A Preview Of Costco's September Sales Suggests Sluggish Comps

Costco Wholesale Corporation COST has experienced a wild ride after releasing its fourth quarter earnings last week. The world's second-largest retailer is set to release its September sales data this week, amid speculation that the company may raise its membership fees.

Analysts at Baird are modeling September global comps of 1-2 percent for the month, slightly below August's 2 percent mark. Despite a lower estimate from the month prior, Baird analysts believe Costco consumers will soon realize the benefits of the new co-branded Visa IncV card, after the company made the switch from longtime partner American Express Company AXP.

While Costco is facing a difficult compare versus its traffic last year, a slowdown in traffic in August was driven by moderate global traffic. Analysts do believe expect better trends later in the year, with traffic expected to pick up.

"We continue to expect the new Visa card to drive increased uptake and spend by both individual and small business members in the months ahead," said Baird.

Baird maintained an Outperform rating with a $175 price target on Costco.