The Costco membership growth story remains one of the company’s strongest long-term value drivers. In fiscal 2025, Costco Wholesale Corporation (NASDAQ:COST) delivered another impressive performance in its subscription engine, with membership fee income soaring 14% to $1,724 million in the fourth quarter. Investors continue to closely monitor these metrics because membership revenue is both predictable and high-margin—making it the backbone of Costco’s financial model.
Membership Fee Strength Despite Headwinds
A large share of this membership income growth was driven by higher upgrades from Gold Star memberships to Executive memberships, as well as the fee increases introduced in the United States and Canada last September. Importantly, even without the fee hike and currency fluctuations, Costco membership growth remained solid, with membership income still rising 7%. Paid memberships rose 6.3% to reach 81 million globally, while Executive members increased 9.3% to 38.7 million.
Executive memberships now represent nearly 47.7% of total paid members and contribute a striking 74.2% of global sales. This concentration of higher-value shoppers reinforces the company’s competitive moat—and strengthens the long-term Costco membership growth outlook.
Renewal Rates Slip, But Fixes Are Underway
The quarter wasn’t perfect. Global renewal rates dipped to 89.8% from the previous 90.2%, while U.S. and Canada renewal rates fell 40 basis points to 92.3%. Management attributed the decline to an influx of online sign-ups, including promotional pushes such as Groupon campaigns. Historically, online sign-ups show slightly weaker renewal behavior in their first year.
Costco is now addressing these trends by boosting auto-renew enrollment, enhancing personalized digital outreach, and introducing new perks. Executive members will soon benefit from extended warehouse hours and a $10 monthly Instacart credit—an incentive tailor-made for digitally active households. Younger shoppers now represent nearly half of all new sign-ups, making retention strategies increasingly vital.
Looking ahead, membership fees are projected to grow 9.1% in fiscal 2026, following a 10.3% jump in fiscal 2025. These forecasts reinforce Costco’s steady, subscription-driven revenue model.
How Competitors Are Responding
The appeal of the warehouse club model extends far beyond Costco. BJ’s Wholesale Club Holdings (NYSE:BJ) and Walmart Inc. (NYSE:WMT) are also reporting strong subscription trends.
BJ’s Wholesale saw its membership fee income climb 9.8% year over year to $126.3 million in the third quarter of fiscal 2025. Members who engage more heavily in BJ’s digital ecosystem tend to deliver higher lifetime value, and digitally enabled comparable sales for the quarter surged 30%.
Walmart’s global membership fee income grew an impressive 16.7% in the third quarter of fiscal 2026. Walmart+ continues to expand at a double-digit pace in the U.S., while Sam’s Club delivered 7% membership income growth. These trends confirm that Costco membership growth is part of a broader industry dynamic where loyalty programs and subscription ecosystems are increasingly central to retail profitability.
What Costco’s Latest Metrics Signal for Investors
Costco stock has fallen 6.5% over the past year, while the broader industry has grown 1%. This market lag raises questions about valuation. Costco currently trades at a forward 12-month price-to-earnings ratio of 44.10—well above the industry average of 29.77—earning it a Value Score of D.
Even so, growth remains healthy. The Zacks Consensus Estimate projects Costco’s current fiscal-year sales will rise 7.7%, while earnings per share are expected to grow 11% year over year. For long-term investors, these fundamentals—combined with strong Costco membership growth—paint a picture of resilience despite short-term stock pressure.
Bottom Line
Costco’s subscription engine remains powerful. Even with temporary renewal challenges and elevated valuation metrics, the company continues to deliver consistent growth in membership income, upgrades, and high-value customer engagement. With added perks, digital enhancements, and a younger subscriber base, Costco membership growth is positioned to remain one of the strongest long-term pillars of Costco’s business model.
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