What to Expect From Costco Earnings

Costco Wholesale Corp. (NASDAQ: COST) is scheduled to report its fiscal second-quarter financial results after the markets close on Wednesday. The consensus estimates from Thomson Reuters call for $1.28 in earnings per share (EPS) on revenue of $28.42 billion. In the same period of the previous year, it posted EPS of $1.25 and $27.45 billion in revenue.

In the new American Customer Satisfaction Index (ACSI) study on retailers, most of the attention went to big-box stores and e-commerce companies. Deep in the research was the section about “specialty retail stores,” a category in which Costco received the best score.

Costco is admired for its sharp expense management, store locations and a model that includes membership fees as a means to supplement revenue. While many brick-and-mortar retailers have struggled, Costco’s revenue has risen from $77.9 billion in 2010 to $116.2 billion in its most recent fiscal year. Net income has risen from $1.3 billion to $2.4 billion over the same period. Unlike some other retailers that have over 1,000 locations, and in some cases a multiple of that, Costco has just 482 stores in the United States and Puerto Rico.
[recirclink id=318048]
A few analysts weighed in on Costco prior to the earnings report:

• Piper Jaffray reiterated an Overweight rating with a $174 price target.
• Cleveland Research downgraded it to a Neutral rating from Buy.
• Morgan Stanley reiterated an Overweight rating.
• Oppenheimer reiterated a Buy rating.
• Deutsche Bank reiterated a Buy rating.

So far in 2016, Costco has underperformed the broad markets, with the stock down about 6.5% year to date. Over the past 52 weeks, the stock is up nearly 3%.

Shares of Costco were trading up fractionally at $151.32 on Wednesday, with a consensus analyst price target of $168.33 and a 52-week trading range of $117.03 to $169.73.

Contact [email protected] for any questions or corrections.