Costco Q4 Preview: Analyst Calls Retailer 'A Share Gainer' Thanks To Value And Member Loyalty

Core Insights - Costco Wholesale Corporation is expected to report fourth-quarter revenue of $86.11 billion, an increase from $79.7 billion in the same quarter last year [1] - Analysts predict earnings per share of $5.80, up from $5.15 in the previous year’s fourth quarter [2] - Costco has consistently beaten revenue estimates, achieving this in two consecutive quarters and five out of the last ten quarters [2] Earnings Estimates - Fourth-quarter revenue is projected at $86.11 billion, reflecting a year-over-year increase of approximately 15.3% [1] - Expected earnings per share of $5.80 indicates a year-over-year growth of 12.6% [2] Consumer Behavior and Store Traffic - Costco stores in Northern New Jersey showed significant traffic, outperforming competitors like Amazon Fresh and Walmart [3] - The grocery section was noted as the busiest area, with consumers seeking value amidst anticipated price increases due to tariffs [4] - Overall visits to Costco increased by 3.2% year-over-year in April, May, and June, with a further increase of 5.5% in August [6] Membership and Revenue Streams - Membership fees generated $1.24 billion in the third quarter, up from $1.12 billion the previous year, highlighting the importance of this high-margin revenue [9] - The recent membership fee increase in September 2024 is expected to contribute positively to profitability [9] Operational Improvements - Early openings for executive members have been implemented to improve store operations and customer experience [5] - This strategy has reportedly reduced congestion and improved the flow of visitors, enhancing the overall shopping experience [6] Comparable Sales and Growth - Comparable sales rose by 5.7% year-over-year in the third quarter, with growth observed across the US, Canada, and other international markets [8] - Continued growth in store traffic and new store openings will be critical indicators for future performance [7]