Categories AlphaGraphs, Analysis, Earnings, Retail

Thriving on e-commerce push, Costco stays composed ahead of earnings

Warehouse club operator Costco Wholesale Corp. (COST) is expected to report results for the fourth quarter on September 6. Analysts expect the company to post earnings of $2.31 per share on revenues of $43.65 billion. In the trailing four quarters, Costco’s earnings came in above estimates three times.

The unique growth strategies, outstanding comparable store performance and quality of the merchandise being offered put Costco at an advantageous position in the sector. This year, upbeat consumer sentiment amidst strong income growth, combined with the heavy discounts offered by the company, reinforced its position in the highly competitive retail space.

For the third quarter, the Issaquah, Washington-based retailer reported a 7% growth in earnings to $1.70 per share, exceeding estimates, helped by robust comparable store sales and double-digit revenue growth.

Unique growth strategies and quality of the merchandise being offered put Costco at an advantageous position in the sector

The highlight of the quarter was a 45% jump in e-commerce sales, a clear indication that the company is adequately equipped to compete with retail giants like Amazon (AMZN) and Walmart (WMT). Recently, it launched an online grocery unit in Ontario, Canada, as part of its efforts to expand global market share.

Costco has been receiving some encouraging reviews from analysts, who are particularly impressed by its strong fundamentals. For the company, low prices continue to be the key to sustaining membership growth, and it cannot afford to lose the existing customers to the e-commerce rivals. In any case, online platforms will find it difficult to match the unique customer experience Costco offers.

RELATED: Costco stock hits a yearly high

Costco’s competitor, BJ’s Wholesale on Tuesday reported better than expected earnings for the second quarter, on an adjusted basis, supported by a 4% increase in sales.

Costco shares have been gaining steadily for several years now, rising about 45% in the past twelve months alone. After hitting an all-time high last week, the stock retreated slightly and closed the previous trading session lower.

RELATED: Costco Q3 earnings beat estimates

Costco third quarter 2018 earnings

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top