How Much Does Costco Spend On Selling, General And Administrative Expenses?

December 13th, 2019 by Trefis Team
+2.07%
Upside
711
Market
726
Trefis
COST: Costco logo
COST
Costco

Costco (NASDAQ: COST) spent $15.1 billion on Selling, General and Administrative expenses in FY 2019 (ended August 2019) which was 9.9% of Total Revenues. Trefis estimates the expense to be around 9.8% of Total Revenue in 2020 (ended August 2020). The Company’s total expenses have trended steadily higher from around $126.4 billion in 2017 to about $149 billion in 2019 (ended August 2019). As a percentage of revenues, expenses have remained roughly flat at about 97%. Below, we discuss Costco’s net margins and Total expenses along with its components.

View our interactive dashboard analysis on Costco’s Expenses: How Does Costco Spend Its Money?

Costco’s Net Income Margins have increased between 2017 and 2019

Relevant Articles
  1. Up 8% This Year, Why Is Costco Stock Outperforming?
  2. Does Costco Stock Have More Room For Gains After Rising 40% in 2023?
  3. What To Expect From Costco’s Stock Post Q4 Results?
  4. Costco’s Stock Up 23% So Far, What’s Next?
  5. What To Watch For In Costco’s Stock Post Q3?
  6. What’s Next for Costco Stock?

  • Costco’s Net Income margin increased from 2.1% in 2017 to 2.4% in 2019 but is expected to have a small fall to 2.3% in 2020 (ended August 2020).

Costco’s Total Expenses Have Increased by 18% between 2017 and 2019

  • Costco’s total expenses have grown from $126.3 billion in 2017 to about $149 billion in 2019 which comes to 18% over the 2 years.
  • For 2020, we expect total expenses to stand at $159.8 billion, which comprises of:
    • Operating Expenses = $158.5 Bil
    • Income tax expense = $1.12 Bil
    • Non-operating (income)/expense = -$0.03 Bil
    • Non-controlling Interest = $0.10 Bil

Below, we take a look at how the company’s key expense components have trended and the key reasons for the change.

  1. Operating Expenses: Operating Expenses have increased from $124.9 billion in 2017 to $148 billion in 2019, driven primarily by a $21 billion increase in Cost of Sales.

  • Cost of Sales have increased from $111.9 billion in 2017 to $132.9 billion in 2019 and is expected to be around $142.4 billion in 2020. As % of Revenues, Cost of Sales has increased  gradually from 86.7% to 87% over the same period.
  • Selling, General and administrative Expenses increased from $13 billion in 2017 to about $15.1 billion in 2019 and is expected to be around $16.1 billion in 2020. As % of Revenue, Selling, General and administrative  expenses have declined from 10.1% in 2017 to 9.9% in 2019.
  1. Non-Operating Expenses: Costco’s Non-Operating Expenses are quite nominal in relation to the Overall expenses. They have decreased from $72 million in 2017 to -$28 million in 2019. Trefis estimates the expenses to be around $32.8 million in 2020.
  2. Tax Expense: Costco’s Income Tax Expense has declined from $1.32 billion in 2017 to about $1.06 billion in 2019, Driven By U.S. Federal Income Tax Reforms, with the Effective Tax rate declining from 32.8% to 22.3%.

 

What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Data

Like our charts? Explore example interactive dashboards and create your own.