The Story
On September 24, 2026, Costco reported fiscal 2026 fourth-quarter and full-year results. Net sales for the quarter rose 11.2% to $93.9 billion. Full-year net sales hit $297.2 billion, up 10.1%. Diluted earnings were $6.75 a share in the quarter and $20.76 for the year.[1]
Those top-line numbers looked strong. The more interesting line sat just below them.
Membership fee income was $1.85 billion in the quarter, up 7.3% year over year. That is a sharp slowdown from the double-digit fee growth Costco had been posting while the September 2024 U.S. and Canada membership fee increase worked through the base. Management said the fee hike accounted for less than 1% of fee growth in the quarter, and that Q4 was the last period with a year-over-year benefit from that increase. Excluding the fee increase and foreign exchange, underlying membership income grew 6.8%.[2][3]
The membership engine itself still looks healthy. Costco ended the year with 84.1 million paid members, up 3.8%. Paid executive members rose 9.4% to 42.3 million. U.S. and Canada renewal rates were 92.3%, up 10 basis points from the prior quarter. Worldwide renewal was 89.8%.[2][3]
In other words: the club is still sticky. The easy comparison from raising prices is gone.
The Lesson
A price increase can juice a high-margin recurring stream for a year. It cannot permanently redefine the growth rate of that stream.
Costco’s membership fees are not a side product. They are a core profit lever. In fiscal 2025, membership fees were about $5.3 billion against roughly $10.4 billion of operating income. When fee growth runs at 14%, that line does heavy lifting for the earnings algorithm. When it settles near 7%, the rest of the model has to carry more of the load: traffic, ticket, executive mix, warehouses, and digital.[1][4]
This is a classic lapping problem. Revenue recognized from a one-time price change looks like growth until the new price is fully in the year-ago base. After that, reported growth falls back to the true drivers: more members, richer mix, and higher engagement.
Costco still has those drivers. Executive memberships are outpacing total membership growth. Renewal rates are high. Digitally enabled comparable sales rose about 19.5% in the quarter. The business did not break. The math just got honest again.[1][2]
The trap for managers is treating a pricing action as if it were product-market strength. Pricing power is real and valuable. It is also temporary in the growth-rate sense. Once customers have accepted the new price, you need volume and value creation to keep the curve up.
How to Use It
Separate price-driven growth from volume-driven growth in every recurring-revenue line. Show them on different rows in the same dashboard.
When you raise prices, build a “lapping calendar.” Mark the quarter when the increase fully annualizes, and set expectations before that quarter arrives.
Track mix, not just headcount. Costco’s executive membership growth matters more than raw member count because richer tiers usually renew better and spend more.
Protect renewal rates when you take price. A fee hike that lifts revenue but damages retention is a short-term win with a long payback problem.
After the easy comparison ends, ask what must grow next: units, usage, ancillary products, or a better customer mix. If the answer is unclear, the pricing action bought time, not a new strategy.
Sources
[1] Costco Wholesale Corporation, Form 8-K Exhibit 99.1, “Reports Fourth Quarter and Fiscal Year 2026 Operating Results” (Sept. 24, 2026): https://www.sec.gov/Archives/edgar/data/909832/000090983226000084/costex9918-k92426.htm
[2] Zacks Equity Research via Yahoo Finance, “COST Q4 Earnings Beat Estimates on Sales and Digital Strength” (Sept. 25, 2026): https://finance.yahoo.com/markets/stocks/articles/cost-q4-earnings-beat-estimates-123800686.html
[3] Earnings Whispers, Costco Wholesale Corporation (COST) Q4 2026 Earnings Call Transcript: https://beta.earningswhispers.com/transcript/COST/Q42026
[4] The Globe and Mail (press release syndication), “Costco’s Best Numbers Came With an Asterisk”: https://www.theglobeandmail.com/investing/markets/stocks/COST-Q/pressreleases/4802765/costco-s-best-numbers-came-with-an-asterisk/