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Here's How Costco (COST) is Placed Ahead of Q1 Earnings

Costco Wholesale Corporation COST is likely to register an increase in the bottom line when it reports first-quarter fiscal 2022 numbers on Dec 9, after the closing bell. We note that the Zacks Consensus Estimate for first-quarter earnings per share has been stable at $2.59 over the past 30 days. The figure suggests growth of roughly 13.1% from the year-ago period.

This Issaquah, WA-based company has a trailing four-quarter earnings surprise of 7.7%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 9.9%.

Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $49,746 million, indicating an improvement of 15.1% from the prior-year reported figure.

Key Factors to Note

Costco’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. In fact, the company’s strategy to sell products at discounted prices has helped draw customers, who have been seeking both value and convenience amid the ongoing crisis. Cumulatively, these factors have been aiding this operator of membership warehouses in registering an impressive sales run.

For the 12-week first quarter ended Nov 21, 2021, Costco registered net sales of $49.42 billion. This reflected an increase of 16.7% from $42.35 billion reported in the year-ago period. Comparable sales during the said period climbed 15% on improvements of 14.9%, 17.2% and 13.4% in the United States, Canada and Other International locations, respectively.

The company has been rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in stores. We note that e-commerce comparable sales increased 14.3% during the aforementioned period.

While abovementioned factors raise optimism about the outcome, margins still remain an area to watch. Any deleverage in SG&A rate, higher labor and occupancy costs, and increased marketing and other store-related expenses might have weighed on margins. The impact of incremental wages and sanitation costs due to the coronavirus outbreak cannot be ignored as well.

Costco Wholesale Corporation Price, Consensus and EPS Surprise

Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Wholesale Corporation Price, Consensus and EPS Surprise

Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Costco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco has a Zacks Rank #3 and an Earnings ESP of +1.18%.

3 More Stocks With Favorable Combination

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

lululemon athletica LULU currently has an Earnings ESP of +1.37% and a Zacks Rank of 2. The company is expected to register top and bottom line growth when it reports third-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for LULU’s quarterly revenues is pegged at $1.43 billion, which suggests growth of 28.1% from the prior-year quarter.

The Zacks Consensus Estimate for lululemon’s quarterly earnings moved up by a penny in the last 30 days to $1.39 per share, suggesting a 19.8% increase from the year-ago reported number. LULU has a trailing four-quarter earnings surprise of 25.2%, on average.

Vail Resorts MTN currently has an Earnings ESP of +5.46% and a Zacks Rank #3. MTN is anticipated to register top-line growth when it reports first-quarter fiscal 2022 results. The Zacks Consensus Estimate for the company's quarterly revenues is pegged at $195.1 million, indicating an improvement of 48.1% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Vail Resorts' bottom line has improved to a loss of $3.66 per share from a loss of $3.70, 30 days ago. MTN has a trailing four-quarter earnings surprise of 17.3%, on average.

Academy Sports and Outdoors ASO currently has an Earnings ESP of +49.78% and a Zacks Rank #3. The company is expected to register bottom-line growth when it reports third-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings of $1.16 per share suggests growth of 27.5% from the year-ago quarter’s reported figure.

Academy Sports and Outdoors’s top line is anticipated to rise year over year. The consensus mark for revenues stands at $1.50 billion, indicating an increase of 11.4% from the figure reported in the year-ago quarter. ASO has a trailing four-quarter earnings surprise of 91%, on average.


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Costco Wholesale Corporation (COST) : Free Stock Analysis Report

lululemon athletica inc. (LULU) : Free Stock Analysis Report

Vail Resorts, Inc. (MTN) : Free Stock Analysis Report

Academy Sports and Outdoors, Inc. (ASO) : Free Stock Analysis Report

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