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

Costco (COST) is expected to report its first-quarter fiscal results as inflation-weary consumers turn to wholesalers.

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

The company is expected to see more traffic this quarter, up 6.87% from a year ago. But Wall Street expects transaction growth to decline by 0.40%.

Year to date, Costco shares are up more than 50%, better than the 27% gain for the S&P 500 (^GSPC).

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:

Gain: $62.14 billion versus $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%

• US sales growth: 6.14% vs. 2.6%

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

• Other international sales growth: 7.08% versus 7.1%

E-commerce growth: 14.1% vs. 6.3%

Membership fee proceeds: $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 had increased its membership fees since 2017, and Costco said it was delaying the increase until the team felt inflation was starting to go away and consumer purchasing power was returning.

From the previous quarter, the change is expected to affect approximately 52 million memberships, just over half of which will be Executive memberships. The contribution increase is expected to grow membership revenues in the high single digits to low double digits.

Membership fee revenue is expected to reach $1.17 billion, up from 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 know real-time foot traffic and encourage customers to renew their memberships.

“Membership growth remains healthy as consumers look for value and existing members continue to move up 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 grow to 895.

E-commerce activities are also expected to have another excellent quarter, up 14.1%. Sales in the previous quarter were driven by growth in appliances, tires, toys, gift cards and food, health and beauty aids, among other items such as gold bars.

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