What to Expect When Costco Reports After the Close

Print Email

Costco Wholesale Corp. (NASDAQ: COST) is scheduled to release its fiscal fourth-quarter financial results after the markets close on Thursday. The consensus estimates are calling for $2.54 in earnings per share (EPS) and $47.57 billion in revenue. The same period of last year reportedly had $2.36 in EPS and $44.41 billion in revenue.

For the past several years, Costco has teamed up with General Motors to offer Costco club members special pricing on new GM vehicles through the Costco Auto Program. The 2019 Season of Values promotion began Tuesday, October 1, and runs through January 2, 2020. The 2018 Costco Holiday Season event posted a year-over-year sales increase of 22%.

In addition to GM Supplier Pricing and “compatible” currently available GM incentives (for an unspecified limited time), Costco members who purchase or lease a new model year 2019 or 2020 vehicle and fill out a survey form will receive a Costco Cash Card. Executive members receive a cash card valued at $700, while Gold Star and Business members get a card valued at $300. Vehicles available this year include 2019 and 2020 Chevrolet, Buick, GMC and Cadillac cars and light trucks.

Costco does not make any money on vehicle sales. Affinity Auto, which manages the program for Costco, negotiates a vehicle price with local dealers who are then obligated to offer buyers a set price and forbidden from offering additional options. Any dealer or manufacturer incentives are typically included.

Overall, Costco stock has outperformed the market with a 40% gain year to date. In the past 52 weeks, the stock is up 21.5%.

A few analysts weighed in on Costco ahead of the results:

  • Deutsche Bank has a Hold rating with a $274 price target.
  • Sanford Bernstein rates it as Underperform with a $230 price target.
  • Oppenheimer has a Market Perform rating and a $300 price target.
  • JPMorgan has an Overweight rating with a $330 target price.
  • UBS Group has a Buy rating with a $335 target price.
  • RBC’s Buy rating comes with a $321 price target.

Shares of Costco traded at $284.94 on Thursday, in a 52-week range of $189.51 to $307.34. The consensus price target is $292.08.

I'm interested in the Newsletter