Costco Wholesale (COST) risk factors, FY2024 10-K

Costco Wholesale's FY2024 10-K, filed Oct 09, 2024, lists 25 risk factors in 3 groups. There is no earlier 10-K to compare against, so the most company-specific risks are listed below.

Risk factors listed
253 groups
Section length
6k wordsItem 1A

Costco Wholesale's biggest risks in the FY2024 10-K

  • U.S. and Canadian operations drive the majority of sales, with California alone accounting for 27 percent of U.S. sales.

The risks most specific to Costco Wholesale

  • Business and Operating Risks

    We are highly dependent on the financial performance of our U.S. and Canadian operations

    Financial performance is heavily dependent on U.S. and Canadian operations, which generated 86 percent of net sales in 2024, with California representing 27 percent of U.S. sales.

  • Business and Operating Risks

    We may be unsuccessful implementing our growth strategy, including expanding our business in existing markets and new markets, and integrating acquisitions, which could have an adverse impact on our business, financial condition and results of operations

    Growth depends on acquiring property and building new warehouses, competing for suitable locations against other retailers while facing local land use regulations and community opposition.

  • Business and Operating Risks

    We seek to expand in existing markets to attain a greater overall market share. A new warehouse may draw members away from our existing warehouses and adversely affect their comparable sales performance, member traffic, and profitability

    Opening new warehouses in existing markets may cannibalize member traffic and comparable sales from nearby existing locations.

  • Business and Operating Risks

    Our failure to maintain membership growth, loyalty and brand recognition could adversely affect our results of operations

    Profitability relies heavily on maintaining membership growth, increasing Executive membership penetration, and sustaining high renewal rates.

  • Business and Operating Risks

    Disruptions in merchandise distribution or processing, packaging, manufacturing, and other facilities could adversely affect sales and member satisfaction

    Disruptions in merchandise distribution depots or in private-label processing, packaging, and manufacturing facilities could harm sales and member satisfaction.

  • Business and Operating Risks

    Availability and performance of our IT systems are vital to our business. Failure to successfully execute IT projects and have IT systems available to our business would adversely impact our operations

    IT systems are vital for processing high volumes of transactions, payment transactions, and tracking inventory.

  • Market and Other External Risks

    Fluctuations in foreign exchange rates may adversely affect our results of operations

    International operations, including Canada, generated 28 percent of net sales and 33 percent of operating income in 2024.

  • Market and Other External Risks

    Natural disasters, extreme weather conditions, or other catastrophic events could negatively affect our business, financial condition, and results of operations

    Natural disasters and extreme weather, particularly in California and Washington state, could disrupt centralized operating systems and administrative personnel.

All 25 risk factors

Headings as the filing states them, in filing order.

Business and Operating Risks

  1. 01We are highly dependent on the financial performance of our U.S. and Canadian operations
  2. 02We may be unsuccessful implementing our growth strategy, including expanding our business in existing markets and new markets, and integrating acquisitions, which could have an adverse impact on our business, financial condition and results of operations
  3. 03We seek to expand in existing markets to attain a greater overall market share. A new warehouse may draw members away from our existing warehouses and adversely affect their comparable sales performance, member traffic, and profitability
  4. 04Our failure to maintain membership growth, loyalty and brand recognition could adversely affect our results of operations
  5. 05Disruptions in merchandise distribution or processing, packaging, manufacturing, and other facilities could adversely affect sales and member satisfaction
  6. 06We may not timely identify or effectively respond to consumer tastes and preferences, which could negatively affect our relationship with our members, the demand for our products and services, and our market share
  7. 07Availability and performance of our IT systems are vital to our business. Failure to successfully execute IT projects and have IT systems available to our business would adversely impact our operations
  8. 08We are subject to payment-related risks
  9. 09We might sell products that cause illness or injury to our members, harm to our reputation, and expose us to litigation
  10. 10If we do not successfully develop and maintain a relevant omnichannel experience for our members, our results of operations could be adversely impacted
  11. 11Inability to attract, train and retain highly qualified employees could adversely impact our business, financial condition and results of operations
  12. 12We may incur property, casualty or other losses not covered by our insurance

Market and Other External Risks

  1. 13We face strong competition from other retailers and warehouse club operators, which could adversely affect our business, financial condition and results of operations
  2. 14General economic factors, domestically and internationally, may adversely affect our business, financial condition, and results of operations
  3. 15Suppliers may be unable to timely supply us with quality merchandise at competitive prices or may fail to adhere to our high standards, resulting in adverse effects on our business, merchandise inventories, sales, and profit margins
  4. 16Fluctuations in foreign exchange rates may adversely affect our results of operations
  5. 17Natural disasters, extreme weather conditions, or other catastrophic events could negatively affect our business, financial condition, and results of operations
  6. 18Pandemics and other health crises could affect our business, financial condition and results of operations in many respects
  7. 19Failure to meet financial market expectations could adversely affect the market price and volatility of our stock

Legal and Regulatory Risks

  1. 20We are subject to risks associated with the legislative, judicial, accounting, regulatory, political and economic factors specific to the countries or regions in which we operate, which could adversely affect our business, financial condition and results of operations
  2. 21Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations
  3. 22We are exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act and otherwise
  4. 23Changes in tax rates, new U.S. or foreign tax legislation, and exposure to additional tax liabilities could adversely affect our financial condition and results of operations
  5. 24Changes in or failure to comply with environmental, social, or governance (ESG) regulations could adversely impact our business, financial condition and results of operations
  6. 25We are involved in a number of legal proceedings and audits and some of these outcomes could adversely affect our business, financial condition and results of operations

Other Costco Wholesale 10-Ks

  • FY2026 10-K risk factors
    26 risks1 new1 dropped4 reworded

    Accounting judgments are newly emphasized as capable of materially changing reported results, including self-insurance liabilities.

    Filed Oct 07, 2026
  • FY2025 10-K risk factors
    26 risks4 new3 dropped4 reworded

    Costco updated risk disclosures around regulatory compliance, accounting estimates, tax jurisdictions, and ESG goals.

    Filed Oct 08, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.