With a market cap of $418.5 billion, Costco Wholesale Corporation (COST) is a global operator of membership warehouses that offer a wide selection of branded and private-label products across diverse categories at discounted prices. The company generates revenue primarily through store sales and membership fees while also operating e-commerce platforms and ancillary services worldwide. The Issaquah, Washington-based company is scheduled to release its Q4 2025 results after the market closes on Thursday, S ...

Core Insights - Costco is set to report its fourth-quarter earnings, following signs of decelerating sales growth earlier this year [3][9] - Analysts remain generally optimistic about Costco's ability to deliver sustainable results despite anticipated volatility in the stock [2][4][9] Financial Performance - For the fourth quarter, Costco's sales reached $84.4 billion, reflecting an 8% increase year-over-year [10] - Comparable store sales increased by 5.7% year-over-year, with analysts projecting a profit of $2.6 million, up from $2.4 million the previous year [10] Stock Performance and Market Sentiment - Costco shares have risen 2.6% this year and approximately 170% over the past five years, with a consensus target price of $1,080 from analysts [11] - The stock has experienced fluctuations, particularly between March and June, and analysts suggest that further volatility may present buying opportunities for investors [5][9]

Core Viewpoint - Analysts project that Costco will report quarterly earnings of $5.81 per share, reflecting a 12.8% year-over-year increase, with revenues expected to reach $86.23 billion, an 8.2% increase from the same quarter last year [1]. Earnings Projections - Over the last 30 days, the consensus EPS estimate has been revised upward by 0.4%, indicating a collective reassessment by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts expect 'Geographic Revenue - Canada' to be $12.02 billion, an 8.5% increase from the prior year [5]. - 'Geographic Revenue - Other International' is projected at $11.74 billion, reflecting a 9.7% year-over-year change [5]. - 'Geographic Revenue - United States' is forecasted to reach $62.63 billion, indicating an 8.2% increase from the previous year [5]. Comparable Sales - 'Comparable sales - Total Company' are expected to be 5.5%, slightly up from 5.4% a year ago [6]. - 'Changes in comparable sales excluding foreign-currency and gasoline prices - Total Company' are projected at 6.5%, down from 6.9% in the previous year [6]. - 'Comparable sales - U.S.' are anticipated to reach 5.6%, compared to 5.3% in the same quarter last year [10]. Warehouse Growth - The total number of warehouses worldwide is projected to reach 913, up from 891 a year ago [7]. - The number of warehouses in the United States and Puerto Rico is expected to be 629, compared to 614 in the previous year [7]. International Sales Performance - 'Changes in comparable sales excluding foreign-currency and gasoline prices - Other International' are expected to be 6.8%, down from 9.3% in the same quarter last year [8]. - For Canada, the estimate for 'Changes in comparable sales excluding foreign-currency and gasoline prices' is 7.1%, down from 7.9% a year ago [9]. - The consensus for the U.S. stands at 6.0%, compared to 6.3% in the previous year [9]. Stock Performance - Costco shares have seen a -0.8% change over the past month, contrasting with a +4% move in the Zacks S&P 500 composite [11].

Costco (NASDAQ: COST ) will report earnings this week. After a year of underperformance , investors wonder whether Costco will deliver alpha or not. While I argue that investing in Costco doesn't hinge on one year's alpha, I think, in fact, that the stock isI’m a long-term investor focused on U.S. and European equities, with a dual emphasis on undervalued growth stocks and high-quality dividend growers. Through years of experience, I’ve learned that sustained profitability—evident in strong margins, stable ...

Core Insights - Membership-based warehouse clubs like Costco, Sam's Club, and BJ's Wholesale are experiencing significant growth due to increased membership and changing consumer demographics, particularly among younger shoppers [2][3][27] Group 1: Membership Growth and Expansion - Costco has nearly 80 million paid household members globally, while BJ's has about 8 million members, reflecting a 55% increase since going public [25] - Sam's Club aims to double its membership over the next eight to ten years, with membership income growing nearly 8% in the most recent quarter [26] - All three retailers are expanding their locations, with Costco planning to open about 30 clubs per year, BJ's targeting 25 to 30 new clubs over the next two fiscal years, and Sam's Club planning to open 15 clubs annually [10][9][8] Group 2: Consumer Trends and Preferences - Younger consumers, particularly Gen Z and millennials, are driving membership growth, with these demographics accounting for half of Sam's Club's membership growth over the past two years [27] - The average age of Costco members has decreased, with nearly half of new members being under 40 [28] - Spending among customers aged 25 to 34 on general merchandise at clubs rose by 3% from January to July 2025 compared to the previous year [29] Group 3: Retail Strategies and Innovations - Warehouse clubs are enhancing the shopping experience by incorporating technology such as curbside pickup, home delivery, and self-checkout options like Sam's Club's Scan & Go, which accounts for about 40% of transactions [18][20] - Costco and BJ's are expanding their digital offerings, with BJ's e-commerce sales jumping 34% in the most recent quarter [20][22] - Clubs are diversifying their merchandise, including trendy brands and private label products, to attract a broader customer base [30][32] Group 4: Economic Factors and Challenges - High inflation has increased the appeal of warehouse clubs as consumers seek cheaper options for groceries and household staples [4] - Retailers are navigating challenges such as an uncertain job market and tariffs, with strategies in place to mitigate the impact of high tariffs on imported goods [11][12] - BJ's plans to carry more holiday items from the U.S. or countries with lower tariff exposure to adapt to these economic pressures [13]

Group 1 - Costco Wholesale Corporation (NASDAQ:COST) is considered a strong long-term investment, with the recommendation to buy shares gradually rather than all at once [1] - The company operates membership-based warehouses that offer a wide range of products, including groceries, appliances, electronics, apparel, and household goods, along with additional services like fuel stations and pharmacies [2] - The former CFO, Richard Galanti, played a significant role in maintaining low prices by instilling a strong sense of accountability among suppliers, contributing to Costco's reputation for value [2] Group 2 - Despite the positive outlook for Costco, there are suggestions that certain AI stocks may present greater upside potential and lower downside risk [2]

Core Insights - Costco Wholesale Corporation is recognized as a strong investment option for beginners, with a 'Hold' rating and a price target of $1,042 from Truist Securities following a robust sales report for August [1][3]. Sales Performance - In August, Costco reported a 6.7% increase in sales, which is a 20 basis points improvement from July's figures [2]. - The net sales for August reached $21.56 billion, marking an 8.7% increase compared to the same month last year [2]. Market Position and Valuation - The sales growth indicates Costco's effectiveness in attracting value-conscious customers through competitive pricing [3]. - Despite the positive sales performance, there are valuation concerns as the stock is currently trading at 50 times the estimated earnings per share for the calendar year 2025 [3]. Business Model - Costco operates membership-based warehouses and e-commerce platforms, providing a limited selection of quality products at low prices to both businesses and individuals [4].

Core Viewpoint - Costco Wholesale Corp has demonstrated strong performance for both consumers and investors, with a stock price increase of approximately 180% over the past five years, driven by its low-cost offerings and effective business model [1]. Group 1: Business Performance - Costco operates over 900 warehouses globally, with around 600 located in the U.S., and has a significant e-commerce presence [5]. - The company generated more than $200 billion in revenue last year, primarily from sales of food, essentials, and general merchandise, with a strategy focused on bulk purchasing to maintain low prices [6]. - Membership fees are a crucial revenue source, with $1.2 billion generated in the recent quarter, contributing to a net income of $1.9 billion [7]. Group 2: Membership and Customer Loyalty - Costco offers two membership tiers, with executive members accounting for nearly half of all memberships and over 70% of global sales, highlighting their importance to growth [8]. - The company maintains a membership renewal rate exceeding 90%, providing visibility on future revenue [8]. Group 3: Tariff Impact and Strategy - The company has faced challenges due to tariffs on imports, but has implemented strategies to mitigate these effects, such as sourcing more products locally and redirecting foreign goods to non-U.S. stores [2][9]. - Approximately one-third of U.S. sales are imports, with imports from China making up about 8% of U.S. sales, indicating a manageable reliance on foreign products [9]. Group 4: Future Outlook - Costco has a history of positive earnings surprises and consistent revenue and earnings growth, suggesting optimism about its ability to navigate the current tariff environment [9][11]. - The upcoming earnings report on September 25 could be pivotal for investor sentiment, with potential for stock price appreciation if positive indicators are presented [3][11]. Group 5: Investment Considerations - Currently trading at 48 times forward earnings estimates, Costco's stock is considered relatively expensive compared to other retailers, but its unique membership model and customer loyalty justify the premium [12]. - Long-term investors are encouraged to consider buying Costco stock regardless of short-term market timing, as the company's fundamentals are likely to support sustained growth [13].

Group 1 - Financial giants have shown a bullish sentiment towards Costco Wholesale, with 43% of traders being bullish and 36% bearish in the options market [1] - A total of 58 unusual trades were identified, with calls valued at $3,073,663 and puts at $1,772,904 [1] - The predicted price range for Costco Wholesale is between $600.0 and $1220.0 based on recent options activity [2] Group 2 - Analyzing volume and open interest is crucial for understanding the liquidity and interest in Costco Wholesale's options [3] - Significant options trades include various call and put options with different sentiments and expiration dates, indicating mixed market expectations [9] - Costco operates over 600 warehouses in the U.S. and holds over 60% market share in the domestic warehouse club industry, with a frugal cost structure allowing competitive pricing [10] Group 3 - A professional analyst has set an average price target of $1100.0 for Costco Wholesale, maintaining an Outperform rating [12][13] - Current trading volume for Costco stands at 1,029,671, with the stock price at $952.21, reflecting a decrease of -0.82% [15]

Core Insights - Costco Wholesale has underperformed the broader market in 2025, with stock up mid-single digits compared to the S&P 500's low double digits increase [1] - The company operates on a membership model that combines low-margin retail sales with high-margin fee income, fostering strong customer loyalty [1] Financial Performance - Recent quarterly results show revenue growth of 8% year over year, with comparable sales increasing by 5.7% (8% excluding gasoline and foreign exchange impacts) [4] - E-commerce sales rose by 14.8% in the quarter, contributing positively to overall performance [4] - Operating income improved, and earnings per share increased to $4.28 from $3.78 a year ago, indicating effective sales growth and expense management [4] Membership Metrics - Membership fee income grew by 10% to approximately $1.24 billion, supported by high renewal rates and an increase in executive memberships [5] - Renewal rates remained above 92% in the U.S. and Canada, demonstrating continued member value perception [5] Consistency and Growth - Monthly updates reflect consistent growth, with fourth-quarter net sales up 8% and full-year fiscal 2025 net sales also up about 8% [6] - Comparable sales increased by 5.7% for the quarter and 5.9% for the year, with e-commerce growth at 13.6% for the quarter and mid-teens for the year [6] Valuation Considerations - Despite strong core business performance and rising membership fee income, the current valuation suggests that near-flawless execution is priced in, leaving little margin for error [7]