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What to Expect from Costco Wholesale Corporation Earnings Report for the Fourth Quarter?

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When it reports its results for the fourth quarter of the fiscal year 2022 on September 22 after the closing bell, Costco Wholesale Corporation (NASDAQ: COST) is likely to report an increase on top of its income statement. The Zacks Consensus Estimate is now set at $71.84 billion and would represent an increase of 14.6% compared to the reported figure before. It is projected that the bottom line of this corporation, which is situated in Issaquah, Washington, has increased from the previous year. Report over the past month, the Zacks Consensus Estimate for fourth-quarter earnings per share has grown to $4.11, reflecting an increase of a few pennies. The number indicates a 5.4% increase from the previous year’s period. In the most recent four quarters, Costco has delivered an average earnings surprise of 9.7%. The Zacks Consensus Estimate for the company’s bottom line exceeded 5.7% during the most recent reported quarter. 

Costco Wholesale Corporation Success

The optimistic success of Costco Wholesale Corporation (NASDAQ: COST) can be attributed to several factors, including the company’s expansion initiatives, improved pricing management, positive membership trends, and rising penetration of the e-commerce industry. Customers looking for value and convenience amid the current inflationary climate have been aided by the strategy of the company to sell products at discounted prices, which has helped the company acquire customers. This operator of membership warehouses has accomplished an excellent sales run with the assistance of the variables discussed above. During the 16 weeks of the fourth quarter that ended on August 28, 2022, Costco’s net sales increased by 15.3% to $70.8 billion. During the period mentioned above, comparable sales increased by 13.7%. The corporation has swiftly adopted the omnichannel ethos to create a consistent shopping experience regardless of whether the customer is purchasing online or in-store. During the 16-week period that ended on August 28, 2022, comparable sales for online retailers had a 7.1% gain. 

While the abovementioned variables give reason to be optimistic about the outcome, margins should be kept under close observation. It’s possible that a deleveraging in the SG&A rate, more significant labor and occupancy costs, increased marketing and other store-related expenses, and other factors all contributed to margins being lower than expected. 

The Zacks Model Reveals What It Reveals 

Our time-tested methodology does not guarantee that Costco Wholesale Corporation (NASDAQ: COST) will exceed its earnings this quarter. The likelihood of payments increases when a company has a positive Earnings ESP in addition to a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) rating. However, it is not the case in this particular instance. Costco’s earnings Estimate Surprise percentage is -0.06%, and the company is ranked #3 by Zacks. Using our Earnings ESP Filter, you can find out which stocks are the best to buy or sell before the earnings are published.

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