The retail industry has gone through a lot of difficulties recently, and even stalwarts such as Costco Wholesale (NASDAQ:COST) have felt the impact. As a larger number of shoppers turn to e-commerce for convenience and breadth of available products, Costco and its big-box peers have had to respond by looking for ways to appeal to customers' most important demands. Competition is also ramping up, especially as online giant Amazon.com (NASDAQ:AMZN) has made a key foray into the brick-and-mortar world with its purchase of organic- and natural-foods specialist Whole Foods Market.

Costco is likely to release its fiscal fourth-quarter financial report within the next few weeks, and investors want to see signs that it's being strategically smart in its reaction to the Amazon deal while also remaining focused on its own core business prospects. With that in mind, it makes sense to take an early look at Costco and what we can anticipate down the road from the warehouse retailer.

Key stats on Costco

Expected EPS Growth

13.6%

Expected Revenue Growth

13.7%

Forward Earnings Multiple

24.8

Expected 5-Year Annualized Growth Rate

10.5%

Data source: Yahoo! Finance.

What's ahead for Costco earnings?

Investors have largely kept their optimism about Costco's earnings prospects in recent months. Even with the Amazon deal, investors have boosted their earnings projections for the current quarter by about 1%, and small moves up in predictions for the 2018 fiscal year also show long-term positive attitudes toward the company. The stock, though, has fallen dramatically, giving up 12% since mid-June.

Costco's fiscal third-quarter results generally had good things to say to investors. Revenue climbed 8%, outpacing the predictions of those following the stock, and net income gained by more than a quarter. A 5% rise in systemwide comparable sales represented a nice acceleration from past performance, and Costco showed that it had resolved a number of outstanding issues that had weighed on its results in the past. In particular, the strength of the Costco credit card defied the fears of those who had thought the transition wouldn't go well, and the retailer was set to implement a price increase for its membership fees.

Costco logo.

Image source: Costco Wholesale.

Since then, we've gotten readings on how the rest of the fiscal year has gone for Costco. The company reported late last month that August sales were up 10% from the year-ago period. With the first 52 weeks of this year's special 53-week fiscal year in the books, Costco has reported sales of $123.5 billion. That's up 6.4% from the end-of-year results in fiscal 2016, although the pace is slower than the consensus forecast for roughly $128 billion on the top line for the 2017 fiscal year.

Yet most of the attention Costco has gotten lately has been in connection with the big transaction between Amazon and Whole Foods. Already, Amazon has led Whole Foods to cut some of its prices on key staple items in a move that's trying to dispel the organic grocer's image as a premium-priced store that's suitable only for a well-to-do clientele. By using the power of its Amazon Prime membership, Amazon could borrow certain aspects of Costco's membership-driven business model and turn them to its own advantage. More optimistic analysts note, however, that Amazon's threat is larger against traditional grocery stores as well as more direct competitors in organic and natural foods. The overlap between Costco's and Whole Foods' natural customer bases isn't all that extensive, and it's almost certain that many customers have always shopped at both and will continue to do so regardless of changing ownership.

Costco investors will want to see how the early results from the membership-fee increase look, with the hope that it will have a negligible impact on retention and simply lead to a nice boost in overall sales. By remaining true to its own vision, Costco has a better chance than many retailers at standing up to the threat of e-commerce and remaining important to its loyal customers in the years to come.

John Mackey, CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.