Equities week ahead: Costco, Micron & JD Sports

Costco Q4 earnings

Costco will release Q4 earnings on Thursday, the 25th of September. The figures could shed more light on consumer behaviour as pricing pressures persist and amid growing signs of weakness in the jobs market.

US inflation remains elevated at 2.9% year on year in August, with food, gas, and shelter costs all higher. As a result, consumers may seek value, potentially benefiting wholesalers like Costco.

In Q3, Costco posted EPS of $4.28 ahead of forecasts, whilst comparable sales excluding gas grew 8%. However, revenue of $63.21 billion came in below expectations of $63.31 billion.

Costco has been working with suppliers to keep lower prices for staples such as eggs, butter, and olive oil. However, around a third of sales in the US are imported products, meaning the store is vulnerable to tariff price pressures.

The share price is up just 4% year to date, underperforming the broader S&P 500, which trades at a record high.

How to trade COST earnings?

The share price trades within a triangle pattern. The price faced rejection at the 200 SMA and has fallen below the 50 SMA to test the rising trendline support. Sellers would need to break below the trendline support at 943 to test 933, the late August low. A break below here confirms the breakout, opening the door to 922, the July low.

On the upside, buyers need to break out of 973, the 200 SMA, and the falling trendline resistance. A rise above here opens the door to 999, the August high.

Micron Technology Q4 earnings preview

Q4 earnings from the chipmaker come as the share price is up 100% year to date, trading at an all-time high. Investors will be watching to see how bullish the guidance is and whether high bandwidth memory prices are locked in through next year.

Expectations are for a 44% rise in quarterly revenue to $11,22 billion from $7.75 billion in the same period a year earlier. Meanwhile, EPS is expected to come in at $2.86. Wall Street is already expecting a beat, so the issue could be the magnitude of the beat

Micron's Q3 earnings beat forecasts on both the top and bottom line, with adjusted EPS of 1.91, up from 1.60, on adjusted revenue of 9.30 billion, which was ahead of forecasts of 8.85 billion.

Chip stocks have been rallying lately, with the PHLX Semiconductor Index up 10% in the month to date.

How to trade MU earnings?

Micron broke out above the 130 June and August high, rising to a peak level of 170, before easing back to current levels of 162. The RSI remains in overbought territory with a deeper pullback or consolidation possible. Immediate support is at 156, the 2024 high, and below here, 130 comes back into play.

Buyers will look to rise above 170 to extend the bullish run and create a higher high.

JD Sports first-half results

London-listed JD Sports will release H1 results on Wednesday, the 24th of September. The firm reported an improved performance in North America in Q2 and its August trading update, but like-for-like sales were still down 3% on the period.

The company warned over the second half of the year amid expectations for continued strains on consumer finances and unemployment risks, which could affect consumer confidence and the footwear product cycle.

Profit warnings from the likes of Lululemon have not helped ease worries about broader trends in consumer spending.

Expectations are for a 2% decline in like-for-like sales in fiscal 2026 and have guided for £885 million pre-tax profit, which should translate to around £350 million for the first half.

How to trade JD. results?

JD Sports' share price fell to a 5-year low of 60.50 in April before steadily rising from this point, forming a series of higher highs and higher lows, and reaching resistance at 100. From here the price has eased back, testing the rising trendline support and the 50 SMA.  Sellers supported by the RSI below 50 will look to break below 88 and the 200 SMA at 85.  Sellers could gain traction below here.

On the upside, should the rising trendline support hold, buyers could look to rise above 100 to create a higher high.