Key Takeaways
- Costco Wholesale is set to report fiscal 2024 fourth-quarter earnings after the bell Thursday, the warehouse retailer’s first report since raising its membership fees .
- Analysts project higher year-over-year revenue and profit, with memberships expected to rise to 75 million.
- Morgan Stanley analysts recently lifted their price target for for Costco shares to $950 from $855, calling it “among the best compounding growth stories in retail.”
Costco Wholesale (COST) reports fiscal 2024 fourth-quarter earnings after the closing bell Thursday, the warehouse retailer’s first report since raising its membership price for the first time in seven years.
Costco is projected to report $2.26 billion in net income on just shy of $80 billion in revenue, up from $2.2 billion and $78.9 billion, respectively, a year earlier, according to consensus estimates of analysts compiled by Visible Alpha.
| Analysts’ Estimates for Q4 2024 | Q3 2024 | Q4 2023 | |
| Revenue | $80 billion | $58.52 billion | $78.94 billion |
| Diluted EPS | $5.10 | $3.78 | $4.86 |
| Net Income | $2.26 billion | $1.68 billion | $2.16 billion |
Key Metric: Digital Sales Growth
Costco’s leadership has signaled plans to catch up to rivals who have a larger share of digital sales, as the retailer has lagged in online shopping, Morgan Stanley analysts wrote earlier this month.
In last quarter’s earnings call, Costco leadership said e-commerce sales grew more than 20% year-over-year as the company has sought to improve its website and app shopping experiences. Costco has worked to make its app faster, and added features like searching the inventory of a nearby warehouse to see if it has a particular item in stock.
Morgan Stanley analysts recently raised their price target for Costco shares to $950 from $855, calling it “among the best compounding growth stories in retail,” and said they believe Costco’s next decade could see digital growth and comparable store sales grow at a higher rate than it averaged before the pandemic.
Business Spotlight: New Membership Fees
Costco announced in July that it would raise its membership fees for the first time in seven years, effective Sept. 1. The changes won’t have an impact on fourth-quarter earnings, but executives may get asked on the earnings call about if they’ve seen any changes in signups or renewals since the new prices were implemented.
The retailer is projected to reach 75 million members in the quarter, up from 71 million a year ago and 74.5 million members in Q3.
Costco shares finished Friday just below $907 a share, below its record high above $923 set last month. The shares are up nearly 40% this year.