Earnings Report Watcher: Costco Q4 Earnings Are About to Be Released
Costco’s Q4 earnings are coming up soon—after the U.S. stock market close on September 24. Now, the market already knows part of the answer: the company previously reported Q4 net sales of $9.39 billion, up 11.3% year over year. After stripping out the impacts of oil prices and exchange rates, comparable sales grew 6.7%, and digital business comparable sales rose even more, by 19.8%.
So, what this earnings report is really worth watching isn’t whether revenue can keep growing—it’s whether profits can keep up.
Currently, the market expects Q4 revenue of about $9.49 billion, and EPS of approximately $6.53–$6.55.
Costco’s challenge is also pretty clear: the business fundamentals remain strong, but the valuation itself isn’t low anymore. Naturally, the market’s tolerance for any underperformance will decline. In Q3, revenue was solid and EPS was slightly below expectations, and the stock price subsequently saw a noticeable pullback.
So this time, there are three key data points to focus on: first, whether EPS beats expectations; second, how gross margin and expense control look; and third, whether member count, renewal rate, and growth in higher-end Executive members can continue to hold up.
There’s another variable that’s easy to overlook: whether the market is expecting a special dividend. Recently, some institutions have discussed special dividends as a potential catalyst.
For trading, Costco right now is more like a “high-expectations exam”: a beat on earnings may not necessarily lead to a big jump in the stock price, but if profits, members, and guidance all come in below expectations at the same time, valuation pressure could be further amplified.
So this time, don’t just look at “11% revenue growth.” What ultimately determines the stock price reaction is whether profit growth can justify the current valuation.
Costco’s Q4 earnings are coming up soon—after the U.S. stock market close on September 24. Now, the market already knows part of the answer: the company previously reported Q4 net sales of $9.39 billion, up 11.3% year over year. After stripping out the impacts of oil prices and exchange rates, comparable sales grew 6.7%, and digital business comparable sales rose even more, by 19.8%.
So, what this earnings report is really worth watching isn’t whether revenue can keep growing—it’s whether profits can keep up.
Currently, the market expects Q4 revenue of about $9.49 billion, and EPS of approximately $6.53–$6.55.
Costco’s challenge is also pretty clear: the business fundamentals remain strong, but the valuation itself isn’t low anymore. Naturally, the market’s tolerance for any underperformance will decline. In Q3, revenue was solid and EPS was slightly below expectations, and the stock price subsequently saw a noticeable pullback.
So this time, there are three key data points to focus on: first, whether EPS beats expectations; second, how gross margin and expense control look; and third, whether member count, renewal rate, and growth in higher-end Executive members can continue to hold up.
There’s another variable that’s easy to overlook: whether the market is expecting a special dividend. Recently, some institutions have discussed special dividends as a potential catalyst.
For trading, Costco right now is more like a “high-expectations exam”: a beat on earnings may not necessarily lead to a big jump in the stock price, but if profits, members, and guidance all come in below expectations at the same time, valuation pressure could be further amplified.
So this time, don’t just look at “11% revenue growth.” What ultimately determines the stock price reaction is whether profit growth can justify the current valuation.