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Costco (COST) to Post Q1 Earnings: A Look at Comps Dynamics
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Market watchers are eagerly awaiting Costco Wholesale Corporation’s (COST - Free Report) first-quarter fiscal 2024 results, scheduled to be reported on Dec 14 after the closing bell. This time too, investors’ focus will be on comparable store sales, the key metric to gauge the company’s performance.
Insights Into Comparable Sales
Before delving into the first quarter of fiscal 2024, let's revisit the fourth quarter of fiscal 2023.
In the last reported quarter, Costco's comparable sales performance displayed a diverse picture across regions. The United States witnessed a slight increase of 0.2% in comparable sales, while Canada experienced an increase of 1.8%. Costco's performance in Other International locations was robust, with a significant increase of 5.5%. Overall, the company managed to achieve modest growth of 1.1% in comparable sales.
Worldwide, there was a 5.2% increase in shopping frequency, with a 5% rise observed in the United States. In contrast, the average transaction or ticket size experienced a decrease of 3.9% globally and 4.5% in the United States.
As we turn our attention to the first quarter, it's important to consider the various factors influencing Costco's performance, such as consumer spending patterns, inflation trends, and ongoing strategic initiatives. Additionally, strong renewal rates and membership growth are likely to have contributed to sales.
For the quarter in focus, we anticipate an impressive 5.5% jump in net sales and a 5.2% increase in total membership fees. Costco's paid membership base has been witnessing a steady rise, driven by a growing customer base and remarkable renewal rates. We also project 4.1% growth in comparable sales for the first quarter.
A customer-centric approach, strategic pricing, merchandise initiatives and emphasis on memberships are likely to have contributed to Costco’s overall performance. We expect membership growth of 5.5% in the first quarter.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
The Zacks Consensus Estimate for revenues is pegged at $57.62 billion, indicating growth of 5.8% from the prior-year reported figure. The consensus mark for earnings per share has risen by a penny to $3.44 over the past 30 days. The figure suggests an increase of 11% from the year-ago period.
Our proven model predicts an earnings beat for Costco this time. 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, which is the case here.
Costco has an Earnings ESP of +1.40% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 Other Stocks With the Favorable Combination
Here are three companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +0.25% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.65 suggests an increase from $2.04 reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar Tree’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.67 billion, which indicates a rise of 12.4% from the figure reported in the prior-year quarter.
Ross Stores (ROST - Free Report) currently has an Earnings ESP of +0.14% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $1.62 suggests an increase of 23.7% from the year-ago quarter.
Ross Stores’ top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.75 billion, which indicates an increase of 10.2% from the figure reported in the prior-year quarter. Ross Stores has a trailing four-quarter earnings surprise of 7.8%, on average.
Target (TGT - Free Report) currently has an Earnings ESP of +0.37% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.38 suggests an increase of 25.9% from the year-ago quarter.
Target’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $31.88 billion, which indicates an increase of 1.6% from the figure reported in the prior-year quarter. Target has a trailing four-quarter earnings surprise of 30.8%, on average.
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Costco (COST) to Post Q1 Earnings: A Look at Comps Dynamics
Market watchers are eagerly awaiting Costco Wholesale Corporation’s (COST - Free Report) first-quarter fiscal 2024 results, scheduled to be reported on Dec 14 after the closing bell. This time too, investors’ focus will be on comparable store sales, the key metric to gauge the company’s performance.
Insights Into Comparable Sales
Before delving into the first quarter of fiscal 2024, let's revisit the fourth quarter of fiscal 2023.
In the last reported quarter, Costco's comparable sales performance displayed a diverse picture across regions. The United States witnessed a slight increase of 0.2% in comparable sales, while Canada experienced an increase of 1.8%. Costco's performance in Other International locations was robust, with a significant increase of 5.5%. Overall, the company managed to achieve modest growth of 1.1% in comparable sales.
Worldwide, there was a 5.2% increase in shopping frequency, with a 5% rise observed in the United States. In contrast, the average transaction or ticket size experienced a decrease of 3.9% globally and 4.5% in the United States.
As we turn our attention to the first quarter, it's important to consider the various factors influencing Costco's performance, such as consumer spending patterns, inflation trends, and ongoing strategic initiatives. Additionally, strong renewal rates and membership growth are likely to have contributed to sales.
For the quarter in focus, we anticipate an impressive 5.5% jump in net sales and a 5.2% increase in total membership fees. Costco's paid membership base has been witnessing a steady rise, driven by a growing customer base and remarkable renewal rates. We also project 4.1% growth in comparable sales for the first quarter.
A customer-centric approach, strategic pricing, merchandise initiatives and emphasis on memberships are likely to have contributed to Costco’s overall performance. We expect membership growth of 5.5% in the first quarter.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation Quote
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for revenues is pegged at $57.62 billion, indicating growth of 5.8% from the prior-year reported figure. The consensus mark for earnings per share has risen by a penny to $3.44 over the past 30 days. The figure suggests an increase of 11% from the year-ago period.
Our proven model predicts an earnings beat for Costco this time. 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, which is the case here.
Costco has an Earnings ESP of +1.40% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 Other Stocks With the Favorable Combination
Here are three companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +0.25% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.65 suggests an increase from $2.04 reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar Tree’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.67 billion, which indicates a rise of 12.4% from the figure reported in the prior-year quarter.
Ross Stores (ROST - Free Report) currently has an Earnings ESP of +0.14% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $1.62 suggests an increase of 23.7% from the year-ago quarter.
Ross Stores’ top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.75 billion, which indicates an increase of 10.2% from the figure reported in the prior-year quarter. Ross Stores has a trailing four-quarter earnings surprise of 7.8%, on average.
Target (TGT - Free Report) currently has an Earnings ESP of +0.37% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.38 suggests an increase of 25.9% from the year-ago quarter.
Target’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $31.88 billion, which indicates an increase of 1.6% from the figure reported in the prior-year quarter. Target has a trailing four-quarter earnings surprise of 30.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.