Costco is expected to post another quarter of growth amid an uncertain consumer environment

Costco (COST) is expected to report its fiscal first quarter results as inflation-weary shoppers turn to the wholesaler.

Adjusted earnings per share are expected to be $3.81, according to Bloomberg consensus estimates. Revenue is expected to be $62.14 billion. Same-store sales (excluding fuel) are expected to increase 6.26%, driven by international business, followed by the US and Canada.

The company is expected to see higher foot traffic in the quarter, up 6.87% year-over-year. However, Wall Street expects transaction growth to decline by 0.40%.

Costco shares have risen more than 50% since the beginning of the year, outpacing the S&P 500’s (^GSPC) 27% gain.

Here’s what Wall Street expects Costco to report for its fiscal first quarter ended December 4, 2024, compared to last year’s fiscal first quarter results:

Revenue: $62.14 billion compared to $57.8 billion last year

Adjusted earnings per share: $3.81 versus $3.58

Total company comparable sales growth, excluding fuel: 6.26% vs. 3.9%

• U.S. same-store sales growth: 6.14% vs. 2.6%

• Same-store sales growth in Canada: 5.68% vs. 8.2%

• Other international sales growth: 7.08% vs. 7.1%

E-commerce growth: 14.1% vs. 6.3%

Income from membership fees: $1.17 billion versus $1.08 billion

On September 1, Costco increased the price of its Gold Star membership by $5 to $65 and the price of its Executive membership by $10 to $130. Wall Street expects the increase to be reflected in this quarter’s results.

It was the first time the company increased its membership fees since 2017, and Costco said it delayed the increase until the team felt inflation was beginning to subside and consumer purchasing power was returning.

As of the previous quarter, the change is expected to affect approximately 52 million memberships, of which just over half are executive memberships. The fee increase is expected to increase membership revenue from high single digits to low double digits.

Membership revenue is expected to be $1.17 billion, higher than the $1.08 billion reported last year.

The company also doubled down on scanning membership cards at the door, which CEO Ron Vachris said allowed operators to gauge real-time foot traffic and prompt customers to renew their memberships.

“Membership growth remains healthy as consumers seek value and existing members continue to advance to the executive membership level,” Joseph Feldman of Telsey Advisory Group wrote in a note to clients.

Costco operates 891 warehouses worldwide as of last quarter. Wall Street expects this to rise to 895.

Another excellent quarter is also expected for the e-commerce business with an increase of 14.1%. Sales in the previous quarter were driven by growth in home appliances, tires, toys, gift cards, as well as food, health and beauty aids, and other items such as gold bars.

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