Costco Earnings — A Surprise Stock Price Move in Store?

The warehouse club has one of the lowest price ranges of the quarter at just 3.5%

• Costco will report quarterly earnings on after the market closes on Thursday.
• The big-box warehouse club is expected to report earnings-per-share (EPS) of $4.24 on $63.10 billion in revenue.
• The chain missed EPS estimates last quarter and will look to bounce back with a higher estimate this time.
• While tariffs loom, Costco is in a decent position to absorb what comes next.

Costco is set to report quarterly earnings on Thursday after the market closes. While earnings are typically a high implied volatility event for most companies, Costco has one of the lowest implied stock price ranges we've seen this quarter. Coming in at just 3.5% of the notional value of the stock price, this earnings announcement sits well under the typical 5%-10% range we see for most companies. COST stock currently hovers around $1000 per share, which is up over 10% from the opening print of $915 in 2025.

Costco is expected to announce earnings-per-share (EPS) of $4.24 on $63.10 billion in revenue. Revenue estimates are almost exactly the same as last quarter, while EPS estimates are up 3% from last quarter.

We have some preliminary data to analyze ahead of the earnings call, which can always help with building an assumption.

Costco raised membership fees

“Gold Star" and business membership fees were raised Nov. 1, 2024, from $60 to $65 in the US and Canada, and executive membership fees will rise from $120 to $130. These fee increases will impact over 50 million members. This sustained increase in revenue certainly helps Costco wade through the uncertainty of tariff implications, as having more available cash can help offset sudden cost increases.

On April 16, Costco raised the quarterly dividend from $1.16 to $1.30, of $5.20 annualized. This is good news for the health of the company because distributing dividends means more cash is on hand from profitability. Remember, dividends are non-events from a transaction standpoint because the stock price drops the same amount as the dividend that's distributed. For dividend investing to work out long-term, the stock price needs to be higher than your purchase price over time.

Costco released April sales data on May 7, which showed a 7% increase year-over-year. Strong sales data is a testament to sustainable growth, and this’s what many long-term investors want to see. For me, all of this expected good news from Costco could be what is creating such a low implied volatility environment for the earnings call. Nothing too surprising and nothing too uncertain seems to be the theme for the earnings report.

Looking at the implied volatility of the options market, we can see a +/- $35.39 implied move for the week. The stock is hovering around $1,015 per share, so this is a very low implied move for a binary event like an earnings announcement. Still, looking to the August 2025 options cycle we can see a +/- $86.71 expected stock price range. This is still a very low implied range for the next 80 days, which tells us the market may be content with the stock price chopping around $1,000 for the foreseeable future.

Bullish on Costco for earnings

If you're bullish on COST stock for earnings, you want to see an EPS and revenue beat on Thursday with a strong forecast for the rest of the year. If Costco can offer softening remarks related to tariffs, that could be good for stock price movement to the upside. I still think we could see a stock split in the near-future for Costco, and historically that has been seen as a positive thing for long-term investing as the stock would be more affordable for smaller-scale investors.

Bearish on Costco for earnings

If you're bearish on Costco for earnings, you want to see more EPS and revenue turbulence, with tariff uncertainty making the headlines for the announcement. Costco feels like a safe haven for customers pinching pennies in uncertain times, but this could change if sweeping tariffs drive prices much higher.

Tune in to Options Trading Concepts Live at 11 a.m. CDT on Thursday for a deeper look at earnings strategies ahead of the Costco announcement.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb  

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