Thesis → evidence

“I think Costco’s membership model makes its earnings more resilient. Test this thesis.”

Partly supported: fees equal 51% of operating income and renewals stay near 90%, but six years of rising profit can’t test resilience.

Recorded September 30, 2026 · 4 steps · 2 SEC filings · real CLI output

Recorded agent sessionSeptember 30, 2026 · real CLI output

The answer

What the agent concluded

The ingredients of the thesis hold up. Membership fees grew every year, compounding 8.5% a year from FY2020 to FY2025, and equalled 51.3% of operating income in FY2025. Renewal rates were 92.3% in the U.S. and Canada and 89.8% worldwide.

Two qualifications. FY2025 fee growth was partly a price increase, not just new members. And management reports that online sign-ups renew at a lower rate.

The conclusion itself is not yet tested. Operating income rose in every year of the window, so these filings cannot show how earnings behave when the business is under pressure. Costco also does not disclose the cost of serving members, so fees cannot be read as pure profit.

Membership fees / operating income, FY202551.3%FY2020: 65.2%
Membership fee CAGR, FY2020–FY20258.5%grew every year
Renewal rate, U.S. & Canada92.3%89.8% worldwide

Thesis → evidence

Each claim, tested

Membership fees are recurring and growingSupported

Fees rose every year from $3.54B (FY2020) to $5.32B (FY2025); annual growth ranged 5.4%–10.3%.

reported · COSTCO WHOLESALE CORP /NEW 10-K · period ended 2022-08-28; COSTCO WHOLESALE CORP /NEW 10-K · period ended 2025-08-31
Fees are a large share of operating profitSupported

Membership fees equalled 51.3%–65.2% of operating income each year.

calculated · Calculated from the income statements
Members keep renewingSupported

“At the end of 2025, our member renewal rates were 92.3% in the U.S. and Canada and 89.8% worldwide.”

quoted · COSTCO WHOLESALE CORP /NEW 10-K · period ended 2025-08-31
Growth reflects loyalty, not just pricingMixed

“Membership fee revenue increased 10% in 2025, driven by new member sign-ups and membership fee increases.”

quoted · COSTCO WHOLESALE CORP /NEW 10-K · period ended 2025-08-31
Renewal quality is stableCaveat

“Renewal rates were negatively impacted by a higher number of memberships sold online…”

quoted · COSTCO WHOLESALE CORP /NEW 10-K · period ended 2025-08-31
Earnings held up in a downturnUntested

Operating income grew every year FY2020–FY2025 (4.1% to 23.4%). The window has no year of falling profit to test resilience against.

calculated · Calculated from the income statements

Evidence

The numbers and where they came from

Costco membership fees and operating income. Fiscal years end on the Sunday nearest August 31 (FY2023 was a 53-week year). Labels differ between filings (“Operating Income” vs “Operating income”); the XBRL concept is the same.
Fiscal yearMembership feesOperating incomeFees / op. incomeSource
FY2020$3.54B$5.43B65.2%10-K · 0000909832-22-000021
FY2021$3.88B$6.71B57.8%10-K · 0000909832-22-000021
FY2022$4.22B$7.79B54.2%10-K · 0000909832-22-000021
FY2023$4.58B$8.11B56.4%10-K · 0000909832-25-000101
FY2024$4.83B$9.29B52.0%10-K · 0000909832-25-000101
FY2025$5.32B$10.38B51.3%10-K · 0000909832-25-000101

Costco membership fees and operating income. Fiscal years end on the Sunday nearest August 31 (FY2023 was a 53-week year). Labels differ between filings (“Operating Income” vs “Operating income”); the XBRL concept is the same.

Calculations

Inputs and method, not just results

Fees / operating income, FY2025
Membership fees / operating income5,323,000,000 / 10,383,000,000= 51.27%
Membership fee CAGR
(end / start) ** (1 / periods) − 13,541,000,000 → 5,323,000,000, 5 periods= 8.49%

Checks & caveats

What was verified, and what limits the answer

  • Not disclosed
    Cost of serving members not disclosed

    Fees are revenue, not profit. The filing does not allocate costs to the membership program, so a membership margin cannot be calculated.

  • Caveat
    No downturn in the window

    Operating income rose every year from FY2020 to FY2025.

  • Verified
    Management’s stated design

    This format is designed to reinforce member loyalty and provide continuing fee revenue.

Agent trace

Every tool call, in order

  1. filings.statementMembership fees and operating income for FY2023–FY2025.
    finance filings.statement accession=0000909832-25-000101 statement=income --output json

    Membership fees and operating income for FY2023–FY2025.

    Raw CLI output ↗
  2. filings.statementThe same rows for FY2020–FY2022, including the pandemic year.
    finance filings.statement accession=0000909832-22-000021 statement=income --output json

    FY2020–FY2022 rows. Same XBRL concept, different capitalization in the label.

    Raw CLI output ↗
  3. filings.readRenewal rates and what management says drove membership fee growth.
    finance filings.read accession=0000909832-25-000101 section=mda max_chars=60000 --output json

    Renewal rates, fee growth drivers and the online sign-up caveat.

    Raw CLI output ↗
  4. formula.marginFee share of operating income and fee CAGR, with inputs.
    finance formula.margin numerator=5323M denominator=10383M

    FY2025: 51.27%; CAGR 8.49%.