Costco Wholesale Corporation (NASDAQ:COST) could offer insight at the health of consumer spending when the retailer reports fourth-quarter financial results Thursday after market close.
Here are the earnings estimates, what analysts are saying ahead of the report, and key items to watch.
Earnings Estimates: Analysts expect Costco to report fourth-quarter revenue of $86.11 billion. That’s up from $79.7 billion in last year’s fourth quarter, according to data from Benzinga Pro.
Costco has beaten analyst estimates for revenue in two straight quarters and in five of the last 10 quarters overall.
Analysts expect Costco to report fourth-quarter earnings per share of $5.80, up from $5.15 in last year’s fourth quarter.
The company beat analyst estimates for earnings per share in the third quarter. It also beat estimates in eight of the last 10 quarters overall.
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What Analysts Are Saying
Costco stores in Northern New Jersey were the busiest compared to traffic checks at Amazon Fresh, Walmart, and Five Below stores.
“The Costco store in Teterboro, NJ, was extremely busy on a Tuesday at 9:45 am, with Executive members enjoying the extra hour of shopping,” Telsey analyst Joseph Feldman said.
The analyst said the Costco store was ready for fall and winter and holidays like Halloween and Christmas.
“The consumer electronics and appliance area had decent traffic, given shoppers seem to be pulling forward big-ticket purchases ahead of anticipated tariff-related price increases.”
Feldman said the grocery area was the busiest part of the store with consumers seeking value.
“We expect Costco to remain a share gainer, with its value-focused merchandising and high member loyalty.”
The analyst maintained an Outperform rating on Costco with a price target of $1,100 in the recent investor note.
Key Items to Watch
Costco’s early openings for executive members began rolling out in June and went nationwide earlier this month.
A report from Placer.ai stated that the early openings are helping alleviate congestion later in the day, reducing the time shoppers spend in-store, all while avoiding extra staffing costs.
“This redistribution helps create a more balanced flow of visitors, likely improving the shopping experience for members overall,” the report said.
Placer.ai describes the move as a “win-win” for both members and the retailer.
The early hours could be a key topic for Costco executives as it improves operations, might increase spending, and lead to more executive memberships.
Costco’s fourth-quarter results cover half of May, ahl of August and the months of June and July.
Placer.ai said overall visits to Costco were up 3.2% year-over-year in the months of April, May and June. Data from the report show that August visits increased by 5.5% year-over-year.
The report highlights that Costco has reported year-over-year visit growth in every quarter since the second quarter of 2021, driven by new store openings and an increase in same-store visits.
Store traffic and new store openings could be items for investors and analysts to watch to paint the picture of what’s ahead for Costco in the next fiscal year.
Comparable sales were up 5.7% year-over-year for Costco in the third quarter, with the three major segments of US, Canada and Other International all seeing growth. Investors and analysts will be looking for growth in regions once again heading into the next fiscal year.
Membership fees will be another area to focus on. This segment generated revenue of $1.24 billion in the third quarter. That’s up from $1.12 billion in the same quarter last year. Costco raised its membership fees in September 2024, its first increase since 2017.
Q4 will have membership fee hikes for many users, and this high-margin revenue remains vital to the company’s profitability.
Price Action: Costco stock is up 0.8% to $951.50 on Wednesday, versus a 52-week trading range of $1,078.23. Costco stock is up 3.8% year-to-date.
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