Here Are Factors Influencing Costco's (COST) Q1 Earnings
Costco Wholesale Corporation COST is likely to register an increase in the top line when it reports first-quarter fiscal 2023 results on Dec 8 after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $54.67 billion, indicating growth of 8.6% from the prior-year reported figure.
The bottom line of this Issaquah, WA-based company is anticipated to have improved year over year. Although the Zacks Consensus Estimate for first-quarter earnings per share has decreased by a penny to $3.14 over the past seven days, the figure suggests an increase of 5.7% from the year-ago period.
Costco has a trailing four-quarter earnings surprise of 7.7%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by 1.9%.
Key Factors to Note
Costco’s growth strategies, better price management, decent membership trends and the increasing penetration of the e-commerce business have been contributing to its upbeat performance. The company’s strategy to sell products at discounted prices has helped attract customers who have been seeking both value and convenience amid the inflationary environment.
The abovementioned factors have been aiding this operator of membership warehouses in registering an impressive sales run. Costco’s net sales grew 8.1% to $53.44 billion in the 12-week first quarter ended Nov 20, 2022. Comparable sales increased 6.6% during the said period.
While the abovementioned factors raise optimism about the outcome, margins remain an area to watch. Any deleverage in the SG&A rate, higher labor and occupancy costs, and increased marketing and other store-related expenses might have weighed on margins.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Costco this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Costco has an Earnings ESP of -0.38% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are a few companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Sprouts Farmers SFM currently has an Earnings ESP of +1.09% and a Zacks Rank of 2. The company is expected to register bottom-line growth when it reports fourth-quarter 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of 37 cents suggests growth of 15.6% from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprouts Farmers’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $1.56 billion, indicating an increase of 4.4% from the year-ago quarter. Sprouts Farmers has a trailing four-quarter earnings surprise of 10%, on average.
Ulta Beauty ULTA currently has an Earnings ESP of +2.70% and a Zacks Rank #2. The company is likely to register a decline in the bottom line when it reports fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $5.32 suggests a decline of 1.7% from the year-ago quarter.
Ulta Beauty’s top line is expected to have increased year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.92 billion, which indicates an increase of 7% from the figure reported in the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 26.2%, on average.
Lowe's LOW currently has an Earnings ESP of +0.17% and a Zacks Rank #3. The company is expected to register a bottom-line increase when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of $2.25 suggests an increase of 26.4% from the year-ago quarter.
Lowe's top line is anticipated to rise year over year. The consensus mark for Lowe's revenues is pegged at $22.78 billion, indicating an increase of 6.8% from the figure reported in the year-ago quarter. Lowe's has a trailing four-quarter earnings surprise of 4.5%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
