“We would therefore expect to continue to see a small decline in our renewal rate as this change in membership mix gets fully reflected in our renewal rate calculation.”

In context

“n cardholders, up 6.1% year over year. In terms of renewal rates at Q4 end, our US and Canada renewal rate was 92.3%, and the worldwide rates came in at 89.8%. The decline in renewal rates was largely attributable to a higher number of online sign-ups entering the renewal rate. And this quarter included a large Groupon campaign in December 2023 entering the calculation. Overall, we view the growth in online sign-ups as a net positive. As they are helping to grow our overall membership base and membership revenue, and are also introducing younger members to Costco. Almost half of our new member sign-ups are now under the age of forty. As we previously shared, new online members renew at a slightly lower rate on average, and they have grown as a percentage of our sign-ups over recent years. We would therefore expect to continue to see a small decline in our renewal rate as this change in membership mix gets fully reflected in our renewal rate calculation. That being said, through a focus on auto renewal and targeted digital communications, our goal is to improve the renewal rate for this cohort of new members in the future. Turning to gross margin. Our reported rate in the fourth quarter was higher year over year by 13 basis points, coming in at 11.13% compared to 11% last year. Gross margin was up three basis points excluding gas deflation. Core was higher by 30 basis points, and higher by 22 basis points without gas deflation. In terms of core margins on their own sales, our core on core margins were higher by 29 basis points. This increase was broad-based with fresh, foods and sundries, and nonfoods all up year over year. Supply chain improvements and an increase in KS penetration benefited margins in all categories. While fresh further”