Costco Stock Faces Test Ahead Of Q1 Earnings

Core Insights - Costco Wholesale is set to announce earnings on December 11, 2025, with a market capitalization of $394 billion and revenue of $275 billion over the past 12 months, resulting in an operating profit of $10 billion and net income of $8.1 billion [3]. Historical Performance - Over the past five years, Costco has recorded 19 earnings data points, yielding 12 positive and 7 negative one-day (1D) returns, resulting in a positive return rate of approximately 63%. This rate decreases to 55% when examining the last three years [9]. - The median of the 12 positive returns is 2.4%, while the median of the 7 negative returns is -2.4% [9]. Trading Strategies - Two approaches are suggested for event-driven trading: familiarizing with historical odds and positioning ahead of the earnings announcement, or observing the relationship between immediate and medium-term returns post-earnings to inform positioning after results are disclosed [4]. - A low-risk strategy involves understanding the correlation between short-term (1D) and medium-term (5D) returns post-earnings, allowing traders to take a "long" position for the subsequent 5 days if the 1D post-earnings return is positive [6]. Peer Comparison - The performance of peers can influence post-earnings stock reactions, with historical data showing Costco's stock performance compared to peers reporting earnings just prior [7]. - For smoother investment options, the Trefis High Quality (HQ) Portfolio, which includes 30 stocks, has consistently outperformed benchmarks like the S&P 500, S&P mid-cap, and Russell 2000 indices [8].