Eyes on Costco's sales, membership numbers during Q4 earnings
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Costco Wholesale (NASDAQ:COST) is set to report fourth quarter results on Tuesday and investors will closely watch for growth in sales and membership numbers at a time when factors such as uncertain economy and impact of inflation has continued to put a dent on consumer spending.
Wall Street expects the Washington-based company to report EPS of $4.82, while revenue is expected to rise 8% at $77.96 billion.
Although Costco reported lighter than anticipated U.S. sales for the third quarter, the discount retailer posting a 5% rise in net sales for the month of July and August is a positive sign that consumer sentiment is bouncing back to normal.
Evercore analyst Greg Melich said that although the quarter had issues including traffic degradation and extended fee hike delay, improvements in trends through the summer months will reduce risk.
Some analysts also pointed out that the company might hike its membership fees during the earnings call.
âIf the hike won't be announced, then I expect it to come at the end of Q1 2024, which would make it coincide with the new year,â said Seeking Alpha analysts Luca Socci, adding that if the company hikes prices, then the stock will ârace upward almost with certainty.â
A recent Seeking Alpha analysis said that the company's focus on international expansion and impressive membership renewal rates indicate strong growth prospects.
Over the last two years, the company has beaten EPS estimates 88% of the time and has beaten revenue estimates 75% of the time.
Analysts are still conservative on Costco with Seeking Alpha analysts and Seeking Alphaâs Quant Ratings considering the stock a âholdâ, while Wall Street analysts rated the stock a âbuyâ.
The stock grew nearly 23% so far this year.

Over the last three years, EPS estimates have seen 11 upward revisions, compared to three downward revisions, while revenue estimates have seen six upward revisions versus seven downward moves. 


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Costco Wholesale posts net sales of $18.42B for August, up 5%