Costco Wholesale (COST) risk factors, FY2026 10-K

Costco Wholesale's FY2026 10-K, filed Oct 07, 2026, lists 26 risk factors in 3 groups. Against the prior year's 26: 1 new, 1 dropped, 4 substantially reworded.

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Risk factors listed
263 groups
New this year
1vs 26 last year
Dropped
1since the prior 10-K
Substantially reworded
4of those kept
Section length
6k wordsItem 1A

What the changes say

  • Accounting judgments are newly emphasized as capable of materially changing reported results, including self-insurance liabilities.
  • International exposure grew to 292 non-U.S. warehouses, up from 285, while Costco plans further expansion.
  • Member trust now explicitly depends on Costco’s culture; prior emphasis on Kirkland Signature margins and sales growth was removed.
  • Competition and IT-system risks are substantively unchanged, with only wording and punctuation edits.

What changed since the prior 10-K

New

  • NewLegal and Regulatory Risks

    Changes 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

    Changes in accounting rules or management estimates, including for self-insurance liabilities, could materially change reported financial results.

Dropped

  • DroppedLegal and Regulatory Risks

    Accounting principles and related pronouncements, implementation guidelines, and interpretations we apply to a wide range of matters that are relevant to our business, including self-insurance liabilities, are highly complex and involve subjective assumptions, estimates and judgments by our management

Reworded

  • 35% rewrittenMarket and Other External Risks

    We face strong competition from other retailers and warehouse club operators, which could adversely affect our business, financial condition and results of operations

    No substantive change; the competition risk’s wording and punctuation were largely unchanged.

  • 31% rewrittenLegal and Regulatory Risks

    We are subject to risks associated with the legislative, judicial, accounting, regulatory, political and economic factors specific to the places where we operate, which could adversely affect our business, financial condition and results of operations

    Non-U.S. warehouses increased from 285 at 2025 year-end to 292 at 2026 year-end, with minor wording changes to international factors.

    Was: We 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

  • 28% rewrittenBusiness and Operating Risks

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

    Adds Costco’s value-and-integrity culture as essential to member trust, while removing Kirkland Signature’s higher-margin and growing-sales-point discussion.

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

  • 25% rewrittenBusiness 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

    No substantive change; the IT-systems disruption risk is unchanged apart from minor punctuation and wording edits.

All 26 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, brand recognition, and our culture could adversely affect our results of operations28% rewritten
  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 operations25% rewritten
  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 and comprehensive digital experience for our members, our results of operations could be adversely impacted
  11. 11Inability to attract, train and retain 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 operations35% rewritten
  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 provide 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 profits
  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. 20Changes in or failure to comply with laws and regulations could adversely impact our business, financial condition and results of operations
  2. 21We are subject to risks associated with the legislative, judicial, accounting, regulatory, political and economic factors specific to the places where we operate, which could adversely affect our business, financial condition and results of operations31% rewritten
  3. 22Changes 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 operationsNew
  4. 23We are exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act and otherwise
  5. 24Changes in federal, state and foreign tax rates and legislation, could adversely affect our financial condition and results of operations
  6. 25Failure or perceived failure to meet our environmental, social or governance (ESG) goals or expectations set by changing public interest and government regulation of ESG topics could result in reputational harm or adversely affect our business
  7. 26We 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

  • 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
  • FY2024 10-K risk factors
    25 risks

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

    Filed Oct 09, 2024

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.