Costco is set to close out another busy week of retail earnings when it reports fiscal third-quarter results on Thursday after the market closes. Unlike most of its peers, the Issaquah-based warehouse club walks into the print with the bulk of the quarter's narrative already written.

The company's April sales release on May 6^th disclosed net sales of $23.92 billion for the four weeks ended May 3^rd, up 13.0% year-over-year, with comparable sales rising 11.6% on a reported basis and 7.8% excluding gasoline and foreign exchange effects.

That follows a March print of +9.4% total comparable sales (+6.2% ex-gas/FX), giving investors a near-complete picture of the 12-week quarter before management ever takes the stage on the earnings call. With the stock pulling back from a recent 52-week high, the setup remains compelling.

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Digging Deeper into Costco’s Upcoming Announcement

The Zacks Consensus Estimate for the quarter is currently pegged at $4.91 in EPS and roughly $69.5 billion in revenue, implying year-over-year growth of around 15% on the bottom line and roughly 10% on the top line versus the prior-year period. The consensus trend shows estimates have risen slightly over the past 60 days.

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Importantly, Costco has now beaten Zacks Consensus EPS estimates in a majority of its trailing quarters, though management's conservative guidance philosophy means surprises tend to be measured rather than dramatic.

The competitor read-through into this print is particularly informative. Walmart's fiscal first-quarter release last week showed Sam's Club U.S. comparable sales of +3.9% excluding fuel — a meaningful deceleration from the +6.7% posted in the prior-year period — with transactions up 6.2% but average ticket actually declining 2.2%. That pattern at Sam's matters because it is the closest direct analogue to Costco's business model: membership-based warehouse retail, heavy grocery mix, similar pack sizes, and overlapping geographic footprint.

The ticket compression at Sam's likely reflects mix shift toward consumables and away from higher-margin general merchandise, a dynamic that bears watching when Costco discusses its own basket composition Thursday evening. Meanwhile, Home Depot and Lowe's both posted comparable sales of just +0.6%, underscoring once again that the consumer is plainly prioritizing essentials over discretionary big-ticket projects — a setup that should continue to favor Costco's grocery-and-staples-weighted assortment.

Costco Investors Eyeing Membership Renewals

The consumer-trends narrative around Costco has been remarkably consistent for the better part of two years, and the upcoming print is unlikely to disrupt it. Inflation-weary shoppers continue to migrate toward bulk-format value, and Costco has captured a disproportionate share of that traffic. Digitally-enabled comparable sales — the metric that has perhaps surprised the bulls most over the past year — ran at +18.8% in April and +23.3% in March, suggesting that Costco's long-standing digital weakness is meaningfully behind it.

The company is now blending warehouse-fulfilled e-commerce, the Costco Logistics big-and-bulky delivery network, and an expanding marketplace presence in a way that is finally moving the needle. On the membership side, investors will be paying close attention to the global renewal rate, which has historically hovered above 90% and serves as the single best proxy for the durability of the entire business model. Any slip toward the high-80s would dent the bull case meaningfully; a stable read in the low-90s effectively validates the current premium multiple.

That premium multiple is, of course, the elephant in the room. Costco (COST Quick QuoteCOST - Free Report) shares have climbed roughly 16% year-to-date and trade at a forward P/E in the neighborhood of 50x, well above the broader retail group and richer than any other large-cap mass merchandiser.

The risk for shareholders heading into Thursday is therefore a "good-but-not-great" outcome — the type of clean beat that has historically been met with a muted or negative tape reaction because expectations were already so elevated. We saw a similar dynamic play out at Walmart last Thursday, when a beat on both revenue and EPS still produced a notable decline.

Bottom Line

There are also two wildcards that could materially move shares in either direction. The first is a potential special dividend; Costco has historically paid one every three to five years, with the last sizeable distribution recorded in late 2023, putting the company squarely within the window where another might be announced. The second is any commentary or quantification of potential tariff-related refunds, which some analysts believe could ultimately translate into a sizable non-recurring income boost.

Neither is factored into consensus estimates, and either disclosure could create the kind of clean upside catalyst that would justify a positive post-print reaction even at current valuations. Conversely, any softening in renewal rates, or commentary suggesting that tariff cost pressures will pressure the gross margin line in the second half, would likely be punished sharply.

Overall, Costco enters Thursday's report in a position that few retailers can claim: monthly sales data already pointing to a clean operational quarter, a customer base that continues to lean in despite a wobbly broader consumer backdrop, and best-in-class execution against a peer set that has largely been treading water. The question is whether the print can clear the very high bar that the stock's year-to-date run has set.