The Unstoppable Membership Machine

Costco’s recent partnership with DoorDash is a shrewd move in the retail landscape, but it won’t significantly impact this quarter’s earnings report. The numbers are already in, and they paint a picture of a company that doesn’t need the extra boost.

Fiscal Q3 2026 was a banner period for Costco, with digital comparable sales soaring by 21.5% and e-commerce site and app traffic growing an impressive 37%. This trend has been building over several quarters, as seen in Q2’s 22.6% increase in digital comps.

At the heart of Costco’s business model is its membership economics. With over 82.9 million paid members generating $1.37 billion in revenue (up 10.7% from last year), the company has a cash cow on its hands. The worldwide renewal rate is a whopping 89.7%, which keeps investors coming back for more.

The DoorDash deal, while a defensive move to stay ahead of Walmart+ and Amazon Prime, isn’t going to make or break Costco’s earnings. These companies have already set the bar high when it comes to same-day delivery, and Costco knows that staying competitive in this space is crucial.

Investors are likely wondering whether membership renewal rates will hold steady, given a P/E of 45x. Any softness in membership numbers could send shares tumbling. However, given Costco’s track record and the strength of its digital business, it’s unlikely that this will be an issue.

The DoorDash deal might even help drive more sales through the app by making same-day delivery more accessible. This could lead to increased loyalty among highest-spending members. The elephant in the room is Amazon’s Whole Foods acquisition, which has set a new benchmark for grocery delivery. Costco knows it needs to stay competitive if it wants to keep its customers.

While the DoorDash deal is an important strategic move, it won’t be the make-or-break factor in Q4 earnings. Instead, investors should focus on the strength of Costco’s membership engine and its continued ability to drive growth through digital channels.

As the retail landscape continues to evolve, one thing is clear: Costco’s commitment to innovation and customer experience will remain a key differentiator in the market. Whether or not this quarter’s report meets expectations, one thing is certain – the membership machine is unstoppable, and it’s going to keep driving earnings growth for years to come.

Investors should be watching closely, not just for the numbers, but for the trends that are shaping the future of retail. When you’re looking at a company like Costco, with its loyal customer base and innovative approach to e-commerce, it’s clear that this is one business that will continue to thrive long after the dust settles on Q4 earnings.