Can Costco Beat These Numbers?

Costco (Nasdaq: COST  ) is expected to report Q2 earnings on March 6. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Costco's revenues will expand 9.2% and EPS will expand 17.8%.

The average estimate for revenue is $25.07 billion. On the bottom line, the average EPS estimate is $1.06.

Revenue details
Last quarter, Costco tallied revenue of $23.72 billion. GAAP reported sales were 9.6% higher than the prior-year quarter's $21.63 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, EPS came in at $0.95. GAAP EPS of $0.95 for Q1 were 30% higher than the prior-year quarter's $0.73 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 12.6%, 10 basis points better than the prior-year quarter. Operating margin was 2.7%, 20 basis points better than the prior-year quarter. Net margin was 1.8%, 30 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $106.39 billion. The average EPS estimate is $4.50.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 4,502 members out of 4,661 rating the stock outperform, and 159 members rating it underperform. Among 1,349 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,326 give Costco a green thumbs-up, and 23 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Costco is outperform, with an average price target of $103.41.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Costco Wholesale. The Motley Fool owns shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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