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The Zacks Retail and Wholesale Sector has been hit harder than most in 2022, down nearly 22% and widely underperforming the S&P 500.

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As an absolute titan in the space, Costco Wholesale (COST - Free Report) is on deck to unveil Q4 results on Sept. 22 after the market close. Costco Wholesale sells high volumes of foods and general merchandise (including household products and appliances) at discounted prices through membership warehouses. It’s one of the biggest warehouse club operators in the U.S., telling us that many eyes will be all over this report.

As it stands, Costco carries a Zacks Rank #3 (Hold) with an overall VGM Score of an A. How does the wholesale titan stack up heading into its quarterly print? Let’s take a deeper dive and find out.

Share Performance & Valuation

Costco shares have been notably defensive in 2022, declining nearly 11% and vastly outperforming the S&P 500’s decline of 18%.

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Over the last three months, COST shares have continued on their market-beating trajectory, increasing 13% in value vs. the general market’s climb of 6.3%.

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The favorable price action that Costco shares have enjoyed tells us that buyers have defended the stock at a much higher level than most, undoubtedly a positive. In addition, COST shares often trade at steep valuation multiples – the company’s 35.1X forward earnings multiple is undoubtedly expensive, representing a steep 42% premium relative to its Zacks Sector.

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Quarterly Estimates

Analysts have been primarily bullish in their earnings outlook over the last several months, with six positive estimate revisions hitting the tape. The Zacks Consensus EPS Estimate of $4.11 suggests year-over-year earnings growth of an impressive 5.4%.

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The company’s top line is in exceptional health as well – the Zacks Consensus Sales estimate of $72 billion pencils in a commendable double-digit 15% year-over-year uptick in revenue.

Quarterly Performance & Market Reactions

Costco has an impressive earnings track record; the wholesaler has exceeded the Zacks Consensus EPS Estimate in eight of its previous ten releases. Just in its latest print, COST penciled in a rock-solid 5.7% bottom line beat.

Top-line results paint the same positive story – Costco has registered eight revenue beats over its last ten quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.

Image Source: Zacks Investment Research

Buyers have come out to play following the company’s releases as of late – following three of its last four prints, shares have moved upwards.

Putting Everything Together

COST shares have been notably strong year-to-date and over the last three months, outperforming the general market by a wide margin in both timeframes. Shares are a bit expensive, with the company’s forward P/E ratio sitting well above its Zacks Sector average.

Analysts have been bullish for the quarter to be reported over the last two months, and estimates allude to a solid uptick in both revenue and earnings. Further, the company has consistently surpassed quarterly estimates, and the market has liked what it’s seen from the wholesaler following the majority of its last four prints.

Heading into the release, Costco Wholesale (COST - Free Report) carries a Zacks Rank #3 (Hold) with an Earnings ESP Score of -0.06%.

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