Key Takeaways:
- Costco reports Q3 FY2026 earnings Thursday after the close.
- Options pricing implies a roughly 3% swing in the stock by week's end.
- Analysts project revenue of $69.47 billion, up 10% year over year.
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Costco set to report earnings as traders eye 3% swing in shares
Costco Wholesale is expected to report fiscal third-quarter revenue of $69.47 billion when it releases earnings after the closing bell Thursday, with options pricing signaling a potential 3% swing in the stock by the end of the week.
"The consumer is seeking value, and Costco's membership model and pricing discipline position it to deliver robust results," UBS analysts said in a note, reiterating a buy rating and lifting their price target to a Street-high $1,275.
Analysts project earnings of $4.92 per share, up from $4.28 a year earlier, according to estimates compiled by Visible Alpha. Comparable store sales are expected to have grown about 7.9% overall, or 6.5% excluding gasoline and currency impacts. Total paid members are seen reaching 83.63 million, a 5% increase, with membership fee income rising 9.9%.
The report comes as retailers signal growing strain on US consumers. Walmart, which owns Sam's Club, posted mixed results this month and said many shoppers are feeling financially squeezed. Costco's results will offer a key read on whether the warehouse retailer's value proposition continues to insulate it from the broader pullback in discretionary spending.
Of the 15 analysts tracked by Visible Alpha, nine rate Costco a buy, four are neutral and one recommends selling. The average price target of about $1,060 implies roughly 6% upside from Tuesday's close. Shares have gained more than 16% this year, though they have pulled back from a record high set earlier this month.
Costco has also faced legal headwinds. A federal jury in California this month awarded $200,000 in damages in a disability discrimination lawsuit brought by a former employee, with attorneys' fees expected to substantially increase the company's financial exposure.
The earnings report will test whether Costco's membership growth and pricing strategy can sustain momentum as consumers face elevated inflation and higher fuel prices. Investors will watch Thursday's call for updates on renewal rates, executive member upgrades and the company's outlook for the remainder of the fiscal year.
This article is for informational purposes only and does not constitute investment advice.
