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Costco Renewal Rates Stay Near Historical Highs Despite Digital Shift

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Key Takeaways

  • COST's U.S. and Canada renewal rate hit 92.2%, with global rates at 89.7%, down just 10 bps from last quarter.
  • Digital sign-ups renew at lower rates, but COST's outreach efforts helped soften the overall decline.
  • Paid households rose 5.2% to 81.4M, with executive members driving 74.3% of total sales.

Costco Wholesale Corporation’s (COST - Free Report) first-quarter fiscal 2026 results shed light on how its membership renewal rates are holding up amid a gradual shift toward digital enrollment. Membership renewal rates remained near historical highs. The renewal rate for the United States and Canada reached 92.2%, while the worldwide renewal rate was 89.7% at the end of the quarter.

These figures represent a marginal decrease of 10 basis points from the preceding quarter. Management attributed this minor dip to the increasing share of online members, who tend to renew at slightly lower rates than those who sign up at warehouses. However, the decline was better than expected, thanks to proactive communication efforts to improve retention, which helped mitigate some of the pressure.

Costco is working to enhance digital renewal trends by boosting engagement with members who sign up through the mobile app or web portal. While management acknowledged that the overall renewal rate may experience further slight declines in the upcoming quarters due to digital growth, the current figures reflect a membership base that remains highly loyal to the warehouse value proposition.

We note that the total number of paid households rose 5.2% year over year to 81.4 million in the first quarter, while total cardholders grew 5.1% to 145.9 million. Furthermore, the higher-tier executive membership base expanded to 39.7 million members, which now accounts for 74.3% of total sales. As a result, membership income, one of the company’s most resilient and predictable revenue streams, surged 14% to $1,329 million in the quarter.

Walmart & BJ’s Wholesale Snapshot on Membership Income

Walmart Inc. (WMT - Free Report) reported global membership fee income growth of 17% during the third quarter of fiscal 2026, reflecting momentum across Walmart+ and Sam’s Club. Walmart noted double-digit growth in Walmart+ fee income in the United States, while Sam’s Club delivered growth in member counts, renewal rates and premium Plus membership penetration. As a result, Walmart continues to diversify profit streams by embedding membership income more deeply into its broader omnichannel model, reinforcing its role as a steady and recurring contributor alongside core retail operations.

BJ’s Wholesale Club Holdings, Inc.’s (BJ - Free Report) membership fee income jumped 9.8% to $126.3 million during the third quarter of fiscal 2025, reflecting strength in member acquisition, retention and higher-tier penetration. BJ’s Wholesale highlighted tenured renewal rates of roughly 90% with a strong higher-tier penetration of 41%. BJ’s Wholesale benefits from rising higher-tier membership adoption, which improves the quality and predictability of membership income.

What the Latest Metrics Say About Costco

Costco stock has declined 10.1% over the past year against the industry’s growth of 3.1%.
 

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From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 41.64, higher than the industry’s ratio of 29.76. COST carries a Value Score of C.
 

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The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 7.5% and 11.7%, respectively. 

 

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Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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