0826 ET - Costco's membership fee income is coming primarily from members upgrading to higher tiers, not from new membership growth. Paid membership growth slowed sequentially during the recent quarter, now significantly below the company's recent-years and long-term averages, Morgan Stanley analysts say in a research note. They attribute the slowdown to a higher mix of in-fill openings and fewer new-market openings, particularly in China and Japan. "As membership fee income represents 50% of Costco's operating income, paid membership growth needs to reaccelerate in coming quarters in order to support the stock's premium valuation," they write. (connor.hart@wsj.com)

(END) Dow Jones Newswires

May 29, 2026 08:26 ET (12:26 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.