Costco (COST) Set to Report Q4 Earnings: A Peek Into Comps
Market watchers are eagerly awaiting Costco Wholesale Corporation’s COST fourth-quarter fiscal 2023 results, scheduled to be reported on Sep 26 after the closing bell. This time too, investors’ focus will center around comparable store sales, the key metric to gauge the company’s performance.
Insights Into Comparable Sales
Before delving into the fourth quarter of fiscal 2023, let's revisit the third quarter.
In the last reported quarter, Costco's comparable sales performance displayed a diverse picture across regions. The United States witnessed a slight drop of 0.1% in comparable sales, while Canada experienced a somewhat larger decline of 1%. In contrast, Costco's performance in Other International locations was robust, with a significant increase of 4.1%. Overall, the company managed to achieve modest growth of 0.3% in comparable sales.
As we turn our attention to the fourth quarter, it's important to consider the various factors influencing Costco's performance, including consumer spending trends and the ongoing impact of inflation. Costco's decision to discontinue charter shipping activities is aimed at taking advantage of lower shipping market rates and passing on savings to its members. Additionally, strong renewal rates and membership growth are likely to have contributed to sales.
For the quarter in focus, we anticipate an impressive 7.9% jump in net sales and a notable 6.1% increase in total membership fees. Costco's paid membership base has been on a steady ascent, driven by a growing customer base and remarkable renewal rates. We also project 0.7% growth in comparable sales for the fourth quarter.
A customer-centric approach, strategic pricing, merchandise initiatives and an emphasis on memberships are likely to have contributed to Costco’s overall performance.
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 stands at $78,563 million, indicating an increase of 9% from the prior-year reported figure. The consensus mark for earnings per share has risen by a penny to $4.72 over the past seven days. The figure suggests growth of roughly 12.4% from the year-ago period.
Our proven model does not conclusively predict 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 odds of an earnings beat. However, that’s not the case here.
Costco has a Zacks Rank #3 but an Earnings ESP of -1.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Kroger KR currently has an Earnings ESP of +0.42% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 90 cents suggests an increase of 2.3% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kroger’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $33.93 billion, which indicates a marginal decrease of 0.8% from the figure reported in the prior-year quarter. Kroger has a trailing four-quarter earnings surprise of 6.8%, on average.
Casey's General Stores CASY currently has an Earnings ESP of +1.21% and carries a Zacks Rank #3. The company is likely to register a bottom-line decrease when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.49 suggests a drop of 4.9% from the year-ago quarter.
Casey's General Stores’ top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.07 billion, which indicates a rise of 2.4% from the figure reported in the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 17.5%, on average.
Nordstrom JWN currently has an Earnings ESP of +5.58% and a Zacks Rank of #3. The company is likely to register a decline in the bottom line when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share of 14 cents suggests a drop of 30% from the year-ago quarter.
Nordstrom’s top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.41 billion, which suggests a decline of 3.9% from the figure reported in the prior-year quarter. JWN has a trailing four-quarter earnings surprise of 75.4%, on average.
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The Kroger Co. (KR) : Free Stock Analysis Report
Nordstrom, Inc. (JWN) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
