The key metric investors are most focused on when Costco reports earnings

Costco continues to post strong sales gains, but one metric has been losing momentum and drawing closer scrutiny from investors. Heading into Thursday evening's fiscal third-quarter results, shareholders, including the Club, hope to see signs of improvement in the pace of new member additions and renewals, following declines since late 2025. The big box retailer's high-margin fees remain a cornerstone of its business. Total paid membership has historically grown in the mid- to high-single-digit range (6% to 7%), but fell below 5% over the past year. By the end of the second quarter of fiscal 2026, which ended in February, growth in overall paid members slowed to 4.8%. Part of that slowdown was the result of a 30-basis-point slide in renewal rates in the third quarter of its fiscal 2025, which ended in May of last year. They fell another 40 basis points in the following quarter. In each of the first two quarters of fiscal 2026, the declines moderated to 10 basis points apiece and appeared to stabilize. By the end of the latest second quarter, the core U.S. membership renewal rate was 92%, while the global renewal rate was just under 90%. While seemingly slight, these drop-offs matter. Same-store sales and store traffic are strong indicators, but it's the recurring membership fee income that underpins our investment thesis in the company. It is also why Costco trades at a premium relative to its retail peers. …