What To Expect From Costco’s Q2 Earnings

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Costco (NASDAQ:COST) is scheduled to announce its fiscal second quarter results on Thursday, March 2. The company reported relatively disappointing fiscal first quarter results, as both its revenues and earnings missed consensus estimates. In Q1, the retailer’s overall revenue growth was driven by incremental revenues from new stores and growth in membership fees. The company’s net earnings grew 14% y-o-y to $1.24 per share, as it benefited from a non-recurring $51 million legal settlement in the first quarter. However, it should be noted that the strengthening dollar had a significant negative impact on the company’s growth in the first quarter, and we expect this negative impact to continue in the second quarter as well.

In a recent press release, Costco reported that its comparable store sales during January increased by 7%, including the negative impact of gasoline prices and currency effects, largely driven by strong U.S. comparable sales growth of 6%. This is the strongest headline comparable growth since August 2014 and the strongest core comparable growth since December 2015. Positive comparable growth in food helped the company post solid gains in the month of January. Excluding the gasoline and currency fluctuations, the combined comparable sales increased by 5% driven by 5% growth in the U.S., a 1% rise in Canada and 8% growth in other international sales.

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Q2 Earnings Expectations

Costco did not publish any guidance for the upcoming earnings, but per consensus estimates the company is expected to report second quarter revenues of $29.8 billion and earnings of $1.36 per share.

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Have more questions about Costco? Please refer to our complete analysis for Costco

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