What to Expect When Costco Reports After the Close

Costco Wholesale Corp. (NASDAQ: COST) is scheduled to release its most recent quarterly earnings report after the markets close on Thursday. The consensus estimates from Thomson Reuters call for $2.02 in earnings per share (EPS) and $41.55 billion in revenue. The fiscal fourth-quarter of last year reportedly had $1.77 in EPS and $36.56 billion in revenue.

This is one of the few conventional retailers where metrics like store traffic, market share gains and a validated model could prove to be healthy for growth and expansion. The company is largely unharmed by e-commerce, and it continues to add stores.

Many think that Costco might be impervious to Amazon’s advances due to its model, while others argue that it very well may be Amazon’s next target.

In its most recent quarter, Costco beat estimates on the bottom line but revenues were not up to par. Also consolidated same-stores sales rose 5% year over year in the third quarter, with gains of 6% domestically, 2% in Canada and 4% internationally. Excluding gasoline sales and currency exchange effects, consolidated same-store sales rose 5%, with a rise of 5% in the United States, 3% in Canada and 6% internationally.

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Considering oil and gas prices have risen over the past quarter, same-store sales for the quarter might see a small boost.

A few analysts weighed in on Costco ahead of the earnings report:

• Guggenheim has a Neutral rating.
• Robert Baird has a Buy rating with a $200 price target.
• Deutsche Bank has a Hold rating with a $172 price target.
• Oppenheimer has a Buy rating with a $185 price target.
• BMO Capital Markets has a Hold rating with a $160 price target.
• Cowen has an Outperform rating with a $182 price target.
• Wells Fargo has a Hold rating.
• Stifel has a Buy rating with a $173 price target.

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So far in 2017, Costco has underperformed the U.S. broad markets, with the stock up only 7%. Over the past 52 weeks, the stock was up closer to 14%.

Shares of Costco were last seen at $166.39, with a consensus analyst price target of $181.41 and a 52-week range of $142.11 to $183.18.

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