Costco Keeps Costs Low For Its Members, But Can Q2 Earnings Boost Share Prices For Its Stockholders? What Investors Should Expect After The Bell

Costco Wholesale Corp COST is set to report fiscal second-quarter earnings after the close. The stock has been trading in a relatively tight range over the last year and a half and appears to be building a bull flag on a monthly basis.

Here's a look at what to expect from the warehouse club retailer after the bell.

What To Know Ahead Of The Report: Costco is expected to report second-quarter earnings of $3.21 per share on revenue of $55.54 billion, according to estimates from Benzinga Pro.

The retailer delivered an upside surprise on both the top and bottom line for six straight quarters before narrowly missing analyst estimates last quarter.

Costco's results included a charge of 15 cents per diluted share, primarily related to the downsizing of its charter shipping activities. A tax benefit of 12 cents per diluted share related to stock-based compensation was also baked into the results.

The company did not provide forward guidance, but it reports sales figures on a monthly basis, so investors can get a read on what to expect from Thursday's results.

From Last Quarter: 4 Costco Analysts On Q1 Earnings Miss: 'Consumables Strength And Improving Membership'

Sales Are Trending Up: Costco reported net sales of $23.8 billion for the month of December, representing a 7% increase year-over-year. Comps were up 6.4% in the U.S. and 9.1% internationally. 

For January, the retailer reported net sales of $16.84 billion, representing an increase of 6.9% year-over-year. For the 22-week period ending Jan. 29, Costco reported net sales of $99 billion, up 7.5% compared to the same period in the prior year.

The company noted the Lunar New Year/Chinese New Year took place 10 days earlier in 2023, negatively impacting total company sales by approximately 0.25%. Comps for the 22-week period were up 7.8% in the U.S., but fell 0.2% internationally. Investors will want to watch for further commentary on the impacts, as the earlier Chinese Lunar New Year could set the retailer up for a stronger fiscal third quarter. 

Costco declared a quarterly cash dividend of 90 cents per share and reauthorized a $4-billion buyback in mid-January, a potential sign the company believes its stock is cheap.

On Monday, Telsey Advisory Group reiterated Costco with an Outperform rating and a price target of $580, signaling the firm likes what it sees from the retailer heading into the print.

From Last Year: Is Costco Raising The Price Of Its Famous Hot Dog Due To Inflation?

COST Price Action: Costco has a 52-week high of $612.27 and a 52-week low of $406.51.

The stock was up 0.49% at $481.01 at the time of writing, according to Benzinga Pro.

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