Consumer Staples
Two retail revenue structures: Reported FY2025 Results
Costco separates membership fees from merchandise net sales; Target presents net sales as its revenue caption. This source-linked study separates reported observations from interpretation and compares only the selected issuers.
The business models
Costco separates membership fees from merchandise net sales; Target presents net sales as its revenue caption. The different presentations make denominator selection important. Comparing operating income with a total that omits part of one company’s revenue would create a mechanical inconsistency.
Selected reported observations
Costco Wholesale Corporation (COST), year ended 2025-08-31 — Total revenue: 275,235 USD million; Net sales: 269,912 USD million; Membership fees: 5,323 USD million. Target Corporation (TGT), year ended 2026-01-31 — Net sales: 104,780 USD million; Operating income: 5,117 USD million; Net earnings: 3,705 USD million.
Analytical interpretation
Reconcile merchandise sales, membership fees, total revenue and operating costs before comparing margins. Keep the 52-week reporting periods visible. Membership fees are part of total revenue but are excluded from merchandise net sales. Using net sales as if it were the full revenue denominator changes a margin calculation. Separating the two streams makes the calculation reproducible; it does not establish the profitability of either stream in isolation. The decrease in operating income was larger in percentage terms than the decrease in net sales. This is an observed relationship between two reported totals, rather than a claim about any single cause. A fuller explanation requires the gross-margin, expense and merchandise-mix discussion in the annual report.
Comparison boundaries
Merchandise mix, store costs, foreign exchange and the role of membership economics limit direct comparison. The two selected issuers do not establish an industry average.
Sources and method
Figures are selected historical annual observations from the linked company reports. Fiscal 2025 means the issuer’s own fiscal label, not a common calendar interval. Dollar amounts retain the million-dollar source unit, and source-rounded figures remain marked as rounded. The analysis is editorial interpretation; it is not company guidance, a sector return estimate or an investment recommendation. Source review date: 2026-11-15.