Image Source: Pexels
 

Market watchers are eagerly awaiting Costco Wholesale Corporation’s (COST - Free Report) 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.

More By This Author: