Uncovering Potential: Costco Wholesale's Earnings Preview

Costco Wholesale COST is gearing up to announce its quarterly earnings on Thursday, 2025-05-29. Here's a quick overview of what investors should know before the release.

Analysts are estimating that Costco Wholesale will report an earnings per share (EPS) of $4.21.

Investors in Costco Wholesale are eagerly awaiting the company's announcement, hoping for news of surpassing estimates and positive guidance for the next quarter.

It's worth noting for new investors that stock prices can be heavily influenced by future projections rather than just past performance.

Earnings Track Record

Last quarter the company missed EPS by $0.08, which was followed by a 6.07% drop in the share price the next day.

Here's a look at Costco Wholesale's past performance and the resulting price change:

Costco Wholesale Share Price Analysis

Shares of Costco Wholesale were trading at $1017.79 as of May 27. Over the last 52-week period, shares are up 25.62%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Analyst Views on Costco Wholesale

Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on Costco Wholesale.

Analysts have provided Costco Wholesale with 16 ratings, resulting in a consensus rating of Outperform. The average one-year price target stands at $1070.62, suggesting a potential 5.19% upside.

Comparing Ratings with Peers

The below comparison of the analyst ratings and average 1-year price targets of Walmart, Target and Dollar General, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.

• Analysts currently favor an Outperform trajectory for Walmart, with an average 1-year price target of $105.53, suggesting a potential 89.63% downside.
• Analysts currently favor an Neutral trajectory for Target, with an average 1-year price target of $115.85, suggesting a potential 88.62% downside.
• Analysts currently favor an Neutral trajectory for Dollar General, with an average 1-year price target of $91.43, suggesting a potential 91.02% downside.

Peer Metrics Summary

The peer analysis summary provides a snapshot of key metrics for Walmart, Target and Dollar General, illuminating their respective standings within the industry. These metrics offer valuable insights into their market positions and comparative performance.

Key Takeaway:

Costco Wholesale ranks highest in Revenue Growth and Gross Profit among its peers. It also has the highest Return on Equity. Costco Wholesale outperforms its peers in all key metrics, showcasing strong financial performance compared to the others in the analysis.

Unveiling the Story Behind Costco Wholesale

Costco operates a membership-based, no-frills retail model predicated on offering a select product assortment in bulk quantities at bargain prices. The firm avoids maintaining costly product displays by keeping inventory on pallets and limits distribution expenses by storing its inventory at point of sale in the warehouse. Given its frugal cost structure, the firm is able to price its merchandise below that of competing retailers, driving high sales volume per warehouse and generating strong profits on thin margins. Costco operates over 600 warehouses in the United States and has over 60% share in the domestic warehouse club industry. Internationally, Costco operates another 280 warehouses, primarily in Canada, Mexico, Japan, and the UK.

Costco Wholesale's Economic Impact: An Analysis

Market Capitalization Analysis: The company's market capitalization is above the industry average, indicating that it is relatively larger in size compared to peers. This may suggest a higher level of investor confidence and market recognition.

Revenue Growth: Over the 3 months period, Costco Wholesale showcased positive performance, achieving a revenue growth rate of 9.04% as of 28 February, 2025. This reflects a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Consumer Staples sector.

Net Margin: Costco Wholesale's net margin lags behind industry averages, suggesting challenges in maintaining strong profitability. With a net margin of 2.81%, the company may face hurdles in effective cost management.

Return on Equity (ROE): Costco Wholesale's ROE surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 7.15% ROE, the company effectively utilizes shareholder equity capital.

Return on Assets (ROA): The company's ROA is a standout performer, exceeding industry averages. With an impressive ROA of 2.44%, the company showcases effective utilization of assets.

Debt Management: Costco Wholesale's debt-to-equity ratio is below the industry average at 0.31, reflecting a lower dependency on debt financing and a more conservative financial approach.

To track all earnings releases for Costco Wholesale visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.