Costco Membership Gains, Digital Sales Boost COST!

Introduction

Costco (ticker: COST) has seen a string of concrete operational updates that matter to investors: robust membership revenue, surging digitally‑enabled sales, and a clear competitive data point from BJ’s Wholesale Club. At the same time, a viral rumor about removing physical membership cards was debunked and should not affect fundamentals. This article summarizes the facts, highlights the numbers investors care about, and explains the near‑term implications for COST stock.

Membership Revenue and Retention

Fee growth and membership scale

Membership fees remain a core profitability engine for Costco. Recent reporting shows membership fee income rose to about $1.724 billion—roughly a 14% year‑over‑year increase—driven by fee increases in the U.S. and Canada alongside continued membership additions. Total paid memberships climbed to roughly 81 million, a meaningful scale that supports steady, high‑margin recurring revenue.

Executive members and renewal trends

Executive members continue to punch above their weight: about 38.7 million executive subscribers now represent roughly 47.7% of the membership base while accounting for an outsized share of sales (around 74.2% of global sales). Renewal rates are a slight watch‑point—North America renewal dipped a few basis points to about 92.3% while global renewals trend near 89.8%—but management is actively promoting auto‑renew and targeted perks (for example, Instacart credits for executives) to shore up retention.

Digital Sales Momentum

Digitally‑enabled growth

Costco’s omnichannel capabilities are accelerating. For the five weeks ended Oct. 5, net sales were reported at approximately $26.58 billion, up about 8% year‑over‑year. More strikingly, digitally‑enabled comparable sales surged roughly 26.1%, indicating strong consumer uptake of online and app channels. This digital lift complements in‑warehouse spending and improves convenience—helping Costco capture incremental trips and higher basket values.

Scale and footprint

Costco’s physical presence—now in the range of more than 900 warehouses (reported at about 914)—continues to provide a distribution backbone for its omnichannel push. The combination of large warehouse density and expanding digital options creates a classic two‑pillar flywheel: membership stickiness funds investments in pricing and assortment, which draws more members and more digital purchases.

Competitive Context: BJ’s Quarterly Update

Confirmed earnings beat and guidance lift

BJ’s Wholesale Club recently reported an adjusted EPS of about $1.16, topping expectations (~$1.09), and raised full‑year EPS guidance to roughly $4.30–$4.40. Membership income at BJ’s showed nearly 10% growth, even as comparable‑store sales slightly missed consensus. These results matter because they provide a contemporaneous benchmark for the warehouse‑club model: membership economics remain resilient across the segment.

What the peer signal implies

While BJ’s is smaller in scale than Costco, its positive surprise underscores that subscription revenue and tight cost control can still drive upside. Investors may view BJ’s beat as supportive of sentiment toward membership retailers in general, but Costco’s larger scale, higher renewal base, and stronger comp sales make it the primary beneficiary of any sector rotation into warehouse clubs.

Noise vs. Facts: The Physical‑Card Rumor

A recent social post claimed Costco would stop issuing physical membership cards in favor of app‑only access. Employees and store reports have publicly refuted that claim, and Costco has made no corporate policy change to that effect. This was a store‑level miscommunication amplified online and should not be interpreted as a structural shift that affects membership economics or COST stock.

Implications for COST Stock

Taken together, the verifiable developments point to three clear takeaways for investors: (1) Membership fees remain a durable, growing, high‑margin revenue stream; (2) digital‑enabled sales are providing meaningful incremental growth and convenience that deepen member engagement; (3) peer results from BJ’s offer a positive cross‑check that the membership model continues to generate earnings resilience across the sector. The modest dip in renewal rates warrants monitoring, but management’s retention initiatives and continued appeal to younger members are constructive responses.

Conclusion

Recent, concrete updates around membership revenue, digitally‑enabled sales, and peer earnings reinforce Costco’s subscription-driven moat and omnichannel momentum. Investors should focus on renewal trends and execution of digital initiatives for signs of sustained upside. Noise—such as the physical‑card rumor—has been debunked and does not reflect company strategy or financial fundamentals.