Core Insights - Younger consumers are more accustomed to the subscription economy, often switching services after consuming desired content [1] Membership and Renewal Rates - Costco has annual memberships priced at $65 for Gold members and $130 for Executive members, which includes 2% cash back up to $1,250, helping to mitigate quick churn [2] - The company has experienced a decline in renewal rates, with U.S. and Canada rates at 92.2% and worldwide at 89.7%, both down 10 basis points from the previous quarter [4] - The decline in renewal rates is attributed to a changing membership mix, particularly an increase in digital sign-ups, which have lower renewal rates compared to traditional warehouse sign-ups [3][4] Membership Growth - Costco reported membership fee income of $1.329 billion, a year-over-year increase of $163 million or 14%, with the U.S. and Canada membership fee increase contributing to nearly half of this growth [6] - Excluding the membership fee increase and foreign exchange effects, membership income grew by 7.3% year over year, driven by an increase in the membership base and upgrades from Gold Star to Executive Membership [6] - As of the end of Q1, Costco had 39.7 million paid Executive Memberships, a 9.1% increase year over year, and a total of 81.4 million paid members, up 5.2% from the previous year [6]