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Costco (COST) Lined Up for Q2 Earnings: Can It Beat Estimates?
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Costco Wholesale Corporation (COST - Free Report) is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 numbers on Mar 3, after the closing bell. We note that the Zacks Consensus Estimate for second-quarter earnings per share has increased 1.1% to $2.67 over the past 30 days. The figure suggests growth of roughly 24.8% from the year-ago period.
This Issaquah, WA-based company has a trailing four-quarter earnings surprise of 8.3%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 14.7%.
Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $51,050 million, indicating an improvement of 14% from the prior-year reported figure.
Key Factors to Note
Costco’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. In fact, the company’s strategy to sell products at discounted prices has helped draw customers, who have been seeking both value and convenience amid the ongoing crisis. Cumulatively, these factors have been aiding this operator of membership warehouses in registering an impressive sales run.
The company’s net sales grew 15.5% to $15.76 billion for the retail month of January — the four-week period ended Jan 30, 2022 — from $13.64 billion in the last year. This followed a net sales increase of 16.2% to $22.24 billion in the month of December — the five-week period ended Jan 2, 2022 — from $19.14 billion last year. Comparable sales for the month of January jumped 14.2%, after increasing 14.5% in December.
The company has been rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in stores. We note that e-commerce comparable sales increased 9% and 17.8% in January and December, respectively.
While the abovementioned factors raise optimism about the outcome, margins still remain an area to watch. Any deleverage in SG&A rate, higher labor and occupancy costs, and increased marketing and other store-related expenses might have weighed on margins. The impact of incremental wages and sanitation costs due to the ongoing pandemic cannot be ignored as well.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Our proven model predicts an earnings beat for Costco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco has a Zacks Rank #3 and an Earnings ESP of +0.75%.
3 More Stocks With Favorable Combination
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
DICK'S Sporting Goods (DKS - Free Report) currently has an Earnings ESP of +4.86% and a Zacks Rank #2. The company is expected to register bottom-line growth when it reports fourth-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests growth of 39.5% from the year-ago quarter’s reported figure.
DICK'S Sporting Goods’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $3.31 billion, indicating an increase of 6% from the year-ago quarter. DKS has a trailing four-quarter earnings surprise of 104.2%, on average.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +5.19% and a Zacks Rank #3. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.45 suggests an increase of 39.4% from the year-ago reported number.
Casey's top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.06 billion, which suggests an increase of 52.3% from the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 20.1%, on average.
BJ's Wholesale Club (BJ - Free Report) currently has an Earnings ESP of +0.33% and a Zacks Rank #3. The company is likely to register bottom-line improvement when it reports fourth-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 75 cents suggests an increase of 7.1% from the year-ago quarter’s reported figure.
BJ's Wholesale Club's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.41 billion, which indicates an improvement of 11.7% from the figure reported in the prior-year quarter. BJ has a trailing four-quarter earnings surprise of 17.7%, on average.
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Costco (COST) Lined Up for Q2 Earnings: Can It Beat Estimates?
Costco Wholesale Corporation (COST - Free Report) is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 numbers on Mar 3, after the closing bell. We note that the Zacks Consensus Estimate for second-quarter earnings per share has increased 1.1% to $2.67 over the past 30 days. The figure suggests growth of roughly 24.8% from the year-ago period.
This Issaquah, WA-based company has a trailing four-quarter earnings surprise of 8.3%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 14.7%.
Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $51,050 million, indicating an improvement of 14% from the prior-year reported figure.
Key Factors to Note
Costco’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. In fact, the company’s strategy to sell products at discounted prices has helped draw customers, who have been seeking both value and convenience amid the ongoing crisis. Cumulatively, these factors have been aiding this operator of membership warehouses in registering an impressive sales run.
The company’s net sales grew 15.5% to $15.76 billion for the retail month of January — the four-week period ended Jan 30, 2022 — from $13.64 billion in the last year. This followed a net sales increase of 16.2% to $22.24 billion in the month of December — the five-week period ended Jan 2, 2022 — from $19.14 billion last year. Comparable sales for the month of January jumped 14.2%, after increasing 14.5% in December.
The company has been rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in stores. We note that e-commerce comparable sales increased 9% and 17.8% in January and December, respectively.
While the abovementioned factors raise optimism about the outcome, margins still remain an area to watch. Any deleverage in SG&A rate, higher labor and occupancy costs, and increased marketing and other store-related expenses might have weighed on margins. The impact of incremental wages and sanitation costs due to the ongoing pandemic cannot be ignored as well.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Costco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco has a Zacks Rank #3 and an Earnings ESP of +0.75%.
3 More Stocks With Favorable Combination
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
DICK'S Sporting Goods (DKS - Free Report) currently has an Earnings ESP of +4.86% and a Zacks Rank #2. The company is expected to register bottom-line growth when it reports fourth-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests growth of 39.5% from the year-ago quarter’s reported figure.
DICK'S Sporting Goods’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $3.31 billion, indicating an increase of 6% from the year-ago quarter. DKS has a trailing four-quarter earnings surprise of 104.2%, on average.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +5.19% and a Zacks Rank #3. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.45 suggests an increase of 39.4% from the year-ago reported number.
Casey's top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.06 billion, which suggests an increase of 52.3% from the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 20.1%, on average.
BJ's Wholesale Club (BJ - Free Report) currently has an Earnings ESP of +0.33% and a Zacks Rank #3. The company is likely to register bottom-line improvement when it reports fourth-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 75 cents suggests an increase of 7.1% from the year-ago quarter’s reported figure.
BJ's Wholesale Club's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.41 billion, which indicates an improvement of 11.7% from the figure reported in the prior-year quarter. BJ has a trailing four-quarter earnings surprise of 17.7%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.