Companies have two main accounting or financial reporting periods: the fiscal quarter and the fiscal year. The fiscal year for most companies runs from Jan. 1 to Dec. 31, with fiscal quarters that begin on Jan. 1, Mar. 1, July 1 and Oct. 1.
Some companies have fiscal years that follow different dates. Costco Wholesale Corporation's fiscal year begins in September and ends in the following August. For 2014, Costco's four quarters began on Sept. 2, 2013, Nov. 29, 2013, Feb. 17, 2014 and May 12, 2014.
The Securities and Exchange Commission (SEC) requires companies with publicly traded securities to file Form 10-K on an annual basis and Form 10-Q on a quarterly basis. Most companies issues annual and quarterly reports that coincide with this schedule. Costco and other retailers often issue monthly sales reports, quarterly earnings reports and full annual reports. Generally, 10-K and 10-Q filings offer more detail than monthly, quarterly or annual reports.
Like many businesses, Costco experiences seasonal fluctuations in its revenues, with its fourth quarter typically being the strongest. Because of this, analysts prefer to compare quarterly data with the same quarter of the previous year rather than the preceding quarter. It would be essentially meaningless to compare the first quarter of Costco's fiscal 2015 with either the previous or subsequent quarter.
Quarterly and annual data give analysts a more complete picture of the financial health of a company than either on their own. Examining Costco's recent full-year profit growth shows that it is basically flat, while fourth quarter profits have increased by almost 13%. This could possibly be signalling a new period of expansion for the company, which would not be evident from annual data alone.