Costco's $14B Cash Pile Signals Strong Start to Fiscal 2026

Costco Wholesale Corporation COST concluded fiscal 2025 with a healthy balance sheet, highlighted by an enhanced liquidity position. The company held $14,161 million in cash and cash equivalents as of Aug. 31, 2025, a significant rise from $9,906 million a year earlier. This increase was the key driver behind total current assets of $38,380 million and reflects Costco’s disciplined financial management.

The warehouse giant’s net cash position increased by nearly $4,255 million, given the company's aggressive capital deployment during the same period. The robust cash position was built while simultaneously funding significant investments and returning value to shareholders. This accumulation of cash stems from strong operational performance. 

Costco generated an impressive $13,335 million in net cash from operating activities over the 52 weeks ended Aug. 31, driven by efficient working capital management. This massive operating cash flow allowed the company to reinvest in its business significantly. It spent just under $5.5 billion on capital expenditures, channeling investments into accelerated warehouse growth, remodels and new manufacturing facilities.

On the financing side, Costco allocated $2,183 million for dividend payments and another $903 million for stock repurchases.

The resulting $14,161 million cash buffer provides immense financial flexibility. It exceeds the company’s long-term debt (excluding current portion), which was reported at $5,713 million, underscoring a healthy liquidity status as it moves into fiscal 2026.

What the Latest Metrics Say About Costco

Costco, which competes with Walmart Inc. WMT and Target Corporation TGT, has seen its share rise 4.7% in the past year, underperforming the industry’s growth of 6.7%. While Walmart shares have rallied 30.5%, Target has declined 38.7% in the aforementioned period.
 

From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 46.28, higher than the industry’s ratio of 30.12. COST carries a Value Score of D. Costco is trading at a premium to Target (with a forward 12-month P/E ratio of 11.58) and Walmart (37.74). 
 

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 7.7% and 11.1%, respectively. 
 

Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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