Way back in January and early February, Costco Wholesale was a seriously hot stock.
The warehouse retailer’s shares jumped nearly 18% in the early weeks of 2025, peaking at $1,078.23 on Feb. 13.
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The shares have fallen 11.8% since then. They’re down 3.9% this quarter, but they’re still up 3.8% on the year.
For some companies, the decline would be a disaster. But Costco (COST) still has credibility with investors and analysts.
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That credibility will be tested after Thursday’s close when the company reports fiscal 4th-quarter results.
Costco, Micron Technology (MU) and consulting giant Accenture (ACN) are the week’s big reports and are big enough that earnings surprises can move markets.
And all this as market bullishness is growing since the Federal Reserve cut its federal funds rate on Wednesday.
That said, it’s a light week for earnings, with only 47 companies reporting. The number will start to explode after JP Morgan Chase (JPM) reports third-quarter earnings on Oct. 14.
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Futures trading suggests a modest-to-down-slightly stock-market open on Monday. But this year, a down futures market has rarely been sustained. Moreover, the declines are so modest that bulls will try quickly to push stocks higher.
Costco’s dilemma
The company is still growing, opening some 25 stores a year. Its earnings are solid and predictable, and the projections for its fourth-quarter results, due after Thursday’s market close, are decent:
- Revenue of $86.1 billion, up 8% year-on-year.
- Earnings of $5.80, up 12.6%.
Of 36 analysts who cover the stock, only one rates the stock as an underperform. Eighteen rate it a buy or strong buy. The rest are holds.
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So, is there a problem? Maybe. While Costco shares have been sluggish since that February peak, arch-rival Walmart WMT shares are up 13.3% for the year and 4.6% for the quarter.
But retailing is tough right now. Retailers of all sizes are dealing with stressed customers who are shopping more carefully than ever. And just about all retailers have had to put up with tariffs that can affect costs.
Walmart has been aggressive, investing millions in its online shopping business, while Costco is only getting started.
One reason for the delay is strategic.
Costco’s membership fees guarantee a base on profitability and allow Costco an opportunity to drive down costs and prices.
Another reason is experiential.
You don’t go to Costco and go home with just a gallon of milk. You go in for, say, milk and laundry detergent but maybe come home with dog food, tortilla chips, a package of chicken thighs, oranges, wine and Halloween costumes for the grandkids.
Micron’s big year may be too big
If Micron has a problem, it’s the stock price. It’s up 92% year to date. It’s up 150% from the tariff low in April.
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Micron updated its guidance on Aug. 11, projecting fourth-quarter revenue at $11.1 billion to $11.3 billion (up from $10.75 billion to $11 billion). It also guided earnings to $2.85 a share from $2.51. The analyst consensus is now $2.79.
Thanks to the updates, the stock soared nearly 38% from Aug. 11 to $168.89 on Thursday, and its relative strength index jumped to 86.1, setting off big warning bells that the shares might be seriously overbought.
So, the shares fell 6.2% Friday to $162.73. The RSI fell to 76.10, suggesting the shares are still over-bought.
If the earnings come up short, watch out.
Micron’s business is built around DRAM chips used in desktop computers and servers and flash memory used in smart phones. And lately, it has become an important player in high-bandwidth memory, used in artificial intelligence servers.
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Accenture looking for new business
Before Donald Trump began his second term, Accenture generated about 8% of its revenue from contracts with the U.S. government.
Many of those contracts have been terminated or reduced, and the shares are down 39% this year.
Nonetheless, analysts are seeing revenue of $17.4 billion in its fiscal fourth quarter, up 5.7% from a year ago, and earnings of $2.97, up 6.5%.
What investors will want to know when it reports before Thursday’s open is how the consulting is replacing all that revenue. An upside surprise will push the shares higher
Also reporting this week
- Fly Aerospace FLY issues its first earnings report Monday since going public at $45 on Aug. 7. Firefly shares closed at $45 on Friday. The company is developing rockets for small satellite launches on short notice. The company creates lunar landers, rockets and space technology and won a $177 million contract with NASA.
- Auto parts retailer AutoZone (AZO) , before Wednesday’s open. Revenue est.: $6.24 billion, up 0.6% from last year. Earnings estimate: $51.01 a share, down 1.15%.
- Uniforms and business supply merchant Cintas (CTAS) , before Wednesday’s open. Revenue est.: $2.7 billion, up 7.7%. Earnings est.: up $1.19, up 8.2%.
- Homebuilder KB Home (KBH) , after Wednesday’s close. Revenue est.: $1.6 billion, down 9%. Earnings est.: $1.50, down 26.5%.
- Electronics maker Jabil (JBL) , before Thursday’s open. Revenue est.: $7.6 billion, up 9.6%. Earnings est.: $2.89, up 25.7%.
- Used-vehicle retailer CarMax (KMX) , before Thursday’s open. Revenue est.: $7.1 billion. Earnings est.: $1.04, up 22.4%.
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