Costco Wholesale Corporation COST will likely highlight its recent membership fee increase and its impact on guidance when the company reports fourth-quarter financial results Thursday after market close.
Earnings Estimates: Analysts expect the retailer to report fourth-quarter revenue of $79.97 billion. That’s up from $78.94 billion in last year's fourth quarter, according to data from Benzinga Pro.
Costco missed analyst estimates for revenue in three of the last five quarters. It also missed estimates in six of the last 10 quarters overall.
Analysts expect Costco to report fourth-quarter earnings per share of $5.08, up from $4.86 in last year's fourth quarter. The company has beaten analyst estimates for earnings per share in six straight quarters and nine of the last 10 quarters.
Key Items to Watch: One of the biggest topics for Costco in the quarter will likely be the membership fee increase that was announced in July and kicked in on September 1. While the membership fee increase won't have a huge impact on the quarter, it could have led to an increase in new memberships and renewals to lock in the lower rate.
Analysts and investors will also be looking to see if Costco quantifies what the membership fee increase could mean for revenue if the company announces forward-looking guidance.
Costco stores saw an increase in visitors in the quarter, according to data from Placer.ai. The report said visits were up 10.5% in June, 7.6% in July and 10.6% in August on a year-over-year basis respectively. The report also found that Costco visit growth was ahead of other competitors like Target, Walmart and BJ's Wholesale Club. Costco visitors also spend more time in stores.
The retailer has had visitors increase every month in 2024 on a year-over-year basis, according to the report.
"Costco's visitation patterns showcase a brand that is positively thriving in 2024. And though it may be too soon to assess the impact of the membership chain's recent fee hike, the warehouse chain appears poised to enjoy a robust November and December holiday season," the report said.
The key question for investors will be if the higher tracked visits in the quarter translated to strong sales growth and average purchase size for customers with the longer time spent in stores.
Price Action: Costco shares trade at $908.22 on Wednesday versus a 52-week trading range of $540.23 to $923.83. Costco stock is up 39.6% year-to-date in 2024.
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