Target vs. Costco: What Their Revenue Trends Tell Investors
Costco's quarterly sales now more than double Target's, but their revenue peaks arrive in different seasons. Explore what drives these patterns.
By Robert Izquierdo
Target: Managing Cyclical Revenue Trends
Target (TGT +5.29%) primarily generates its revenue by selling a diverse mix of groceries, apparel, home decor, and general merchandise through its nationwide network of physical stores and its digital storefronts.
It recently appointed a new chief global supply chain officer and raised its quarterly dividend, while reporting a 3% net income margin for the quarter ended May 2, 2026.
Costco: Steady Growth Through Membership Warehouses
Costco (COST +0.36%) operates global membership-based retail warehouses that offer customers bulk groceries, consumer electronics, and apparel, alongside ancillary services such as pharmacies, food courts, and gas stations.
It recently rolled out membership card entrance scanners nationwide and expanded its warehouse footprint, while posting a 13% gross margin for the quarter ended May 10, 2026.
Why Revenue Matters for Retail Investors
Revenue here refers to the total amount of money a business brings in before deducting any operational expenses. It serves as a critical starting point for investors to understand the overall size, scale, and growth trajectory of a retail business.
Quarterly Revenue for Target and Costco
Data source: Company filings. Data as of June 23, 2026.
Foolish Take
Examining the revenue trends for Target and Costco reveal insightful information helpful to evaluating investments in these retail giants. Target’s sales spikes in the first quarter are because its fiscal Q1 spans the key holiday shopping season. Retailers typically see their largest sales during that time of year.
Costco experiences annual spikes in its fiscal third quarter, during the summer months, because it is a different kind of retailer from Target. It sells products in bulk, and during the summer, customers buy food for barbecues and purchase pricey items such as outdoor furniture. Consumers typically do not buy gifts in bulk during the holiday period.
Costco’s quarterly revenue is substantially higher than Target’s as a result not only of its bulk sales, but also to membership fees that Target lacks. These fees added $1.4 billion to Costco’s top line in its fiscal third quarter ended May 10.
As their revenue trends show, Target and Costco may both operate in the retail category, but their business models differ enough to make meaningful impacts on their income.