Costco membership trends face investor scrutiny ahead of earnings

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Costco membership trends & earnings

Highlights

Costco's paid membership growth slows to 4.8% by February 2026, with the U.S. renewal rate at 92% and global just under 90%.
A surge in digitally acquired, younger members—less likely to renew—contributes to lower average renewal rates and higher churn for Costco.
Costco trades at about 50 times projected 2026 earnings, doubling staples peers, making its earnings report crucial given limited room for disappointment.

Membership metrics in focus before results

As reported by CNBC, investor attention is centering less on Costco’s near-term sales momentum and more on whether the company can show improvement in paid member additions and renewals when it reports results on Thursday evening.

Total paid membership growth has historically run in the 6% to 7% range, but it falls below 5% over the past year. By the end of Costco’s fiscal second quarter of 2026 in February, overall paid membership growth slows to 4.8%, while the core U.S. renewal rate stands at 92% and the global renewal rate is just under 90%.

Management says part of the moderation reflects tougher comparisons, but analysts point to a broader shift in customer mix. Christopher Nardone, an analyst at Bank of America, says digitally acquired younger members now make up a much larger share of new sign-ups than they did in 2019, and those customers tend to renew less consistently than traditional warehouse shoppers.

Costco CFO Gary Millerchip says the growing mix of digital members is weighing on the average renewal rate, even as it helps expand the membership base and fee income. Analysts also say some newer online members are joining for one-off purchases or delivery convenience rather than long-term loyalty, which increases churn.

Valuation pressure and loyalty signals

Membership trends carry added weight because Costco’s fee income underpins the investment case for the stock. JPMorgan says the shares trade at about 50 times projected 2026 earnings, roughly double the typical valuation for staples stocks, while Walmart trades at about 40 times.

Analysts say there are still signs of resilience inside the membership base. Nardone highlights that executive membership growth accelerates to 9% in the last two quarters, outpacing total membership growth and supporting confidence because executive members account for nearly three-quarters of membership fee revenue.

Other factors may also support renewals. Analysts say higher gas prices can increase the perceived value of Costco memberships, while the company is pushing practical measures such as auto-renewals, reminder emails, digital incentives and extra executive member benefits to reduce churn and improve engagement.

Costco is also facing slower growth from international warehouse openings, which have historically generated large bursts of new memberships, especially in Asian markets. For Wall Street, the earnings report is likely to be judged on whether management can persuade investors that the membership engine remains durable despite moderation, because the stock’s strong gains this year leave limited room for disappointment.

In our earlier analysis of Dollar General (DG), we examined how a short-term rebound pushed the stock above its 20-day moving average while it still traded below the 50-day and 200-day averages, pointing to lingering medium- and long-term selling pressure. We also noted mixed momentum readings and overbought oscillator signals, suggesting elevated risk of a pullback or range-bound trading unless DG can break resistance near $113.10 or hold support around $105.47.

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