We came across a bullish thesis on BJ’s Wholesale Club Holdings, Inc. on Canadian Cashflow’s Substack. In this article, we will summarize the bulls’ thesis on BJ. BJ’s Wholesale Club Holdings, Inc.'s share was trading at $99.52 as of February 11th. BJ’s trailing and forward P/E were 22.93 and 21.28 respectively according to Yahoo Finance. Biggest Industries in America BJ’s Wholesale Club (BJ) operates a proven warehouse retail model in the U.S., positioned between traditional grocery stores and large-sca ...

Group 1 - Costco Wholesale Corp shares have increased as investors consider its position in a K-shaped economy, leveraging value pricing and loyal membership to attract diverse income groups [1] - BofA Securities analyst Christopher Nardone reinstated coverage with a price target of $1,185, indicating Costco's strong positioning in the current economic climate [2] - Nardone emphasized that Costco's strategy of reinvesting in price and wages supports long-term share gains, reflecting confidence in steady comparable sales and durable margins [3] Group 2 - Costco is recognized as a pricing leader, consistently attracting significant traffic, and typically lowers prices when food inflation decreases, which enhances store visits [3] - The focused assortment of products supports quality, innovation, and pricing discipline, with the Kirkland brand accounting for about one-third of sales, enhancing supplier leverage and protecting merchandise margins [4] - The growth in executive membership tiers indicates customers are opting for added benefits, with executive members representing approximately half of total members and contributing most of the revenue [4] Group 3 - A modest renewal slowdown has been acknowledged, but shifting demographics are seen as a positive factor, with younger, digitally engaged members expanding Costco's long-term opportunities [5] - Key medium-term risks identified include e-commerce execution and investments in AI [5] - As of the publication date, Costco shares were trading higher by 1.37% at $1,001.26 [5]

Core Viewpoint - Costco experienced a challenging year in 2025, with its stock declining by 6%, contrasting with a 16% gain in the S&P 500, indicating a rare and significant underperformance for the warehouse retailer [1] Company Performance - The decline in Costco's stock is notable as it marks a significant deviation from the overall market performance, highlighting potential concerns regarding the company's competitive positioning and operational challenges in the current economic environment [1] Market Context - The S&P 500's 16% gain during the same period underscores a broader market strength, suggesting that Costco's struggles may be more pronounced in comparison to its peers and the overall retail sector [1]

Core Viewpoint - Costco is facing a class-action lawsuit for allegedly misleading advertising regarding its Kirkland Signature Seasoned Rotisserie Chicken, claiming it contains no preservatives while it actually includes two added preservatives: sodium phosphate and carrageenan [1][2]. Group 1: Lawsuit Details - The lawsuit was filed in the U.S. District Court for the Southern District of California, asserting that Costco's advertising creates a false impression that the Rotisserie Chicken is preservative-free [2]. - Plaintiffs argue that customers make purchasing decisions based on the "preservative free" label and were unable to ascertain the presence of added preservatives before purchase [3]. - The lawsuit claims that ingredient disclosures, if present, were inadequately displayed in small print and did not clarify the preservative function of the ingredients [5]. Group 2: Consumer Trust and Company Accountability - The lawsuit emphasizes that consumers rely on clear claims like "No Preservatives" when making food choices for themselves and their families [7]. - Legal representation for the plaintiffs stated that Costco's ingredient list contradicts its marketing claims, seeking to hold the company accountable for misleading its customers [8]. Group 3: Market Impact - Following the news of the lawsuit, Costco's stock traded around $977, reflecting a decrease of approximately 0.5%, although shares have increased over 13% year-to-date [11].

Core Insights - Costco Wholesale Corporation is expanding its global presence by increasing the number of warehouses and driving membership growth to meet rising demand for value-driven retail [1] Expansion Strategy - The company opened eight new locations in the first quarter of fiscal 2026, including a third warehouse in France, four new U.S. locations, and two additional Canadian business centers [2] - Management plans to open 28 net new warehouses during fiscal 2026 and aims for 30 or more annual openings in subsequent years [2] Real Estate and Site Acquisition - To support expansion, Costco has expanded its real estate team and adopted creative site acquisition methods, including refurbishing existing structures [3] - The strategy includes relocating high-volume warehouses to larger sites with expanded parking and fuel stations, with five relocations planned for fiscal 2026 [4] Sales Performance - New warehouses are reaching maturity faster, with fiscal 2025 openings generating an annualized $192 million in sales per location during the first year, up from $150 million two years prior [5] Competitive Positioning - Costco's shares have increased by 1.6% over the past year, compared to the industry's growth of 11.9%, while Dollar General shares have rallied by 106.7% and Target's shares have dropped by 19% [6] Financial Metrics - Costco's forward 12-month price-to-earnings ratio is 46.30, higher than the industry average of 31.93, indicating a premium valuation compared to Target and Dollar General [9] - The Zacks Consensus Estimate for Costco's current financial-year sales implies a year-over-year growth of 7.6%, with earnings per share expected to grow by 11.7% [10] Sales and Earnings Estimates - Current quarter sales estimate is $68.90 billion, with a year-over-year growth estimate of 8.12% [11] - Current year earnings per share estimate is $20.09, reflecting an 11.67% year-over-year growth [12]

Core Insights - Costco has generated a total return of 16,810% over the past 30 years, indicating its strong performance as a retail stock [1] - The company currently has a market capitalization of $411 billion and reported net sales of $270 billion for fiscal 2025 [2] Company Strengths - Costco's warehouse stores benefit from durable demand, offering quality merchandise at low prices, which appeals to consumers in various economic conditions [3] - The company charges annual membership fees, resulting in a high membership renewal rate of 92.2% in Q1 2026, with total paid memberships increasing by 5.2% year over year to 81.4 million [4] - Costco's scale provides it with significant bargaining power with suppliers, leading to lower merchandise costs and benefiting consumers [5] Future Outlook - Management plans to achieve a yearly run rate of 30 net new store openings, indicating ongoing expansion potential despite the company's size [4] - The company is expected to remain relevant and thriving over the next 30 years due to its competitive position and scale advantages [5] Investment Considerations - Despite being 14% below its peak, Costco's stock is not considered a bargain, trading at a price-to-earnings ratio of 49.5, which is viewed as too high [6] - Investors are advised to wait for a price pullback before considering an investment in Costco, as the current valuation may limit potential market-beating returns over the next five to ten years [6] - The company's mature status and high starting valuation may discourage some investors [7]

Core Insights - Costco's sales are experiencing significant growth, with net sales increasing by 8.5% year over year to $29.86 billion for the five weeks ending January 4 [2] - The company's stock price rose over 3% following the release of its December sales figures, reflecting positive market sentiment [1] Sales Performance - Comparable sales in the U.S. grew by 6.3%, while companywide comparable sales increased by 6.2%, excluding the effects of gasoline price fluctuations and foreign exchange rates [2] - Digitally enabled sales surged by 18.3%, indicating strong performance in Costco's online retail segment [4] Market Position - Costco's strategy of offering quality merchandise at low prices is resonating well with consumers, particularly in a cash-strapped environment [4] - The company's large scale allows it to provide a curated selection of goods at competitive prices, making it difficult for rivals to match [4] Customer Loyalty and Growth Strategy - The savings provided by Costco help build loyalty among its members, driving repeat traffic and stable profits [5] - Expansion of store count, along with growing sales at existing locations, is expected to continue fueling Costco's earnings growth in the future [5]

Core Insights - Costco is the third-largest retailer globally by revenue, with nearly one-third of U.S. consumers shopping there [1][2] Membership Structure - Costco offers two membership tiers: the Gold Star Membership at $65 plus taxes per year and the Executive Membership at $130 plus taxes per year, which includes additional benefits such as 2% cashback and service discounts [1] Cost Savings - Shopping at Costco can lead to significant savings on groceries, with examples showing chicken thighs are 44.3% cheaper, Kellogg's Frosted Flakes are 39.3% cheaper, and pork chops are 25.7% cheaper compared to competitors [2] - A comparison indicated that consumers could save over $1,000 annually by shopping at Costco for groceries alone, excluding other categories like gas and electronics [2] Product Recommendations - Costco offers under-the-radar items that can provide additional savings, such as generic allergy medication, protein powder, and larger purchases like appliances [3] - The in-house brand allergy medication, Kirkland Aller-tec, can save consumers up to 90% compared to name-brand alternatives, providing a one-year supply [4]

Core Insights - Costco has started selling 1-ounce gold bars, with prices for the PAMP Suisse and Rand Refinery bars at $1,979.99 and $1,949.99 respectively in late 2023, indicating strong initial demand [2] - By December 2025, the price of the PAMP Suisse bar surged to $4,119.99, reflecting a 108% increase, while the broader gold market rose approximately 65% during the same period [3] - The demand for gold remains robust, with Costco implementing purchase restrictions of one transaction per membership and a maximum of four units per 24 hours [4] Industry Trends - Gold is increasingly viewed as a means to preserve purchasing power and a safe haven during economic and geopolitical uncertainties, leading to heightened investor interest [5] - Current market conditions, characterized by tariff uncertainties and rising deficits, have contributed to gold's status as a strong investment option [6] - Experts, including Ray Dalio, emphasize the importance of gold in investment portfolios, especially during turbulent times, with gold prices peaking at $4,371.78 per ounce in October [7]

Core Viewpoint - Costco has experienced a disappointing year in 2025, with its stock price down 6% despite strong operational performance [1] Group 1: Same-Store Sales Performance - Costco's same-store sales (SSS) have shown impressive growth, indicating strong productivity at existing locations [4] - In fiscal 2020, during the COVID-19 pandemic, Costco reported positive SSS of 7.7%, followed by 16% in fiscal 2021 and 14.4% in fiscal 2022, with the positive trend continuing [5] - The company is expected to maintain its SSS growth in 2026, driven by increased foot traffic and higher average ticket sizes [6] Group 2: Growth Strategy - Costco currently operates 921 warehouses, with approximately two-thirds located in the U.S., and plans to open 28 net new warehouses in fiscal 2026 [6] - There are significant opportunities for expansion in the U.S. and international markets, particularly in China, which is promising for revenue growth in 2026 and beyond [7] Group 3: Valuation Considerations - Despite a strong operational performance in 2025, with net sales and net income increasing by 8% and 10% year over year, the stock has faced valuation concerns [8] - The current price-to-earnings ratio stands at 46, down from 63 earlier in 2025, indicating a potentially better valuation setup for investors [9]