What's behind the gross margin between Costco's gross margin vs Walmart's gross margin? Both companies are operating on a similar profit margin level (2,4% vs 2,6%). However, the approach of the companies is very different. Costco's gross margin is lower than its competitors. Companies usually tout higher margins, but Costco deliberately keeps its markups as low as possible, resulting in low gross margins. That formula is what makes customers loyal, generating higher sales. Walmart is significantly bigger in revenue (almost three times) and puts a higher operating margin on the products it sells (24,8% vs 12,9%)