Costco Wholesale Corporation (COST) reports first-quarter earnings Thursday after the market closes, and the warehouse giant has more than just sales numbers to talk about. Tariffs are back in the conversation, thanks to a recent lawsuit that puts the company squarely in the middle of a trade policy debate.

Here's what Wall Street expects and what analysts are watching as Costco navigates an increasingly complicated retail landscape.

What The Numbers Should Look Like

Analysts are projecting first-quarter revenue of $67.17 billion, a healthy jump from $62.15 billion in the same period last year. Costco has a solid track record here, beating revenue estimates in three consecutive quarters and six of the last ten.

On the earnings front, the Street expects $4.28 per share, up from $3.82 a year ago. The company has topped EPS estimates in two straight quarters and eight of the last ten overall, which suggests management knows how to deliver.

The Tariff Problem Everyone's Talking About

Jay Woods of Freedom Capital Markets pointed out that while concerns about membership growth and margin pressure have been relatively modest, tariff worries are anything but.

"Costco has seemed to struggle with the new tariff landscape," Woods noted. The company recently joined other businesses in filing a complaint with the U.S. Court of International Trade over tariffs, arguing the president lacks authority to impose them. That's a bold legal stance that puts Costco's supply chain challenges front and center.

"Rising merchandise costs (especially on imported or inflation-sensitive good) and challenging consumer spending dynamics raise concern that margin pressure may persist if inflation or tariffs disrupt cost inputs. We should hear more on these issues on their call," Woods added.

Here's the kicker: despite generally solid execution, Costco shares are down year-to-date. Woods put it bluntly: "The stock has virtually gone nowhere this last year." The company has rallied after five of its last seven earnings reports, but investors are clearly waiting for more clarity.

Mixed Signals On Consumer Spending

JPMorgan analyst Christopher Horvers flagged softer-than-expected November U.S. core sales, which raises questions about holiday season consumer spending. He maintained an Overweight rating but trimmed his price target from $1,050 to $1,025.

Horvers cautioned against reading too much into monthly data, though. He remained positive on Costco's traffic trends and ticket growth, plus international locations outperformed during November.

Telsey analyst Joseph Feldman took a more optimistic view, saying Costco is executing well despite the uncertain environment. He kept an Outperform rating with a $1,100 price target, noting that the company will likely continue gaining retail market share and maintaining high membership renewal rates.

What To Watch For Thursday

The tariff lawsuit will dominate investor attention. Management commentary on how tariffs are impacting costs and what a potential Supreme Court ruling might mean for the business could move the stock more than the actual numbers.

Costco has tried to minimize tariff damage by ramping up production of its Kirkland Signature private-label items, which gives them more control over the supply chain. The company's fourth-quarter results showed strong revenue growth and comparable sales up at least 5% year-over-year across all regions. The membership fee increase from September 2024 also gave membership revenue a nice boost.

Traffic data from Placer.ai showed Costco foot traffic up 6.0% year-over-year in the third calendar quarter. Breaking it down by month, September traffic rose 5.1% year-over-year while October jumped 9.8%. Those are solid numbers that suggest consumers are still making the trip to the warehouse.

Where The Stock Stands

COST shares traded at $874.49 on Wednesday, within a 52-week range of $871.09 to $1,078.24. The stock is down 3.9% year-to-date in 2025, reflecting investor uncertainty about margins, tariffs, and consumer spending heading into next year.