Will Costco's worldwide membership renewal rate drop below 88% by Q4 FY2026?

Worldwide renewal rate is 89.7% as of Q2 FY2026 (flat QoQ vs prior ~20bps/q decline trajectory). For the rate to drop below 88% by Q4 FY2026, we would need a ~170bps decline over Q3 + Q4, an acceleration of ~85bps/quarter — 4-8x the historical pace. Management explicitly cited targeted retention programs, auto-renewal adoption, and digital-member maturation as having 'adjusted the trajectory.' Q2 was the inflection quarter. Two months into Q3 with no contradicting public data, the prior is even stronger that the prior 0.03 estimate holds. The only path to YES is a discontinuous step-change (not consistent with the membership model's renewal stickiness). Marginal 3% reflects irreducible tail risk from a hypothetical macro shock or Kirkland brand event.

Slightly higher than Run 1 to reflect that 50 days have elapsed since Q2 print without independent confirming data. Q3 FY2026 ends ~May 11, 2026 with results late May — that's the next observation point. The base rate of going from 89.7% to <88% in two quarters absent identifiable shock is very low, consistent with E2-grade ladder evidence. The structural risk from digital sign-up renewals maturing remains live but not imminent. The prior April refresh estimate of 0.03 is robust; I sit slightly above to incorporate measurement variance and the possibility that auto-renewal adoption is overstated by management.

Holding to 0.03 — Q2 stabilization is the dominant evidence and no new data since. The membership model has historically exhibited extreme renewal stickiness; the 89.7% level has been stable within a 30bps band for multiple years. A drop below 88% by Q4 FY2026 would require either (a) a brand-level event impacting Kirkland or core warehouse experience, or (b) a structural shift in digital member retention that the Q2 data already contradicted. Neither is observable.

Marginal 100bps higher than other runs to capture: (1) management's qualifier 'may see a few more quarters' before maturation point reached, leaving open the possibility of further mild decline, and (2) consumer staples industry pressure is rising — competitor membership programs (Sam's Club Plus tier) are being marketed aggressively. Even with these factors, getting from 89.7% to <88% in two quarters remains improbable. 0.04 is a calibration upper-bound for HIGH-confidence NO.

WW at 89.7% stable; need 170bps drop in two quarters to trigger YES. Historical pace was ~20bps/q before stabilizing. Q2 management commentary is positive. Probability remains very low at 3%.