Costco Wholesale (NASDAQ:COST) is set to give its latest quarterly earnings report on Thursday, 2024-12-12. Here's what investors need to know before the announcement.
Analysts estimate that Costco Wholesale will report an earnings per share (EPS) of $3.80.
Anticipation surrounds Costco Wholesale's announcement, with investors hoping to hear about both surpassing estimates and receiving positive guidance for the next quarter.
New investors should understand that while earnings performance is important, market reactions are often driven by guidance.
Performance in Previous Earnings
In the previous earnings release, the company beat EPS by $0.07, leading to a 1.75% drop in the share price the following trading session.
Costco Wholesale Share Price Analysis
Shares of Costco Wholesale were trading at $993.4 as of December 10. Over the last 52-week period, shares are up 57.49%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.
Analyst Views on Costco Wholesale
For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding Costco Wholesale.
The consensus rating for Costco Wholesale is Outperform, based on 31 analyst ratings. With an average one-year price target of $973.65, there's a potential 1.99% downside.
Comparing Ratings Among Industry Peers
The analysis below examines the analyst ratings and average 1-year price targets of Walmart, Target and Dollar Gen, three significant industry players, providing valuable insights into their relative performance expectations and market positioning.
Walmart received a Outperform consensus from analysts, with an average 1-year price target of $94.67, implying a potential 90.47% downside. As per analysts' assessments, Target is favoring an Neutral trajectory, with an average 1-year price target of $150.59, suggesting a potential 84.84% downside. As per analysts' assessments, Dollar Gen is favoring an Neutral trajectory, with an average 1-year price target of $89.25, suggesting a potential 91.02% downside. Peer Analysis Summary
The peer analysis summary outlines pivotal metrics for Walmart, Target and Dollar Gen, demonstrating their respective standings within the industry and offering valuable insights into their market positions and comparative performance.
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|---|---|---|---|---|
| Costco Wholesale | Outperform | 0.96% | $10.11B | 10.37% |
| Walmart | Outperform | 5.46% | $42.25B | 5.31% |
| Target | Neutral | 1.06% | $7.29B | 5.91% |
| Dollar Gen | Neutral | 5.05% | $2.94B | 2.69% |
Key Takeaway:
Costco Wholesale ranks at the top for Gross Profit and Return on Equity among its peers. It is in the middle for Revenue Growth.
Delving into Costco Wholesale's Background
Costco operates a membership-based, no-frills retail model, predicated on offering a select product assortment in bulk quantities at bargain prices. The firm avoids maintaining costly product displays by keeping inventory on pallets and limits distribution expenses by storing its inventory at point of sale in the warehouse. Given Costco's frugal cost structure, the firm is able to price its merchandise below competing retailers, driving high sales volume per warehouse and allowing the retailer to generate strong profits on thin margins. Costco operates over 600 warehouses in the United States and boasts over 60% market share in the domestic warehouse club industry. Internationally, Costco operates another 270 warehouses, primarily in markets such as Canada, Mexico, Japan, and the UK.
Costco Wholesale: Delving into Financials
Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.
Revenue Growth: Costco Wholesale's remarkable performance in 3 months is evident. As of 31 August, 2024, the company achieved an impressive revenue growth rate of 0.96%. This signifies a substantial increase in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Consumer Staples sector.
Net Margin: Costco Wholesale's net margin surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 2.95% net margin, the company effectively manages costs and achieves strong profitability.
Return on Equity (ROE): Costco Wholesale's ROE stands out, surpassing industry averages. With an impressive ROE of 10.37%, the company demonstrates effective use of equity capital and strong financial performance.
Return on Assets (ROA): Costco Wholesale's ROA excels beyond industry benchmarks, reaching 3.42%. This signifies efficient management of assets and strong financial health.
Debt Management: Costco Wholesale's debt-to-equity ratio is below the industry average at 0.35, reflecting a lower dependency on debt financing and a more conservative financial approach.
To track all earnings releases for Costco Wholesale visit their earnings calendar on our site.
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