COST · 10-Q · 2026Q2 · Full report

Supply Chain and Inventory Trends

COSTCO WHOLESALE CORP /NEW · 2026-06-03 · Importance 53 · Surprise 32

Management attributes improved operating cash flow in part to reduced net investment in merchandise inventories, driven by faster inventory turns and improved payment terms with suppliers. The filing notes that net investment in inventories is affected by inventory levels, turnover, supplier payment terms and early payments to obtain discounts. Costco indicates it often sells inventory before paying for it and leverages early payment discounts and larger purchases as a response to cost increases. These working-capital improvements reduced cash tied up in merchandise and supported higher cash from operations.

Key facts

• Net cash provided by operating activities increased primarily due to higher cash flow from operating income and reduced net investment in merchandise inventories driven by faster inventory turns and improved payment terms with suppliers. source