We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Costco's Renewal Trends Point to Lasting Customer Loyalty
Read MoreHide Full Article
Key Takeaways
Costco's U.S.-Canada renewal rate rose 10 basis points to 92.2%, while global renewal held at 89.7%.
Digital outreach offset weaker online renewal trends as e-commerce sign-ups grew within Costco's member mix.
Executive memberships climbed 9.6% to 41.2 million and generated 75% of Costco's total sales.
Costco Wholesale Corporation (COST - Free Report) continues to demonstrate exceptional member retention across its global network, showcasing sustained brand engagement and customer trust. At the close of the third quarter of fiscal 2026, the company reported a robust U.S. and Canada membership renewal rate of 92.2%, representing a 10-basis-point increase from the preceding quarter. Meanwhile, the worldwide renewal rate held steady at an impressive 89.7%.
These strong retention metrics highlight Costco’s effective management of changing member demographics. Management acknowledged that online sign-ups have historically renewed at slightly lower rates than warehouse enrollments, creating pressure on overall renewal metrics as digital adoption expands. However, the company said targeted digital communications and retention initiatives more than offset that headwind during the quarter, allowing renewal rates to stabilize despite the evolving member mix.
Membership engagement remains deep, reflected in the steady growth of premium tiers. Paid memberships increased 4.1% year over year to 82.9 million, executive memberships climbed 9.6% to 41.2 million, and membership income rose 10.7%, or 9.9% excluding foreign exchange. Executive members also accounted for 75% of total sales, underscoring the importance of Costco’s highest-value customers. The company also highlighted strong early adoption of executive memberships following the program’s launch in China.
Management also noted that executive membership growth reflected both upgrades by existing Gold Star members and a higher proportion of new members selecting the executive tier. These members typically shop more frequently and spend more than standard members. Together, stable renewal rates, improved retention among digitally acquired members and rising executive participation indicate that Costco’s membership base remains highly engaged.
How Walmart & BJ's Wholesale Compare With Costco
Walmart Inc. (WMT - Free Report) is also seeing strong momentum in membership, reinforcing customer engagement across its ecosystem. In first-quarter fiscal 2027, Walmart reported a 17.4% increase in global membership fee revenues, while Walmart+ posted a record first-quarter high in net member additions. Management noted that Walmart+ members spend about four times more than non-members and make seven times more e-commerce visits, highlighting the program's growing contribution to recurring revenues and customer loyalty.
BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) also continued to strengthen its membership business during first-quarter fiscal 2026. BJ's Wholesale reported a 9.9% year-over-year increase in membership fee income to $132.4 million, supported by solid membership acquisition, retention and higher-tier membership penetration across both new and existing clubs. Management said BJ's Wholesale remains focused on expanding its membership base while investing in growth, digital capabilities and club expansion to deepen long-term member engagement.
What the Latest Metrics Say About Costco
Costco has seen its shares tumble 6.1% over the past three months against the industry’s 0.6% rise.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 42.61, higher than the industry’s ratio of 31.43. However, it is trading below its 12-month median level of 45.94, indicating some moderation in valuation despite sustained investor confidence in the stock.
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 9.6% and 13.5%, respectively. For the next fiscal year, the consensus estimate indicates a 7.8% rise in sales and 10.2% growth in earnings.
View the Zacks #1 Rank List
Image: Bigstock
Costco's Renewal Trends Point to Lasting Customer Loyalty
Key Takeaways
Costco Wholesale Corporation (COST - Free Report) continues to demonstrate exceptional member retention across its global network, showcasing sustained brand engagement and customer trust. At the close of the third quarter of fiscal 2026, the company reported a robust U.S. and Canada membership renewal rate of 92.2%, representing a 10-basis-point increase from the preceding quarter. Meanwhile, the worldwide renewal rate held steady at an impressive 89.7%.
These strong retention metrics highlight Costco’s effective management of changing member demographics. Management acknowledged that online sign-ups have historically renewed at slightly lower rates than warehouse enrollments, creating pressure on overall renewal metrics as digital adoption expands. However, the company said targeted digital communications and retention initiatives more than offset that headwind during the quarter, allowing renewal rates to stabilize despite the evolving member mix.
Membership engagement remains deep, reflected in the steady growth of premium tiers. Paid memberships increased 4.1% year over year to 82.9 million, executive memberships climbed 9.6% to 41.2 million, and membership income rose 10.7%, or 9.9% excluding foreign exchange. Executive members also accounted for 75% of total sales, underscoring the importance of Costco’s highest-value customers. The company also highlighted strong early adoption of executive memberships following the program’s launch in China.
Management also noted that executive membership growth reflected both upgrades by existing Gold Star members and a higher proportion of new members selecting the executive tier. These members typically shop more frequently and spend more than standard members. Together, stable renewal rates, improved retention among digitally acquired members and rising executive participation indicate that Costco’s membership base remains highly engaged.
How Walmart & BJ's Wholesale Compare With Costco
Walmart Inc. (WMT - Free Report) is also seeing strong momentum in membership, reinforcing customer engagement across its ecosystem. In first-quarter fiscal 2027, Walmart reported a 17.4% increase in global membership fee revenues, while Walmart+ posted a record first-quarter high in net member additions. Management noted that Walmart+ members spend about four times more than non-members and make seven times more e-commerce visits, highlighting the program's growing contribution to recurring revenues and customer loyalty.
BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) also continued to strengthen its membership business during first-quarter fiscal 2026. BJ's Wholesale reported a 9.9% year-over-year increase in membership fee income to $132.4 million, supported by solid membership acquisition, retention and higher-tier membership penetration across both new and existing clubs. Management said BJ's Wholesale remains focused on expanding its membership base while investing in growth, digital capabilities and club expansion to deepen long-term member engagement.
What the Latest Metrics Say About Costco
Costco has seen its shares tumble 6.1% over the past three months against the industry’s 0.6% rise.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 42.61, higher than the industry’s ratio of 31.43. However, it is trading below its 12-month median level of 45.94, indicating some moderation in valuation despite sustained investor confidence in the stock.
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 9.6% and 13.5%, respectively. For the next fiscal year, the consensus estimate indicates a 7.8% rise in sales and 10.2% 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.