Core Insights - Costco Wholesale Corporation (COST) reported a 10.4% year-over-year increase in membership fee income for Q3 of fiscal 2025, totaling $1,240 million, driven by a membership fee hike and an expanding member base [1][8] - Paid household memberships rose 6.8% year-over-year to 79.6 million, with executive memberships growing 9% to 37.6 million, representing 47.3% of paid memberships and driving 73.1% of worldwide sales [2][8] - The membership fee increase, effective from September last year, was complemented by product innovations and enhanced digital offerings, which helped maintain customer loyalty [4][3] Membership Growth and Retention - Costco achieved a 92.7% renewal rate in the U.S. and Canada, with a global renewal rate of 90.2%, indicating strong member retention despite some volatility in new digital memberships [2][8] - The growth in executive memberships, which are the most lucrative, highlights Costco's ability to enhance recurring revenues through pricing power and scale without alienating its core customer base [3][2] Competitive Landscape - Walmart Inc. reported a 15% rise in membership income in Q1 of fiscal 2026, with a 9.6% increase in U.S. membership income, showcasing its successful diversification of revenue streams [5] - BJ's Wholesale Club Holdings, Inc. experienced an 8.1% year-over-year increase in membership fee income to $120.4 million, attributed to strong member acquisition and retention [6] Financial Performance and Valuation - Costco's stock has outperformed the industry, rallying 14.1% over the past year compared to the industry's 5.6% growth [7] - The forward 12-month price-to-earnings ratio for Costco stands at 50.75, significantly higher than the industry average of 32.42, indicating a premium valuation [9] - The Zacks Consensus Estimate projects year-over-year growth of 8% in sales and 12% in earnings per share for the current financial year [10]