Categories Analysis, Earnings, Retail

Earnings Preview: Costco to see strength in Q4

Costco Wholesale Corporation (COST) is scheduled to report fourth-quarter 2018 results on October 4. Analysts expect the company to deliver revenues of $44.4 billion, reflecting a 5% year-over-year growth, along with earnings of $2.34 per share, which would indicate a 12.5% YoY growth, for this quarter.

The company topped market expectations for the third quarter, and it is expected to do so for the fourth quarter too. In the third quarter, sales grew 12% to $32.3 billion while earnings rose 7% to $750 million or $1.70 per share.

Also see: Costco Q4 earnings rise on higher revenues; stock falls

Last quarter, total comparable sales increased by 10.2%. For the fourth quarter, the company is expected to see strength from comp sales which will be helped by improvements in store traffic. Costco’s strategy of providing discounts as well as its other initiatives have helped boost the company’s growth.

In the previous quarter, the company saw strong sales growth in both its stores and online channel. E-commerce sales were up 37%. Costco has been broadening its e-commerce footprint across the US and to several other countries. Any updates on e-commerce would be an essential area to keep an eye on.

Despite the weakness seen in the retail industry, Costco is expected to deliver positive results for the fourth quarter which in turn could give the stock a lift. A majority of analysts have given Costco ratings of Strong Buy and Buy. The stock is up over 26% so far this year, and over the past three months, it is up 12%.

Costco stock drops despite Q3 earnings beat

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