Should You Buy Costco Stock Before Sept. 24? History Has a Clear Answer.

Costco is scheduled to report Q3 results after the Sept. 24 close, with analysts expecting roughly $94.9B in revenue and EPS of $6.53-$6.55. The article highlights that Costco shares declined following six of its eight earnings reports since September 2024, with no clear post-earnings advance since June 2024. While maintaining a positive long-term view, the author advises investors to wait for the earnings release rather than buy ahead of it, given the recent pattern of post-report weakness.

Analysis

The relevant setup is valuation asymmetry, not the reported short-term price pattern. COST typically needs a beat-and-raise across comparable sales, renewal/membership economics, and merchandise margin to sustain a premium multiple; merely meeting estimates leaves room for profit-taking by momentum and benchmark holders. A weak discretionary general-merchandise mix would matter more than a modest headline comp miss because it challenges operating leverage and the market's willingness to capitalize membership-fee income at a growth-stock multiple.

For the next 1-3 months, COST is also a consumer-quality read-through rather than a clean sector short. Evidence of resilient traffic but softer big-ticket baskets would favor WMT over COST: Walmart's broader grocery mix and lower-income trade-down exposure should be more defensive, while COST is more exposed to expectations embedded in its premium valuation. Conversely, a stronger renewal rate, accelerating digital penetration, or margin expansion from private label would undermine the relative-value case even if the initial share reaction is negative.

The contrarian point is that six observations do not establish an earnings anomaly; post-result declines can reflect an elevated pre-event multiple and options positioning rather than deteriorating fundamentals. Do not short solely on the historical pattern. The bearish tactical thesis is falsified by a comp/traffic result that beats expectations while gross margin and membership income support forward guidance; in that outcome, dealer hedging and short covering could extend upside beyond the initial move.

Key Decisions for Investors

• Do not add directional COST exposure before the event based only on the apparent post-earnings pattern; require the implied move versus the prior four-quarter average move before considering a volatility trade.
• For a 1-3 month relative-value expression, consider long WMT / short COST in equal beta-adjusted dollars only if COST rallies into results and its forward valuation premium to WMT remains elevated. Target 5-8% relative performance; stop if COST delivers broad-based comp, renewal, and margin upside that prompts forward estimate revisions higher.
• For existing long COST holders seeking event protection, price a 30-45 day put spread rather than selling core exposure outright. The hedge is attractive only if the premium is below the expected downside from a one-turn forward-multiple compression; otherwise wait for post-event liquidity.
• Set an earnings-monitor alert around U.S. comparable-sales composition, membership/renewal trends, gross margin, and forward commentary. A traffic-led beat with improving non-food mix supports adding COST on any mechanical selloff; a basket-size and margin miss supports maintaining the WMT/COST relative short through the following monthly sales and retail-data cycle.