Four items answer the questions a first read has. Item 1 says how the money arrives, Item 1A lists what management calls the significant risks, Item 7 explains last year's movement, and Item 8 holds the audited statements. Costco's Form 10-K for the fiscal year ended 31 August 2025 puts Item 1A on page 9, Item 7 on page 23 and Item 8 on page 33, and opens Item 1 with 914 warehouses worldwide at that date. One condition changes every comparison in the document: how many weeks the fiscal year held.
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| Item | What it answers | In Costco's fiscal 2025 filing |
|---|---|---|
| Item 1, Business | How does the money arrive? | 914 warehouses; e-commerce about 7 percent of net sales |
| Item 1A, Risk Factors | What does management call significant? | Page 9 |
| Item 7, MD&A | Why did the numbers move? | Net sales up 8 percent to $269,912 million |
| Item 8, Financial statements | What do the audited figures show? | Total revenue $275,235 million |
Item 1 is where the business model is stated in numbers
Item 1 describes the products, the markets, the competition and the operating factors. Costco's names an annual membership fee of $65 in the United States, an Executive upgrade at a further $65 that earns a 2 percent reward capped at $1,250 a year, 81.0 million total paid members at the end of fiscal 2025, and Executive members accounting for about 73.6 percent of worldwide net sales (Form 10-K, fiscal 2025). Read this item first when the business is unfamiliar, because every later figure is a consequence of it.
Item 1A lists risks in management's order, not in a ranking
The SEC's investor bulletin on reading a 10-K states that Item 1A covers the most significant risks that apply to the company or its securities, that companies generally list them in order of importance, and that the section focuses on the risks themselves rather than on what the company does about them. Order of importance is a convention, not a score. Some risks are economy-wide, some industry-wide, some specific to one issuer, and reading the wording is what separates them. Several holdings exposed to one of those risks still move together, which is how five tickers become one position.
Item 7 is management explaining its own numbers
Costco's Item 7 states that net sales rose 8 percent to $269,912 million, that membership fee revenue rose 10 percent to $5,323 million, that gross margin rose 20 basis points, or 11 basis points excluding the effect of gasoline price deflation, and that the effective tax rate was 25.1 percent against 24.4 percent a year earlier (Form 10-K, fiscal 2025). The bulletin describes this section as management's own words on liquidity, capital resources, known trends and material changes from the prior period (SEC investor bulletin). Those words are attribution rather than measurement, a distinction worked through in filings against forecasts.
Item 8 rewards reading the column header first
The audited statements arrive with three columns, and the columns are not always the same length. Costco's fiscal 2025 and fiscal 2024 each ran 52 weeks; fiscal 2023 ran 53 (Form 10-K, fiscal 2025). A three-year growth rate calculated across that boundary compares 52 weeks of trading with 53. The audit status differs by form as well: a 10-K carries audited annual statements while a 10-Q carries unaudited quarterly ones.
Example: what one membership costs and what it earns
This example uses two items of one filing and one division. Item 1 gives the $65 annual United States fee and 81.0 million total paid members. Item 8 gives membership fee revenue of $5,323 million. Divide $5,323 million by 81.0 million members and the average lands at $65.7 per paid member, which sits alongside the posted fee once higher Executive and international fees are in the mix.
The second division matters more. Item 8 reports operating income of $10,383 million for fiscal 2025, so membership fees of $5,323 million are 51.3 percent of it. Renewal rates of 92.3 percent in the United States and Canada and 89.8 percent worldwide are therefore not a customer-service statistic in this filing; they sit on top of half the operating income.
Item 6 is empty, and the certifications sit in the exhibits
Item 6 in Costco's filing reads "Reserved" on page 22, while the SEC bulletin's list of items still names Item 6 as Selected Financial Data. The bulletin remains right about the roles: the company writes the 10-K, the SEC neither writes it nor vouches for its accuracy, and non-GAAP figures have to be shown against the most comparable GAAP measure (SEC investor bulletin). The chief executive and chief financial officer certify the filing under Sections 302 and 906, and those certifications are filed as Exhibits 31 and 32. Locating a particular filing before any of this starts is covered in finding the original company filing.
Source references
Primary sources used for this guide. Follow the links for the original scope, definitions and conditions.
- Costco Wholesale Corporation Form 10-K for the fiscal year ended August 31, 2025Accessed 2026-09-17
- Investor Bulletin: How to Read a 10-KAccessed 2026-09-17
- Using Financial Statements to Evaluate Investment OpportunitiesAccessed 2026-09-17