Costco Financial Health: Debt Payment Due and Liquidity

Supermarket. Pexels Image.

This article analyzes the financial position of Costco (COST), with a specific focus on the debt and lease obligations. The discussion outlines upcoming maturities and lease commitments while assessing the company’s liquidity to evaluate its capacity to meet these requirements.

However, this analysis focuses on only the debt and lease obligations. Other contractual commitments — including purchase agreements, retirement benefits, capital expenditures, share repurchases, and dividend distributions, where applicable — are excluded from this discussion.

Let’s take a look!

Investors looking for other key statistics of Costco may find more resources in these pages:

h3>Same Store Sales

• Costco same stores sales by segment: U.S., Canada, and International,

Revenue

• Costco revenue by category: foods, non-foods, fresh foods, etc.,
• Costco revenue by category: merchandise sales and membership fees,
• Costco E-Commerce (Online) sales revenue,
• Costco revenue by region: U.S., Canada, and International,

Profit Margin

• Costco profit margin by region: U.S., Canada, and International,

Comparison with Walmart

• Costco vs Walmart: profit margin,
• Costco vs Walmart: profit in the U.S. and International segments,
• Costco vs Walmart: total stores and average store size,

Other Statistics

• Costco gas station numbers and gasoline revenue,
• Costco total stores worldwide and in the U.S., Canada, Mexico, etc.,
• Costco headcount analysis: total employees and employee by region,

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Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

Contractual Obligations: Contractual obligations refer to the commitments a company has agreed to under various contracts and agreements. These obligations can span several categories, including:

• Debt and Interest Payments: The principal and interest payments on the company’s outstanding debt.

• Leases: Payments for leasing property, equipment, or other assets.

• Purchase Obligations: Commitments to purchase goods or services from suppliers.

• Pension and Postretirement Obligations: Contributions to employee pension plans and postretirement benefits.

• Other Long-term Contracts: Any other long-term contractual commitments, such as service agreements or supply contracts.

These obligations are typically detailed in the notes to the financial statements and give stakeholders an understanding of the company’s future cash outflows and financial commitments.

Lease Liabilities: Lease liabilities represent a company’s obligation to make future lease payments under leasing agreements. They arise when a company leases an asset, such as real estate, equipment, or vehicles, for a specific period. These liabilities are typically calculated based on the present value of the unpaid lease payments, discounted using the company’s borrowing rate or a similar rate.

Lease liabilities are reported on the balance sheet as part of the company’s financial obligations, and they are associated with the corresponding right-of-use asset, which reflects the benefit of using the leased asset over time. Accounting standards like IFRS 16 and ASC 842 require companies to recognize lease liabilities for most lease agreements, improving transparency in financial reporting.

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Insight & Summary of Costco’s Debt Due and Liquidity

The following analysis consolidates the trends observed for Costco Wholesale’s debt due and liquidity as of the fiscal year 2025 (ended on Aug 31, 2025).

• Costco’s debt maturity profile is manageable in the near term but presents two concentrated repayment events that warrant attention. The 2026 obligations are modest at $475M in total, dominated by lease payments rather than debt maturities, posing no material liquidity challenge.

• However, 2027 represents the most significant single-year obligation in the window at $2.6B, driven by a $2.25B long-term debt maturity — a spike that stands in sharp contrast to the near-zero debt maturities in 2026 and 2028. A second, albeit smaller, concentration emerges in 2030 at $2.0B, again anchored by a $1.75B long-term debt maturity.




• Lease obligations — both operating and finance — are well-distributed across the period, declining gradually from $400M combined in 2026 to $293M in 2030, reflecting a stable and predictable lease structure with no outsized single-year exposure.

• On the liquidity side, Costco’s position is unambiguously strong. Total available liquidity stands at $28.4B, anchored by $14.2B in cash and cash equivalents and supported by a three-year average operating cash flow of $11.9B — the most consequential metric in the analysis, as it underscores the business’s capacity to service obligations entirely from recurring operational cash generation.

• The $1.1B in marketable securities and $1.2B revolving credit facility provide additional buffers, though they are secondary considerations given the scale of cash on hand. Against the largest single-year obligation of $2.6B in 2027, Costco’s liquidity position provides coverage of approximately 11x — a ratio that leaves virtually no scenario in which near-to-medium-term debt service becomes a concern.

• The overall financial standing is that of a conservatively structured, cash-generative business with ample capacity to absorb its upcoming obligations without meaningful financial stress.

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Debt And Lease Payment Due

Costco’s debt and lease payments data are obtained from the 2025 annual report dated 31 Aug 2025.

Types of Debt	US$ Millions
	2026	2027	2028	2029	2030
Long-Term Debt Maturities	$75	$2,250	$0	$148	$1,750
Short-Term Debt Maturities	0	–	–	–	–
Operating Lease	$267	$250	$235	$204	$184
Finance Lease	$133	$132	$135	$122	$109
Total Due	$475	$2,632	$370	$474	$2,043

We only look at Costco’s debt and lease payments. For other contractual payments such as purchase obligations and dividend payments, we will ignore them in this discussion as we focus only on the company’s indebtedness.

Costco’s total debt obligations for calendar year 2026, inclusive of lease payment, amounted to a modest $475 million.

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Liquidity

Total liquidity as of 31 Aug 2025.

Available Liquidity	US$ Millions
	Committed Capacity	Available capacity from Aug 31, 2025 and thereafter
Cash & Cash Equivalents	–	$14,161
Marketable Securities	–	$1,123
Revolving Credit Facility	$1,220	$1,220
Commercial Paper Program	$224	$24
Net Cash Provided By Operating Activities	–	$11,914 (3-Year Average)
Total	–	$28,442

Costco’s primary liquidity sources consist of cash and cash equivalents, marketable securities, and operating cash flow, as detailed in the table above. These sources provide the company with a robust foundation for addressing financial obligations and strategic expenditures.

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Credit Rating

Costco’s credit ratings as of 31 Aug 2025.

Rating Institutions	Types Of Indebtedness		Outlook
	Long-Term Debt	Short-Term Debt
Standard & Poor’s	N.A.	N.A.	N.A.
Moody’s	N.A.	N.A.	N.A.
Fitch	N.A.	N.A.	N.A.

As of Aug 31, 2025, Costco had not disclosed any credit ratings for its debt in its 2025 annual reports.

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References and Credits

1. All financial figures presented were obtained and referenced from Costco’s annual reports published on the company’s investor relations page: Costco Investor Relations.

2. Pexels Images.

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