Costco and AutoZone are part of Zacks Earnings Preview

For Immediate ReleaseChicago, IL – June 2, 2025 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Costco COST and AutoZone AZO.Making Sense of Q2 Earnings ExpectationsWe count the Costco and AutoZone releases for their respective fiscal quarters ending in May as part of our June-quarter tally.As such, the AutoZone and Costco quarterly reports have kicked off the Q2 earnings season for us, even though we still have a few Q1 earnings releases to await. In fact, by the time the big banks put the spotlight on the Q2 reporting cycle by releasing their June-quarter results on July 14th, we will have seen such May-quarter results from more than two dozen S&P 500 members.Costco handily beat consensus estimates for earnings, revenues, and same-store sales (comps). Same-store sales for the quarter were up +8%, excluding gasoline and the impact of foreign exchange fluctuations. This follows +9.1% comp growth in the preceding period relative to estimates of +6.3%.Of particular significance is the high single-digit comp growth in Costco’s non-food merchandise, which can be compared to the discretionary or general merchandise categories at other retailers, such as Walmart and Target. A significant part of Costco’s discretionary strength likely reflects the retailer’s high-income customer base, but it is also likely gaining market share in these product categories.Costco continues to execute well despite the tariff challenges. Management reiterated on the call that merchandise at the domestic business is mostly sourced from within the U.S., with only about a quarter of Costco U.S. sales dependent on imports.Looking beyond Costco and AutoZone, the expectation is for Q2 earnings for the S&P 500 index to increase by +5.4% from the same period last year on +3.7% higher revenues. This will be a material deceleration from the +12% earnings growth in Q1 on +4.7% revenue growth.We have been regularly flagging in recent weeks that 2025 Q2 earnings estimates have been steadily decreasing.The magnitude of cuts to 2025 Q2 estimates since the start of the period is bigger and more widespread relative to what we have become used to seeing in the post-COVID period.Since the start of April, Q2 estimates have declined for 15 of the 16 Zacks sectors (Aerospace is the only sector whose estimates have increased), with the largest cuts to the Transportation, Autos, Energy, Basic Materials, and Construction sectors.Estimates for the Tech and Finance sectors, the largest contributors to the S&P 500 index, which account for more than 50% of all index earnings, have also been cut since the quarter began. But as we have been pointing out in recent weeks, the revisions trend for the Tech sector has notably stabilized.A likely explanation for this stabilization in the revisions trend is the easing in the tariff uncertainty after the more punitive version of the tariff regime was delayed. Analysts started revising their estimates lower in the immediate aftermath of the early April tariff announcements, but appear to have since concluded that those punitive tariff levels are unlikely to get levied, helping stabilize the revisions trend.The Q1 Earnings ScorecardAs we noted earlier, the Q1 earnings season isn’t over yet. Through Friday, May 30th, we have seen Q1 results from 490 S&P 500 members or 98% of the index’s total membership.Total earnings for these 490 index members that have reported results are up +11.9% from the same period last year on +4.8% revenue gains, with 74.1% of the companies beating EPS estimates and 63.3% beating revenue estimates.The EPS and revenue beats percentages are tracking below historical averages, with the Q1 EPS beats percentage of 74.1% compared to the average for the same group of 78.4% over the preceding 20-quarter period (5 years). The Q1 revenue beat percentage of 63.3% compared to the 5-year average for this group of index members of 71.2%.For a detailed view of the evolving earnings picture, please check out our weekly Earnings Trends report here >> Analyzing the Current Earnings OutlookWhy Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Join us on Facebook:  https://www.facebook.com/ZacksInvestmentResearch/Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. 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These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Costco Wholesale Corporation (COST): Free Stock Analysis Report AutoZone, Inc. (AZO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks