Can Costco Absorb Rising Costs On A 3.9% Margin?

Costco Wholesale (COST) sells a huge volume of goods. It keeps only a thin slice of each sale as profit. The prices Costco pays for consumer electronics and oil-based goods such as motor oil are now rising. Management has said it is difficult to predict where inflation goes from here. The loose end in your Costco thesis is how much of that cost rise the company can absorb before its profit shrinks.