Costco Wholesale (NASDAQ:COST) is set to report first quarter results on Thursday.
Wall Street expects the Washington-based company to report EPS of $3.43, implying a rise of 10.6%, while revenue is expected to rise 6.2% at $57.79 billion.
Earlier in September, Costco posted higher-than-expected quarterly profit and sales. The company also reported a Y/Y rise in net sales for the retail month of November, while also delivering an increase in comparable sales.
Even though discretionary spending remains limited amid a comparatively weak economy, Costco is benefiting from its loyal customer base flocking to its stores and lower price for everyday items.
Costco’s first quarter sales and margin numbers can give investors an idea of how the holiday session is looking for the wholesale retailer.
Some analysts also pointed out that the company might announce a membership fee hike.
“More and more people are expecting a membership fee hike of $5 and a special dividend. A fee increase of 8.3% would have a direct impact on Costco’s earnings, with a big boost to its net income for its correlation with the fee,” said Seeking Alpha analyst Luca Socci.
Over the last two years, the company has beaten EPS estimates 88% of the time and has beaten revenue estimates 75% of the time.
Seeking Alpha analysts and Seeking Alpha’s Quant Ratings are conservative on Costco and consider the stock a “Hold”. However, 27 out of 38 Wall Street analysts surveyed by Seeking Alpha rated the stock a “Buy” and above, nine consider it a “Hold” and two “Sell”.
The stock grew nearly 40% so far this year.
Over the last three years, EPS estimates have seen eight upward revisions, compared to four downward revisions, while revenue estimates have seen seven upward revisions versus six downward moves.
