Costco Wholesale Corporation (COST) is set to unveil its first-quarter fiscal 2024 financial results on December 14 after the close of trading. Investors’ anticipation is heightened following Deutsche Bank’s recent upgrade of COST to a “buy” recommendation on Monday.
Corroborating the upward trajectory
Analyzing the recent performance of Costco Wholesale, the daily bar chart reveals a consistent upward trend in the past year. The stock currently trades above both the rising 50-day moving average line and the ascending 200-day line, indicating positive momentum. The On-Balance-Volume (OBV) line has shown gains over the past year, corroborating the upward trajectory, although trading volume has slowed. Additionally, the Moving Average Convergence Divergence (MACD) oscillator, a trend-following indicator, maintains a bullish alignment above the zero line.
On the weekly Japanese candlestick chart, COST is seen challenging the highs of early 2022 and trading above the rising 40-week moving average line. Both the weekly OBV line and MACD oscillator are in favorable positions, pointing towards positive sentiment in the market.
Investors are keenly watching for COST’s comparable store sales, a crucial metric to assess the company’s overall performance. In the fourth quarter of fiscal 2023, Costco wholesale exhibited diverse sales performances across regions, with the United States showing a slight increase of 0.2%, Canada experiencing a rise of 1.8%, and robust growth of 5.5% in Other International locations. Overall, the company achieved a modest growth of 1.1% in comparable sales.
Costco Wholesale (COST) Stock Drops After Earnings
Poised for an earnings beat
Looking ahead to the first quarter of fiscal 2024, factors such as consumer spending patterns, inflation trends, and ongoing strategic initiatives will influence COST’s performance. Strong renewal rates and membership growth are expected to contribute positively to sales. Forecasts for the quarter include an anticipated 5.5% increase in net sales, a 5.2% rise in total membership fees, and a 4.1% growth in comparable sales. The steady rise in Costco’s paid membership base is attributed to a growing customer base and impressive renewal rates.
Market analysts estimate revenues of $57.62 billion, reflecting a 5.8% growth from the prior-year figure. Earnings per share are projected to be $3.44, indicating an 11% increase year-over-year. Costco is poised for an earnings beat, as evidenced by a positive Earnings ESP of +1.40% and a Zacks Rank #3.
In addition to Costco wholesale, three other companies with a favorable combination of elements to post an earnings beat are Dollar Tree (DLTR), Ross Stores (ROST), and Target (TGT). Dollar Tree’s Earnings ESP stands at +0.25%, Ross Stores at +0.14%, and Target at +0.37%, all with a Zacks Rank #3.
As Costco gears up for its quarterly report, market watchers are optimistic about the company’s continued growth, underlining the broader positive sentiment in the retail sector. Investors will be closely monitoring the upcoming results for further insights into Costco’s financial health and future outlook.
