Costco Wholesale Corp
The company is scheduled to report its March sales on Wednesday, April 9.
The company could announce a deceleration in total comps for the month to 2.5%, from 7.7% last year, according to Telsey Advisory Group.
The Costco Wholesale Analyst: Analyst Joseph Feldman reiterated an Outperform rating and price target of $1,000.
The Costco Wholesale Thesis: Gas prices declined by high single digits in March, which is likely to result in a comp headwind of around 80 basis points (bps), Feldman said in a note.
Strength in the U.S. dollar could translate to an additional headwind of around 170 bps, he added.
"We expect traffic to be up 2.5% vs. 7.2% last year, as consumers visit more frequently in search of value," the analyst wrote.
Costco Wholesale's digital sales growth is expected to have decelerated to 5%, from 28.3% last year, he stated.
Non-Food sales could outperform, with consumers shopping for certain discretionary categories such as gift cards, while Food & Sundries and Fresh Foods sales are expected to "remain solid, given favorable at-home consumption and the value-focused assortment," Feldman further said.
COST Price Action: Shares of Costco Wholesale had declined by 2.73% to $942.91 at publication on Friday.