What to expect from Costco's Q3 earnings amid softness in consumer discretionary spending
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Costco (NASDAQ:COST) is scheduled to announce Q3 earnings results on Thursday, May 25th, after market close.
The consensus EPS Estimate is $3.31 (+4.4% Y/Y) and the consensus Revenue Estimate is $54.58B (+3.8% Y/Y).
Earnings history:
In Q2, the warehouse retailer reported mixed earnings results, revenue fell short of consensus despite 6.5% growth Y/Y. U.S. comparable sales grew 5.8%.
Over the last 2 years, COST has beaten EPS estimates 88% of the time and has beaten revenue estimates 88% of the time.
Over the last 3 months, EPS estimates have seen 5 upward revisions and 10 downward. Revenue estimates have seen 4 upward revisions and 17 downward.
Earlier this month, the company reported April comparable sales growth of 1.4% while e-commerce sales declined 5.9%.
Analysts comment: 
UBS analyst Michael Lasser , "The set up for COST 3Q print is less straightforward than it has been. We already know that its sales have slowed, driven by softness in discretionary categories,â and this has raised the question of the degree to which COST has been investing in price (i.e. competitively pricing its products) to drive its business."
Credit Suisse analyst Karen Short, "There are clearly some signs of weakness with respect to consumers, given many data points on consumers becoming increasingly judicious on their disposable income. While we continue to believe COSTâs best-in-class membership model and value offering will bode well in the current volatile consumer environment, we see continued risk around discretionary demand."
Wall Street is optimistic on COST, with a Buy rating based on 20 Strong Buys, 6 Buys and 10 Holds.
The company gets a Hold rating from SA Analysts as well as SA Quant Rating system.
A brief comparison of the stock performance over the last 12 months with its peers:
More on Costco:
Costco Wholesale returns to positive comparable sales growth in April
Costco raises dividend by 13% to $1.02
Costco March comparable sales slip marginally, shares fall about 3% after hours
Costco coverage started at Buy as William Blair lauds value proposition