Will Costco (COST) Beat Earnings? - Analyst Blog

By
A A A

Costco Wholesale Corporation ( COST ) is slated to report its first-quarter fiscal 2014 results on Dec 11, 2013. In the last quarter, it posted a negative surprise of 4.1%. Let's see how things are shaping up for this announcement.

Factors this Past Quarter

Costco posted lower-than-expected fourth-quarter fiscal 2013 results, as the rate of increase in sales decelerated. The warehouse retailer's total revenue climbed 0.8% to $32,487 million from the prior-year quarter, but fell short of the Zacks Consensus Estimate of $32,702 million. Moreover, the top-line growth rate narrowed to 0.8% in the reported quarter from 7.9% in the third quarter of fiscal 2013.

Earnings Whispers?

Our proven model does not conclusively show that Costco is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. This is not the case here, as you will see below.

Negative Zacks ESP: ESP for Costco is -0.98%. This is because the Most Accurate estimate stands at $1.01, while the Zacks Consensus Estimate is pegged at $1.02.

Zacks Rank #3 (Hold): Costco's Zacks Rank #3 (Hold) lowers the predictive power of ESP. The Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Barnes & Noble, Inc. ( BKS ), Earnings ESP of +27.12% and a Zacks Rank #2 (Buy).

Marinemax Inc. ( HZO ), Earnings ESP of +7.14% and a Zacks Rank #2 (Buy).

Five Below, Inc. ( FIVE ) has an Earnings ESP of +1.82% and a Zacks Rank #3 (Hold).



BARNES & NOBLE (BKS): Free Stock Analysis Report

COSTCO WHOLE CP (COST): Free Stock Analysis Report

FIVE BELOW INC (FIVE): Free Stock Analysis Report

MARINEMAX INC (HZO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: BKS , COST , FIVE , HZO

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Author Roger Martin LIVE
Author Roger Martin LIVE            

Stocks

Referenced

Most Active by Volume

105,732,071
  • $5.405 ▼ 18.60%
73,711,082
  • $17.125 ▲ 2.12%
61,431,471
  • $42 ▼ 1.39%
24,538,179
  • $4.53 ▲ 16.75%
23,434,516
  • $102.0399 ▲ 0.45%
19,730,433
  • $5.5999 ▼ 26.51%
18,622,938
  • $46.7043 ▲ 0.40%
18,601,382
  • $53.71 ▲ 2.52%
As of 9/18/2014, 02:12 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com