 $ 8,487
____________
(1) Other income consists of interest expense and interest income and other, net.
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The following table provides depreciation and amortization and other asset related information for the Company's reportable segments:

2025 2024 2023
United States
Depreciation and amortization $ 1,895 $ 1,730 $ 1,599
Additions to property and equipment 4,215 3,725 3,288
Property and equipment, net 22,790 20,638 18,760
Total assets 54,862 48,816 49,189
Canada
Depreciation and amortization $ 196 $ 192 $ 183
Additions to property and equipment 580 351 281
Property and equipment, net 2,930 2,602 2,443
Total assets 7,304 6,915 6,420
Other International
Depreciation and amortization $ 335 $ 315 $ 295
Additions to property and equipment 703 634 754
Property and equipment, net 6,189 5,792 5,481
Total assets 14,933 14,100 13,385
Total
Depreciation and amortization $ 2,426 $ 2,237 $ 2,077
Additions to property and equipment 5,498 4,710 4,323
Property and equipment, net 31,909 29,032 26,684
Total assets 77,099 69,831 68,994

Disaggregated Revenue
The following table summarizes net sales by merchandise category; sales from e-commerce sites and business centers have been allocated to the applicable merchandise categories:

2025 2024 2023
Foods and Sundries
$ 109,564 $ 101,463 $ 96,175
Non-Foods
71,190 63,973 60,865
Fresh Foods
37,988 34,220 31,977
Warehouse Ancillary and Other Businesses
51,170 49,969 48,693
Total net sales
$ 269,912 $ 249,625 $ 237,710

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Item 9—Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Item 9A—Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. The Chief Executive Officer and the Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of August 31, 2025, and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of August 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013).
Based on its assessment, management has concluded that our internal control over financial reporting was effective as of August 31, 2025. The attestation of KPMG LLP, our independent registered public accounting firm, on the effectiveness of our internal control over financial reporting is included with the consolidated financial statements in Item 8 of this Report.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Item 9B—Other Information
During the fiscal quarter ended August 31, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 9C—Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.

PART III

Item 10—Directors, Executive Officers and Corporate Governance
Information relating to the availability of our code of ethics for senior financial officers and a list of our executive officers appear in Part I, Item 1 of this Report. The information required by this Item concerning our directors and nominees for director is incorporated herein by reference to the sections entitled “Proposal 1: Election of Directors,” “Directors,” “Director Biographies,” and “Committees of the Board” in Costco’s Proxy Statement for its 2026 annual meeting of shareholders, which will be filed with the SEC within 120 days of the end of our fiscal year (“Proxy Statement”). We have adopted an Insider Trading Policy governing the purchase, sale and other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations and any applicable listing standards. A copy of our policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

Item 11—Executive Compensation
The information required by this Item is incorporated herein by reference to the sections entitled “Compensation of Directors” and “Executive Compensation” in Costco’s Proxy Statement.

Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is incorporated herein by reference to the section entitled “Principal Shareholders” and “Equity Compensation Plan Information” in Costco’s Proxy Statement.

Item 13—Certain Relationships and Related Transactions, and Director Independence
The information required by this Item is incorporated herein by reference to the sections entitled “Certain Relationships and Transactions” and "Committees of the Board" in Costco’s Proxy Statement.

Item 14—Principal Accounting Fees and Services
Our independent registered public accounting firm is KPMG LLP , Seattle, WA , Auditor Firm ID: 185 .
The information required by this Item is incorporated herein by reference to the sections entitled “Independent Public Accountants” in Costco’s Proxy Statement.
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PART IV

Item 15—Exhibits, Financial Statement Schedules
(a) Documents filed as part of this report are as follows:
1. Financial Statements:
See the listing of Financial Statements included as a part of this Form 10-K in Item 8 of Part II.
2. Financial Statement Schedules:
All schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements, including the notes thereto.
(b) Exhibits: The required exhibits are filed or furnished as part of this Annual Report on Form 10-K or are incorporated herein by reference.

Incorporated by Reference
Exhibit
Number Exhibit Description Filed
Herewith Form Period Ended Filing Date

3.1 Articles of Incorporation as amended of Costco Wholesale Corporation
10-K 8/28/2022 10/5/2022

3.2 Bylaws as amended of Costco Wholesale Corporation
8-K 9/20/2024

4.1 First Supplemental Indenture between Costco Wholesale Corporation and U.S. Bank National Association, as Trustee, dated as of March 20, 2002 (incorporated by reference to Exhibits 4.1 and 4.2 to the Company's Current Report on the Form 8-K filed on March 25, 2002)
8-K 3/25/2002

4.2 Form of 1.375% Senior Notes due June 20, 2027
8-K 4/17/2020

4.3 Form of 1.600% Senior Notes due April 20, 2030
8-K 4/17/2020

4.4 Form of 1.750% Senior Notes due April 20, 2032
8-K 4/17/2020

4.5 Form of 2.750% Senior Notes due May 18, 2024
8-K 5/16/2017

4.6 Form of 3.000% Senior Notes due May 18, 2027
8-K 5/16/2017

4.7 Description of Common Stock
10-K 8/28/2022 10/5/2022

10.1* Costco Wholesale Executive Health Plan
10-K 9/2/2012 10/19/2012

10.2* 2019 Incentive Plan
DEF 14 12/17/2019

10.3* Seventh Restated 2002 Stock Incentive Plan
DEF 14A 12/19/2014

Table of Contents

Incorporated by Reference
Exhibit
Number Exhibit Description Filed
Herewith Form Period Ended Filing Date

10.3.1* 2019 Stock Incentive Plan Restricted Stock Unit Award Agreement-Employee
10-Q 11/24/2019 12/23/2019

10.3.2* 2019 Stock Incentive Plan Restricted Stock Unit Award Agreement - Non-U.S. Employee
10-Q 11/24/2019 12/23/2019

10.3.3* 2019 Stock Incentive Plan Restricted Stock Unit Award Agreement-Non-Executive Director
10-Q 11/24/2019 12/23/2019

10.3.4* 2019 Stock Incentive Plan Letter Agreement for 2020 Performance-Based Restricted Stock Units-Executive
10-Q 11/24/2019 12/23/2019

10.4* Fiscal 2025 Executive Bonus Plan
8-K 11/7/2024

10.5* Executive Employment Agreement effective January 1, 2024, between Ron Vachris and Costco Wholesale Corporation
10-Q 11/26/2023 12/20/2023

10.5.1* Executive Employment Agreement effective January 1, 2025, between Ron Vachris and Costco Wholesale Corporation
10-Q 11/24/2024 12/19/2024

10.6 Form of Indemnification Agreement
14A 12/13/1999

10.7* Deferred Compensation Plan
10-K 9/1/2013 10/16/2013

10.8 #
Citibank, N.A. Co-Branded Credit Card Agreement and amendments 1 through 13
10-Q 2/16/2025 3/13/2025

19.1 Insider Trading Policy
10-K 9/1/2024 10/9/2024

97.1 Costco Wholesale Corporation Incentive Compensation Clawback Policy
10-K 9/1/2024 10/9/2024

21.1 Subsidiaries of the Company
x

23.1 Consent of Independent Registered Public Accounting Firm
x

31.1 Rule 13a – 14(a) Certifications
x

32.1** Section 1350 Certifications

101.INS Inline XBRL Instance Document x

101.SCH Inline XBRL Taxonomy Extension Schema Document x

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document x

Table of Contents

Incorporated by Reference
Exhibit
Number Exhibit Description Filed
Herewith Form Period Ended Filing Date
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document x

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document x

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document x

104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) x

_____________________
* Management contract, compensatory plan or arrangement.
** Furnished herewith
# Certain information in this exhibit has been omitted because it is (i) immaterial and (ii) customarily and actually treated by the registrant as private or confidential.
(c) Financial Statement Schedules—None.

Item 16—Form 10-K Summary
None.
68

Table of Contents

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
October 7, 2025

C OSTCO W HOLESALE C ORPORATION
(Registrant)

By /s/ G ARY M ILLERCHIP

Gary Millerchip
Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
October 7, 2025

By /s/ R ON M. V ACHRIS
By /s/ H AMILTON E. J AMES

Ron M. Vachris
Chief Executive Officer, President and Director
Hamilton E. James
Chairman of the Board

By /s/ G ARY M ILLERCHIP
By /s/ T IFFANY M . B ARBRE

Gary Millerchip
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Tiffany M. Barbre
Senior Vice President and Corporate Controller
(Principal Accounting Officer)

By /s/ S USAN L. D ECKER
By /s/ K ENNETH D. D ENMAN

Susan L. Decker
Director
Kenneth D. Denman
Director

By /s/ H ELENA B. F OULKES
/s/ S ALLY J EWELL

Helena B. Foulkes
Director
Sally Jewell
Director

By /s/ J EFFREY S. R AIKES
By /s/ J OHN W. S TANTON

Jeffrey S. Raikes
Director
John W. Stanton
Director

By /s/ M ARY (M AGGIE) A. W ILDEROTTER

Mary (Maggie) A. Wilderotter
Director