Costco and PepsiCo occupy very different positions on the leverage spectrum. In FY2025, COST carried total debt of approximately $5.79 billion, composed of $5,713M in long-term noncurrent debt [COST:Q3] and $75M in current maturities [COST:Q7], against stockholders' equity of $29,164M [COST:Q11] and a cash balance of $14,161M [COST:Q15] — meaning Costco is effectively net-cash positive. PepsiCo, by contrast, held $42,321M in long-term noncurrent debt [PEP:Q3] plus $6,861M in short-term borrowings [PEP:Q7], for total debt of roughly $49.2 billion, set against equity of only $20,406M [PEP:Q11] and cash of $9,159M [PEP:Q15]. PEP's gross debt-to-equity ratio is therefore well above 2x, while COST's is well below 0.25x. The directional trends also diverge favorably for Costco: COST's long-term debt has actually declined from $6,484M in FY2022 to $5,713M in FY2025 [COST:Q3] — a roughly 12% reduction — while its equity base has expanded materially [COST:Q8][COST:Q11], representing a clear deleveraging trajectory. PEP's long-term debt, meanwhile, has grown from $35,657M in FY2022 [PEP:Q0] to $42,321M in FY2025 [PEP:Q3], and short-term borrowings have risen meaningfully over the same period [PEP:Q4][PEP:Q7], though it is worth noting that FY2022 represented a relative trough in PEP's short-term borrowings, so the magnitude of that increase should be interpreted in the context of a longer-term, non-monotonic trend.
COST: Costco runs a conservatively leveraged balance sheet: FY2025 total debt of ~$5.79B ($5,713M long-term [COST:Q3] plus $75M current [COST:Q7]) is dwarfed by $29,164M in equity [COST:Q11] and $14,161M in cash [COST:Q15], leaving the company in a net-cash position. Notably, long-term debt has declined approximately 12% since FY2022 while equity has grown significantly, reflecting an active deleveraging trend that further reduces balance sheet risk.
PEP: PepsiCo carries a substantially heavier debt load, with FY2025 total debt of approximately $49.2B ($42,321M long-term [PEP:Q3] plus $6,861M short-term [PEP:Q7]) against equity of $20,406M [PEP:Q11], implying a gross debt-to-equity ratio above 2x. Cash of $9,159M [PEP:Q15] provides only partial offset. The overall trajectory points toward higher leverage, with long-term debt rising from $35,657M in FY2022 [PEP:Q0] to $42,321M in FY2025 [PEP:Q3] and short-term borrowings also elevated relative to recent history [PEP:Q4][PEP:Q7] — though the pace of short-term borrowing growth looks somewhat more pronounced when measured from the FY2022 trough than it would from a longer baseline.
Cross-axis takeaway: The leverage comparison reveals a structural divergence: Costco is actively deleveraging from an already conservative starting point, while PepsiCo is carrying and gradually adding to a debt load that already exceeds its equity base by a wide margin. For investors focused on balance sheet resilience, COST presents meaningfully lower financial risk, whereas PEP's leverage profile warrants monitoring — particularly given rising interest costs in the current rate environment.