Is Costco Wholesale Stock Halal?
Costco Wholesale Corporation · COST · NASDAQ
Costco Wholesale Corporation (COST) passes our computed AAOIFI financial-ratio screen (data as of 2026-05-10) — interest-bearing debt 1.3% and cash plus interest-bearing securities 4.6% of market cap, both under the 30% limits — but both major U.S. Shariah-screened ETFs (SPUS and HLAL) exclude it from their holdings as of June 2026, which typically signals a business-activity concern that automated ratio screens cannot see. We report it as conditional until the segment revenue in the latest annual filing is verified.
Financial data as of 2026-05-10 · Screening basis: AAOIFI · Last reviewed 2026-06-14
Our Analysis
Costco is a membership warehouse-club retailer with $275 billion of fiscal 2025 total revenue, of which $269.9 billion is merchandise net sales and $5.3 billion is membership fees. The membership-fee model is a clean service-fee business, and warehouse retailing is permissible, so the Shariah analysis again turns on what is on the shelves and on the balance sheet.
Costco sells alcohol, tobacco, and conventional groceries, and runs pharmacies. None of the impermissible categories is separately disclosed, so their exact share cannot be cited, but for a broad-line club retailer they are typically a minority of sales, the situation in which many scholars permit holding the stock and purifying the corresponding portion of dividends. Costco also reports net interest income of $589 million in fiscal 2025, an interest-linked item that screeners weigh against their tolerance.
Costco is in the S&P 500 but is not held by SPUS as of June 11, 2026, and is absent from HLAL. The cause could be the alcohol and tobacco categories breaching the industry tolerance or a financial-ratio threshold, but SPUS does not publish per-stock reasons, so it cannot be stated definitively. For a Muslim investor, Costco currently sits outside both major US Shariah funds; the practical step is to check a live screener that estimates its impermissible-revenue share and to apply dividend purification if a screener nonetheless passes it.
Business Activity Screen
Costco Wholesale Corporation operates membership warehouse clubs. Per its fiscal 2025 10-K (year ended August 31, 2025; filed October 8, 2025), total revenue was $275,235 million: net sales $269,912M plus membership fees $5,323M. Reportable geographic segments by total revenue were United States $200,046M, Canada $36,923M, and Other International $38,266M.
Warehouse-club retailing is permissible, but Costco sells alcohol, tobacco, and conventional groceries, and operates pharmacies; alcohol and tobacco revenue is not separately disclosed in segment reporting, so the share is not quantifiable from filings (generally a minority of total sales for a broad-line retailer, within the range where many scholars permit holding with purification). Membership fees ($5.3 billion) are a clean service-fee revenue line. Costco also reports interest income, net of $589 million within other income in fiscal 2025 (above the line of interest expense), which is interest-linked income measured against AAOIFI tolerance. Costco is an S&P 500 constituent but is absent from SPUS as of 2026-06-11; the alcohol/tobacco categories or a financial ratio could be the cause, but SPUS does not publish a stock-level reason.
Financial Ratio Screen
| Screen | Value | AAOIFI limit | Result |
|---|---|---|---|
| Interest-bearing debt / market cap | 1.3% | < 30% | Pass |
| Cash + interest-bearing securities / market cap | 4.6% | < 30% | Pass |
| Impermissible income / total revenueInterest income only — verify other impermissible revenue lines in the 10-K | 0.2% | < 5% | Pass |
Spot market cap at research date (consider trailing average for borderline names). Data as of 2026-05-10 · thresholds per AAOIFI Shariah standards.
This verdict uses the AAOIFI standard — the most widely used and, at a 30% debt limit, the most conservative mainstream Shariah standard. Interest-bearing debt and interest-bearing securities each stay under 30% of market cap, and impermissible income under 5% of revenue. Other standards (Dow Jones Islamic, S&P Shariah, MSCI Islamic, FTSE Yasaar) use ~33% limits or screen against total assets, so a borderline company can be rated differently by each. How we screen & why screeners disagree →
How Costco Wholesale screens across Shariah standards
All three mainstream bases below reach the same conclusion for this company.
| Standard | Debt | Cash & interest securities | Limit / basis | Result |
|---|---|---|---|---|
| AAOIFI (our standard) | 1.3% | 4.6% | < 30% of market cap | Pass |
| Dow Jones Islamic / S&P Shariah thresholdDow Jones and S&P apply this limit against a trailing 24–36-month average market cap; shown here on the same point-in-time market cap for comparison. | 1.3% | 4.6% | < 33% of market cap | Pass |
| MSCI Islamic / FTSE Yasaar basisTotal-assets denominator. MSCI/FTSE also apply entry/exit buffers and a receivables screen we do not reproduce. | 6.7% | 23.1% | < 33.33% of total assets | Pass |
HalalWallet computation reproducing each standard's threshold and denominator from public filings (balance sheet as of 2026-05-10) — not the providers' licensed index determinations, which can differ. Debt is interest-bearing borrowings (operating leases excluded). The impermissible-income screen (< 5% of revenue) is common to all of these standards and is shown in the ratio table above. Dow Jones and S&P apply their limit against a trailing 24–36-month average market cap; MSCI and FTSE add entry/exit buffers and a receivables screen. Full methodology →
Conditions
Our computed AAOIFI financial-ratio screen passes on the latest filing data, but both major U.S. Shariah-screened ETFs — SPUS (S&P Shariah methodology) and HLAL (FTSE Shariah methodology) — exclude Costco Wholesale Corporation from their holdings as of our June 2026 check, even though it is in their parent indices. Professional screens apply filing-level business-activity analysis (alcohol, pork, tobacco, or media revenue share) and different ratio bases that an automated ratio screen cannot replicate. That divergence usually signals an impermissible-revenue question. Treat this as unresolved until the segment revenue in the latest annual filing is verified line by line.
Scholars' & Screeners' Positions
Published positions, cited as stated. Screeners can reach different conclusions on the same company because of ratio timing and methodology differences — we report the disagreement rather than flatten it.
SP Funds S&P 500 Sharia ETF (SPUS)
Not held in SPUS as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome.
Source →Wahed FTSE USA Shariah ETF (HLAL)
Not held in HLAL as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome.
Source →
What to do instead
You don't have to choose between investing and your values — screened alternatives exist for nearly every position.
Related guides
Consider Consulting an Islamic Scholar
Major whether Costco Wholesale Corporation is halal decisions often involve nuances that vary by scholarly opinion and personal circumstance. While HalalWallet provides educational comparisons and tools, we are not scholars or financial advisors. For personal guidance on Shariah compliance, consider speaking with a qualified Islamic scholar, your local imam, or a Shariah-certified financial advisor familiar with your situation.
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Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-06-01
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