Costco Gears Up For Tech-Driven Future: An Earnings Preview

The integration of technology and the grocery sector is steering large retailers toward a consumer-centric future. Larger players have a sharper competitive edge in realizing how some emerging tech can boost their business operations, and Telsey Advisory Group on Monday said Costco Wholesale Corporation COST is quickly catching up just in time for company earnings.

Expected Earnings By The Numbers: Wall Street expects Costco to issue earnings of $4.79 on revenues of $77.86 billion when it issues its fourth-quarter (Q4) report on Tuesday after market close.

The COST Analyst: Joseph Feldman reiterated an Outperform rating on the stock with a $575 price target.

The COST Takeaways: Feldman is bullish about the transformative potential tech holds for the grocery sector. There have been advancements in in-store technologies, unified commerce, and supply chain automation, he said. Innovations like smart carts and POS registers with biometric checkouts will streamline consumer shopping experiences. This could potentially foster growth and consumer loyalty for Costco.

Costco — like Amazon.com, Inc AMZN Kroger Co KR, and Target Corp TGT — is leveraging data and tech to monetize shopping insights. Feldman expects that strategy to be a multi-year source of profitability.

The Issaquah, Washington-based company is likely to realize enhanced operational efficiency, improved shopper experiences, and possibly a surge in demand creation via personalized and targeted marketing through leveraging generative AI and other emerging tech, the analyst said.

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Unified commerce, with its promise of seamless and frictionless shopping experiences across different channels, is a pivotal path forward to gaining market share, Feldman writes.

Costco wields emerging tech amid an ongoing shift in merchandise towards healthier options. Telsey predicts the company will harness innovations and trends to solidify its market standing.

Costco's alignment with these consumer-centric innovations and its continued advancements in data and technology leverage might offer crucial insights into its upcoming earnings report, shedding light on its strategic trajectory and growth potential in the evolving retail landscape.

COST Price action: Shares of Costco are trading down 0.32% to $556.80, according to data from Benzinga Pro.

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