(COST) FY2025Q3 Earning Prediction
(COST) is set to release its FY2025Q3 earnings performance on 05/29 04:00:00 in After Hours trading. Consensus forecasts predict a revenue of 63.00B and an earnings per share (EPS) of 4.25 for the FY2025Q3. With Intellectia's exclusive AI algorithms, users can predict whether the earnings will beat or miss expectations before the report drops. Leverage this powerful tool to strategize and position your trades ahead of the earnings release!
AI Earnings Prediction
Costco is expected to beat earnings expectations due to strong sales momentum, ecommerce growth, and effective cost management, despite some risks from tariffs and high valuation.
Scenario Analysis
Key Indicators Forecast
No data
Prediction Logic & Rational
Logic & Justification
Fact Data Analysis:
- Strong Sales Momentum:
April 2025 comparable sales grew ** 7.0% YoY** (May 7 news), building on March’s ** 8.6% YoY growth** (April 9 news). Year-to-date sales are up ** 8.3%**, exceeding historical trends and consensus expectations.
The Affirm partnership (May 14) introduces flexible payment options for online purchases ($500–$17,500), which could drive incremental eCommerce sales growth.
- Ecommerce Growth Acceleration:
- April’s ** 4.4% comp sales growth** included continued strength in online sales, building on the prior ** 20.9% YoY eCommerce growth**. The Affirm deal directly addresses higher-ticket online purchases, reinforcing momentum.
- Tariff Risks Mitigated:
- Analysts note Costco’s bargaining power and SKU flexibility (Bernstein, Loop Capital) to offset tariff impacts. While margins may face pressure, Costco’s pricing power (via Kirkland Signature, ~33% of revenue) and value-focused membership model should limit downside.
- Margin Resilience:
- Dividend increase by 12% (April 16) signals confidence in cash flow stability. SG&A efficiency (reported as improving in prior quarters) and partnerships (e.g., Lumicera for pharmacy services) suggest cost controls remain a priority.
Key Risks:
Valuation Concerns: Stock trades at ~53x P/E (Bernstein), implying high expectations. Any margin compression or deceleration in comp sales could trigger a negative reaction despite solid absolute results.
Tariff Pass-Through: Loop Capital warns of near-term margin risks if Costco delays passing tariff costs to consumers.
Tactical Strategy Recommendations
Trading Strategy
Bullish Play:
- Long Call Options: Buy ATM/OTM calls (e.g., $1,020 strike) expiring post-earnings to capitalize on a Beat scenario.
- Stock Replacement: Sell cash-secured puts (e.g., $980 strike) to collect premium if shares retreat on valuation concerns.
Hedge:
- Pair Trade: Short peers with higher tariff exposure (e.g., TGT, DLTR) against COST long, betting on relative resilience.
Rationale:
- Fact data supports a Beat, but the crowded long positioning (Mizuho) and high valuations justify hedging. The Affirm partnership and Kirkland’s dominance are underappreciated near-term catalysts.
Earnings Surprise Analysis
COST Transcript
The earnings call highlights strong market share growth, successful digital engagement, and promising international expansion, despite some challenges with renewal rates among younger members. The company's strategic focus on warehouse expansion and digital enhancements, along with optimistic guidance for membership growth, supports a positive outlook. However, management's avoidance of specific forward-looking guidance introduces some uncertainty, tempering the overall sentiment. Given these factors, the stock price is likely to experience a positive movement in the short term.
The earnings call summary and Q&A section reveal a generally positive sentiment. The company is expanding with new warehouses, showing strong membership growth, and enhancing digital initiatives. While management avoided some specifics, they conveyed confidence in mitigating tariffs and sustaining growth. The focus on value delivery and investment in technology and real estate supports a favorable outlook. Despite some uncertainties, the overall sentiment suggests a positive stock price movement, likely in the 2% to 8% range.
The earnings call summary highlights strong financial performance with increased sales, membership fee income, and gross margin. Despite higher SG&A rates due to wage investments, productivity improvements offset these costs. The Q&A section revealed management's focus on price competitiveness and strategic growth, although some responses lacked clarity. The partnership with Affirm and strong international sales add positive sentiment. Overall, the company's solid financial metrics, strategic initiatives, and optimistic outlook suggest a positive stock price movement in the near term.
The earnings call presents a mixed picture: strong financial performance with increased net income and EPS, alongside challenges like inflation and competitive pressures. The Q&A reveals management's focus on long-term growth and cost optimization, but lacks clarity on tariff impacts and price adjustments. No share repurchase program was announced, and economic uncertainty persists. Despite strong sales, the absence of clear guidance and lack of new partnership announcements suggest a neutral stock price movement over the next two weeks.
COST Slides
COST Report
Frequently Asked Questions
What is the FY2025Q3 Earnings Release Date and Time?
(COST) is scheduled to release its FY2025Q3 earnings report onMay 29, 2025, After Hours(approximately 4:00 PM ET). This timing allows investors to react during after-hours trading, with a conference call typically following shortly after.
What Are the Consensus Forecasts for FY2025Q3 Revenue and EPS?
Analysts' consensus predicts 63.00B in revenue and an EPS of 4.00 for 's FY2025Q3.
What Does Intellectia's AI Predict for FY2025Q3 Earnings?
Intellectia's exclusive AI algorithms forecast a Beat for's FY2025Q3 earnings, with a prediction date of May 29, 2025. Costco is expected to beat earnings expectations due to strong sales momentum, ecommerce growth, and effective cost management, despite some risks from tariffs and high valuation.
How Can I Use This Earnings Prediction to Trade COST Stock?
Leverage Intellectia's AI forecast to position trades ahead of theMay 29, 2025 release—consider calls for a beat scenario or protective puts for misses. Focus on pre-market volatility, and use the scenario probabilities to build strategies around revenue and guidance updates.
How Accurate Is Intellectia's AI for Earnings Predictions Like FY2025Q3?
Intellectia's predictions are backed by rigorous backtesting, showing a high hit rate for Beat and Miss calls compared to traditional analysis. While no forecast is 100% certain, we provide probability-based scenarios (e.g., 50% chance of a *Beat*) and detailed rationales to help you make informed decisions. Combine our insights with your strategy for the best results—it's like having a co-pilot for earnings season! Empowering users to strategize trades before reports drop.
How does AI Earnings Prediction generate its forecasts?
AI Earnings Prediction uses advanced Large Language Models (LLMs) to analyze a wealth of data, including past earnings transcripts, real-time market sentiment, analyst insights, and company news from the last three months. It focuses on key indicators like revenue, EPS, and margins to predict whether a company will *Beat*, *Miss*, or remain Neutral relative to market expectations. Think of it as a super-smart analyst crunching numbers and news 24/7 to give you a trading edge!
When are the predictions available, and how often are they updated?
Predictions are generated two days before a company’s earnings release (e.g., 5:00 PM ET on Feb 13 for a Feb 15 report) to capture the latest market and company data. They’re updated in real-time if significant news breaks, ensuring you get fresh insights.
Can I use AI Earnings Prediction for all types of stocks?
Currently, AI Earnings Prediction focuses on companies with market caps above $40 billion, covering major players like SPG, AAPL, MSFT, and NVDA for the 2025-2026 earnings seasons. We prioritize high-impact stocks with robust data to ensure reliable forecasts. Stay tuned as we expand coverage to more companies based on user demand!
