Deutsche Bank Previews Costco's March Retail Sales

In a report issued Monday, Deutsche Bank's Research Associate Tiffany Kanaga and Research Analyst Paul Trussell provide a preview of Costco Wholesale Corporation COST's March same-store sales. The company will report its results on Wednesday after market close.

For March, the analysts expect a headline comp of -0.1 percent, in line with the Street, and down from February's 1 percent comp. They expect flattish results to be driven by the "calendar shift and with continued FX/gas headwinds." They also note that a negative headline comp would mark the first since August of 2009.

The analysts also project traffic up roughly 3.75 percent in March (versus 5 percent in February), "fully offset by ticket as modest food inflation (CPI Food-at-Home inflation up 2.9% in Feb.) does not compensate for gas and FX."

They forecast core U.S. comp of 7 percent, above consensus of 5.8 percent, driven by strong performance in the Midwest and Southeast. For international operations, they model core comp up about 8 percent, below February's, above January's, and in line with December's.

For now, Deutsche Bank remains on the sidelines with a Hold rating and a $142 price target as they expect FX/gas headwinds to limit sales and EPS growth over the months to come.