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Costco's Renewal Rates Hold Strong: Can Digital Members Catch Up?
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Key Takeaways
Costco kept worldwide renewal at 89.7%; U.S./Canada dipped 10 bps to 92.1%.
COST says more members join digitally, and online recruits have historically lower renewal rates.
Costco is using targeted digital messaging and auto-renewal to lift retention among online sign-ups.
Costco Wholesale Corporation (COST - Free Report) continues to demonstrate exceptional member loyalty, as evidenced by its second-quarter fiscal 2026 results. The worldwide renewal rate remained steady at 89.7%, while the United States/Canada rate saw only a marginal decline of 10 basis points to land at 92.1%. This slight softening stems from a specific shift in the membership mix rather than a broad loss of interest in the warehouse model.
Management noted that new members signing up through digital channels now represent a larger portion of the total base. These online recruits historically renew at lower rates than those who join at physical warehouses.
To bridge this gap, the company is deploying targeted digital communications and retention strategies to increase the stickiness of its online sign-ups. These efforts are already showing signs of success as the decline was less than expected. Beyond digital outreach, the company is leveraging convenience-driven programs such as auto-renewal to solidify the member relationship.
While these younger digital-first members currently lag in retention, they provide a critical runway for long-term revenue growth and executive membership upgrades. The challenge for the coming quarters will be ensuring these high-tech members find the same indispensable value that keeps traditional warehouse shoppers renewing year after year.
Walmart Inc. (WMT - Free Report) continues to scale its digital ecosystem aggressively, with e-commerce sales rising 24% globally and contributing 23% of total sales in the fourth quarter of fiscal 2026, highlighting strong omnichannel momentum. Walmart is leveraging store-fulfilled delivery, AI-driven tools and marketplace expansion to enhance convenience and drive higher basket sizes. Walmart’s comparable sales growth of 4.6% in the U.S. division reflects increased customer transactions supported by digital adoption.
BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) is also seeing robust digital traction, with digitally enabled comparable sales growing 31% in the fourth quarter of fiscal 2025 and penetration reaching 16%. BJ’s Wholesale benefits from a club-based fulfillment model, with more than 90% of digital orders fulfilled in-club, supporting efficiency. BJ’s Wholesale continues to pair digital growth with membership expansion and traffic gains, reinforcing its omnichannel value proposition.
What the Latest Metrics Say About Costco
Costco has seen its shares jump 3.4% over the past year compared with the industry’s growth of 16.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 46.72, higher than the industry’s ratio of 32.99 but below its median P/E level of 47.14, observed over the past year. Although the premium multiple may appear elevated, investors often view Costco as a high-quality retail operator supported by resilient comparable sales growth, strong membership retention and expanding digital capabilities.
As long as Costco continues to deliver consistent sales growth and strengthen its omnichannel presence, its premium valuation could remain supported by investors seeking stable growth within the retail sector.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 8.5% and 13%, respectively. For the next fiscal year, the consensus estimate indicates a 7.5% rise in sales and 10% growth in earnings.
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Costco's Renewal Rates Hold Strong: Can Digital Members Catch Up?
Key Takeaways
Costco Wholesale Corporation (COST - Free Report) continues to demonstrate exceptional member loyalty, as evidenced by its second-quarter fiscal 2026 results. The worldwide renewal rate remained steady at 89.7%, while the United States/Canada rate saw only a marginal decline of 10 basis points to land at 92.1%. This slight softening stems from a specific shift in the membership mix rather than a broad loss of interest in the warehouse model.
Management noted that new members signing up through digital channels now represent a larger portion of the total base. These online recruits historically renew at lower rates than those who join at physical warehouses.
To bridge this gap, the company is deploying targeted digital communications and retention strategies to increase the stickiness of its online sign-ups. These efforts are already showing signs of success as the decline was less than expected. Beyond digital outreach, the company is leveraging convenience-driven programs such as auto-renewal to solidify the member relationship.
While these younger digital-first members currently lag in retention, they provide a critical runway for long-term revenue growth and executive membership upgrades. The challenge for the coming quarters will be ensuring these high-tech members find the same indispensable value that keeps traditional warehouse shoppers renewing year after year.
Costco’s Peer Performance: Walmart & BJ’s Wholesale
Walmart Inc. (WMT - Free Report) continues to scale its digital ecosystem aggressively, with e-commerce sales rising 24% globally and contributing 23% of total sales in the fourth quarter of fiscal 2026, highlighting strong omnichannel momentum. Walmart is leveraging store-fulfilled delivery, AI-driven tools and marketplace expansion to enhance convenience and drive higher basket sizes. Walmart’s comparable sales growth of 4.6% in the U.S. division reflects increased customer transactions supported by digital adoption.
BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) is also seeing robust digital traction, with digitally enabled comparable sales growing 31% in the fourth quarter of fiscal 2025 and penetration reaching 16%. BJ’s Wholesale benefits from a club-based fulfillment model, with more than 90% of digital orders fulfilled in-club, supporting efficiency. BJ’s Wholesale continues to pair digital growth with membership expansion and traffic gains, reinforcing its omnichannel value proposition.
What the Latest Metrics Say About Costco
Costco has seen its shares jump 3.4% over the past year compared with the industry’s growth of 16.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 46.72, higher than the industry’s ratio of 32.99 but below its median P/E level of 47.14, observed over the past year. Although the premium multiple may appear elevated, investors often view Costco as a high-quality retail operator supported by resilient comparable sales growth, strong membership retention and expanding digital capabilities.
As long as Costco continues to deliver consistent sales growth and strengthen its omnichannel presence, its premium valuation could remain supported by investors seeking stable growth within the retail sector.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 8.5% and 13%, respectively. For the next fiscal year, the consensus estimate indicates a 7.5% rise in sales and 10% growth in earnings.
Image Source: Zacks Investment Research
Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.