Membership warehouse store chain Costco (COST) will report its fourth-quarter fiscal results on Thursday. Costco stock was roughly flat before the report.
The company is reporting amid signs that it has retained customers it attracted last year during the height of fears over the coronavirus lockdown. But more recently, rising transportation and food costs have threatened margins.
estimates: Wall Street expects Costco earnings per share of $3.58 per share, up 2% from a year ago, according to FactSet. Sales rose 15% to $61.4 billion. Same-store sales were expected to increase by 12.4%.
Results: Before the opening on Thursday at the latest.
Costco stock was 22 cents to 452.33 in the fair today. Shares have fallen in a downward trend in recent days, approaching their 50-day line, after hitting record highs earlier in the month.
Stocks have a strong Composite Rating of 92. Their EPS rating is 87.
Visits to Costco through June, July and August increased compared to 2019, according to Placer.ai, a pedestrian analytics firm. They also rose for rival wholesale clubs BJ’s and Sam’s Club.
“The incredible increase in visits is a strong sign that (Costco) not only managed to have relative strength during the pandemic, but turned that short-term strength into a foundation for long-term success,” wrote Ethan Chernofsky, the company’s VP of marketing. in a blog post this month.
‘Limited gains upside?’
Early last year, customers stormed Costco and other major supermarkets to load up on food and other items, fearing a lengthy quarantine related to the coronavirus. Costco ended fiscal year 2020 with a 9% increase in net sales. Sales in the same store increased by 8% during that time.
For the third quarter, Costco reported same-store sales increase of 15%, excluding the effects of gas price and currency movements. That figure rose by 12.9% in the second quarter.
However, Oppenheimer analysts said in a note this month that they saw “limited gains up” for Costco stock. And they said stocks haven’t fared well after recent quarterly results.
“In addition, we believe that, following the recent outperformance, the robust and accelerating comp trends reported in recent months are now being reflected in equities,” they said.
Cost is a challenge for Costco Stock
Like many other companies, Costco also operates in an environment where employers are starting to pay more to hire employees, as many potential employees are left on the sidelines, aided by unemployment and incentive money, to weigh their career options.
Elsewhere, a supply chain that has been disjointed by the pandemic has pushed up transportation and grocery costs. Ocean freight continues to be supported on major shipping routes between the US and Asia. Warehouses are packed. Truckers are harder to find.
Costco’s rivals have also noticed those challenges. Robert Eddy, CEO of BJ’s Wholesale, said at a conference this month that the company saw supply disruptions in “many, many categories.”
“Think as regards categories Like it seasonal goods Like it patio sets Which to be created in China and sent about here On An boat,” he said. “Think as regards the electronics companies Which power to be assembled in the U.S or Bee least in north America but a lot of by the components come about by Asia. you are see TVs and computers and stuff past allocation.”
“Which stuff persevere in front of An while l think,” said Eddie.
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