Another quarter of growth is expected as buyers continue to appreciate value

Costco ( COST ) is forecast for another quarter of wholesale sales as consumers look for wallet-friendly prices on everyday items.

According to Placer.ai, the wholesale retailer has seen year-over-year increases in foot traffic, beating out the likes of Sam’s Club (WMT) and BJ’s Wholesale Club (BJ). On Thursday afternoon, the company is expected to report net sales of $57.98 billion, up 8.07% year-over-year, and adjusted earnings of $3.70, up 8%.

Same-store sales are expected to increase 5.93% year-over-year, driven by growing international business (up 7.46%). Same-store sales are expected to increase 6.96% in Canada and 5.51% in the US.

E-commerce is also expected to be a bright spot, with growth estimated at 11.5% year-on-year.

In the previous quarterly report, digital sales grew more than 18% year-over-year, driven by demand for gold bars, silver and home appliances, Costco CFO Richard Galanti said on an earnings call.

Membership dues, a key source of revenue, are expected to be $1.53 billion, up from $1.51 billion a year earlier.

Costco Gold Star Membership is $60 per year and Executive Membership is $120. Some on the street predicted last year that Costco would raise its fees this summer.

Costco shares are up 22% year to date, outperforming the S&P 500 Index (^GSPC) by about 11%.

“We continue to believe a premium valuation is justified given Costco’s excellent global unit growth prospects, leading competitive position and track record of increasing share earnings,” Oppenheimer analyst Rupesh Parikh wrote in a note to clients, adding that “management can unlock even greater shareholder value over time by creating alternative revenue streams.”

JPMorgan analyst Christopher Horvers wrote that the company’s stock continues to attract interest from upper-income audiences as well as a long history of steady market share growth.

Wall Street is anxious to see how non-food categories such as the jewelry division (including gold bars) as well as traditional fresh foods power, led by meat and produce, fare.

This happens when consumers look for value in food items. According to the U.S. Bureau of Labor Statistics, grocery prices rose 1.1% in April from a year ago but fell 0.2% from March.

Horvers also expects gas to grow by +70 basis points year-over-year due to inflation and an average selling price 5% higher than in April 2023.

Earnings summary:

Here’s what Wall Street expects from Costco in terms of fiscal third-quarter earnings compared to a year ago:

Net sales: $57.98 billion compared to $53.65 billion

The story continues

Adjusted EPS: $3.70 vs. $3.43

Same store sales growth: 5.93% compared to 3.5%

• U.S. same-store sales growth: 5.51% vs. 1.8%

• Canadian same-store sales growth: 6.96% vs. 7.4%

• Other international: 7.46% vs. 8.4%

Development of e-commerce: 11.5% compared to a decrease of 9%.

Membership fees: $1.53 billion compared to $1.51 billion

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @Brooke DiPalma or email her at [email protected].

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