Costco's Operating Margin Analysis

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Operating margin/Return on sales (ROS) is the ratio of operating income divided by net sales or revenue, usually presented in percent. According to gurufocus’ statistics (October, 2015), Costco’s operating margins (3.12%) ranked higher than 53% of the 359 Companies in the Global Discount Stores industry (2.99%). Just like Gross Margin, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. In addition, according to Business Insider (Ashley, 2014), Costco’s revenue percentage change is 127.8% which is significantly higher than Walmart (70.24%) and Target (60.94%)

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