Valued at a market cap of $417.1 billion, Costco Wholesale Corporation (COST) sells high volumes of foods and general merchandise at discounted prices through membership warehouses. The Issaquah, Washington-based company offers three types of memberships to its customers: Business, Gold Star, and Executive. It is expected to announce its fiscal Q2 earnings results on Thursday, Mar. 6.
Ahead of this event, analysts project the retail giant to report a profit of $4.07 per share, up 9.7% from $3.71 per share in the year-ago quarter. The company has beaten Wall Street's bottom-line estimates in the last two quarters. In Q1, Costco’s EPS of $3.82 marginally outpaced the forecasted figure.
For fiscal 2025, analysts expect COST to report an EPS of $18.01, up 11.8% from a profit of $16.11 in fiscal 2024.
Shares of Costco have soared 40.5% over the past 52 weeks, massively outpacing both the S&P 500 Index's ($SPX) 22.9% rise and the Consumer Staples Select Sector SPDR Fund’s (XLP) 10.2% return over the same time frame.
On Dec. 12, COST released its Q1 earnings results and shares of COST remained fairly stable the following day, despite delivering a mixed performance. Its revenue of $62.2 billion marginally missed Wall Street’s expectations, while its adjusted EPS of $3.82 slightly exceeded the estimates. Both the top and bottom-line figures improved year-over-year. The bottom line increased by 9.8%, while the top line grew by 7.5%.
However, the company’s slightly softer-than-expected comparable sales growth led to its top-line miss. Nonetheless, Costco’s impressive membership renewal rate of 90.4% in the quarter and robust membership fee growth might have offset its revenue miss and led to a stable reaction from the investors.
Wall Street analysts are moderately optimistic about Costco’s stock, with a "Moderate Buy" rating overall. Among 33 analysts covering the stock, 18 recommend "Strong Buy," three indicate “Moderate Buy,” and 12 suggest “Hold.”
The average price target for COST is $1,043.84, which indicates an 8.1% potential upside from the current levels.
