Core Insights - The previous investment stance on BJ's Wholesale Club Holdings (NYSE: BJ) was a hold rating due to high valuation concerns [1] - Recent developments have prompted a reevaluation of the investment approach, focusing on long-term investments while also considering short-term opportunities for alpha generation [1] - The investment strategy emphasizes bottom-up analysis to assess the fundamental strengths and weaknesses of individual companies, targeting those with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - Costco is planning to build a stand-alone 40-bay gas station in Mission Viejo, California, to capitalize on the popularity of its gas offerings [1][2] - The new gas station is expected to open in spring 2026 and will be located near existing Costco warehouses, enhancing convenience for members [2][3] - Gasoline sales accounted for approximately $30 billion, or nearly 12.5% of Costco's total revenue last year, highlighting the significance of this segment for the company [4] Company Strategy - The decision to extend operating hours at existing gas stations has resulted in increased sales, indicating a successful strategy to boost customer engagement [1][3] - The new gas station is projected to handle up to nine fuel truck deliveries daily and serve over 9,500 vehicles between 5 a.m. and 10 p.m., suggesting strong anticipated demand [3] - Selling gas off-site may help alleviate traffic congestion at busy warehouse locations, providing a more streamlined experience for members [5] Competitive Positioning - Costco aims to maintain lower gas prices compared to competitors, further incentivizing membership and driving sales [4] - The company offers a 5% reward on fuel purchases for Costco credit cardholders, enhancing the value proposition for members [4] - CEO Ron Vachris has indicated a strategic focus on optimizing operations to manage traffic and improve customer experience at nearby warehouses [5]

Core Insights - Costco Wholesale Corporation (COST) reported a 10.4% year-over-year increase in membership fee income for Q3 of fiscal 2025, totaling $1,240 million, driven by a membership fee hike and an expanding member base [1][8] - Paid household memberships rose 6.8% year-over-year to 79.6 million, with executive memberships growing 9% to 37.6 million, representing 47.3% of paid memberships and driving 73.1% of worldwide sales [2][8] - The membership fee increase, effective from September last year, was complemented by product innovations and enhanced digital offerings, which helped maintain customer loyalty [4][3] Membership Growth and Retention - Costco achieved a 92.7% renewal rate in the U.S. and Canada, with a global renewal rate of 90.2%, indicating strong member retention despite some volatility in new digital memberships [2][8] - The growth in executive memberships, which are the most lucrative, highlights Costco's ability to enhance recurring revenues through pricing power and scale without alienating its core customer base [3][2] Competitive Landscape - Walmart Inc. reported a 15% rise in membership income in Q1 of fiscal 2026, with a 9.6% increase in U.S. membership income, showcasing its successful diversification of revenue streams [5] - BJ's Wholesale Club Holdings, Inc. experienced an 8.1% year-over-year increase in membership fee income to $120.4 million, attributed to strong member acquisition and retention [6] Financial Performance and Valuation - Costco's stock has outperformed the industry, rallying 14.1% over the past year compared to the industry's 5.6% growth [7] - The forward 12-month price-to-earnings ratio for Costco stands at 50.75, significantly higher than the industry average of 32.42, indicating a premium valuation [9] - The Zacks Consensus Estimate projects year-over-year growth of 8% in sales and 12% in earnings per share for the current financial year [10]

Group 1 - Zacks Premium provides various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1][2] - The Zacks Style Scores are complementary indicators that help investors select stocks likely to outperform the market in the short term [2][3] Group 2 - Each stock is rated from A to F based on value, growth, and momentum characteristics, with A being the highest score indicating better chances of outperforming [3] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [3][4] - The Growth Score emphasizes a company's financial health and future growth potential based on earnings and sales projections [4] - The Momentum Score assesses stocks based on price trends and earnings estimate changes to identify favorable buying opportunities [5] Group 3 - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors looking for attractive value, growth, and momentum [6] - The Zacks Rank utilizes earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988 [7][8] Group 4 - BJ's Wholesale Club has become a preferred shopping destination by simplifying product assortments and enhancing digital capabilities, leading to increased membership signups [12] - The company offers significant savings on groceries compared to traditional supermarkets, with a focus on value for customers [12] - BJ's Wholesale Club holds a 2 (Buy) rating on the Zacks Rank and has a VGM Score of A, indicating strong investment potential [13][14] - The company has a forward P/E ratio of 26.03 and has seen upward revisions in earnings estimates, with a Zacks Consensus Estimate of $4.29 per share for fiscal 2026 [13]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates involves significant risk and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - BJ's Wholesale Club is currently highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly attractive [3] - BJ's historical EPS growth rate stands at 10.4%, with projected EPS growth of 6% this year, surpassing the industry average of 4.6% [4] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, enabling expansion without relying on external funding [5] - BJ's year-over-year cash flow growth is currently at 5.3%, exceeding the industry average of 3.3% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 17.1%, compared to the industry average of 5.5% [6] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [7] - BJ's current-year earnings estimates have been revised upward, with the Zacks Consensus Estimate increasing by 1.5% over the past month [7] Group 5: Overall Assessment - BJ's has achieved a Zacks Rank of 2 and a Growth Score of A, indicating its potential as a solid choice for growth investors [9]

Core Viewpoint - BJ's Wholesale Club reported mixed first-quarter results, with adjusted earnings per share exceeding analyst expectations but revenues falling short of projections [1][2]. Financial Performance - Adjusted earnings per share for the first quarter were $1.14, surpassing the consensus estimate of $0.92 [1]. - Quarterly revenues reached $5.15 billion, reflecting a year-over-year increase of 4.7%, but missed the expected $5.20 billion [1]. Future Guidance - The company reaffirmed its full-year 2025 adjusted earnings guidance of $4.10 to $4.30 per share, compared to the $4.24 estimate [2]. - BJ's expects comparable club sales (excluding gasoline) to grow between 2.0% and 3.5% for the year [2]. - Planned capital expenditures for the year are approximately $800 million [2]. Stock Performance and Analyst Ratings - Following the earnings announcement, BJ's Wholesale shares experienced a slight decline of 0.1%, closing at $115.88 [3]. - Analysts have adjusted their price targets for BJ's Wholesale, with Morgan Stanley raising it from $115 to $125, Loop Capital from $110 to $120, and Wells Fargo from $125 to $127 [8].

Financial Performance - BJ's Wholesale Club reported a 4.7% increase in net sales to $5 billion for fiscal Q1 2025, with comparable sales (excluding gas) up 3.9% and adjusted earnings per share (EPS) of $1.14. Operating income increased by 27% and net income rose by 35% year over year [1]. Membership Growth - The share of higher-tier memberships grew by over 100 basis points sequentially to surpass 40% for the first time, driven by product and benefit enhancements, with a January fee increase not affecting uptake [2][3]. This shift to premium membership tiers enhances customer lifetime value, improves renewal rates, and raises average spend [3]. Digital Sales and Engagement - Digitally enabled comparable sales surged by 35% year over year, contributing significantly to total sales growth, and have maintained double-digit growth for four consecutive years. Enhanced fulfillment technology utilizing AI and robotics reduced order picking time by over 45% [4][5]. Expansion and Real Estate Strategy - The company opened five new clubs and four gas stations during the quarter, including a new location in Staten Island, with plans for 25 to 30 new clubs over the next two years. There was a 2% increase in comparable gas gallons, contrasting with a decline in broader U.S. industry volumes [6][7]. Future Outlook - Management reaffirmed fiscal 2025 guidance for comparable sales growth (excluding gas) of 2% to 3.5% and adjusted EPS of $4.10 to $4.30, exercising caution due to potential macroeconomic conditions. The first half of fiscal 2025 is expected to be the strongest for same-store sales comps, with a focus on margin discipline amidst ongoing investments [8].

Group 1 - BJ's Wholesale Club Holdings, Inc. reported fiscal Q1 results on May 22, showing sales nearly in line with Wall Street's consensus [1] - Profitability metrics indicated a decline compared to previous periods, raising concerns about the company's financial health [1] Group 2 - The company operates in the wholesale retail sector, which has been facing challenges due to changing consumer behaviors and economic conditions [1] - Analysts are closely monitoring BJ's performance as it reflects broader trends in the retail industry, particularly among small-cap companies [1]

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.Zacks Premium includes access to the Zacks Style Sc ...

Group 1: Stock Split Overview - The first major stock split of 2025 has been announced by O'Reilly Automotive, marking its first forward split in 20 years and fourth since going public in 1993 [17][18] - O'Reilly Automotive's board approved a 15-for-1 forward split, which is expected to take effect after trading closes on June 9, 2025 [18] - The stock split is aimed at making it easier for employees to purchase whole shares rather than fractions, enhancing participation in the employee stock purchase plan [19] Group 2: Company Performance - O'Reilly Automotive's stock has increased over 4,500% since its last stock split two decades ago, indicating strong company performance and effective management decisions [20] - The average age of vehicles on U.S. roads has risen to 12.6 years in 2024, which benefits auto parts suppliers like O'Reilly as consumers tend to keep older vehicles longer [21] - O'Reilly's hub-and-spoke distribution model, with 31 regional distribution centers and nearly 400 hub stores, ensures efficient supply and availability of over 153,000 stock keeping units (SKUs) [22] Group 3: Share Repurchase Program - O'Reilly Automotive has executed a significant share repurchase program, buying back 96.5 million shares for a total investment of $25.94 billion, resulting in a 59.4% reduction in outstanding shares [23] - The reduction in share count due to buybacks is expected to positively impact earnings per share (EPS), making the stock more attractive to investors [23] Group 4: Market Resilience - The demand for auto parts is considered relatively recession-resistant, suggesting that O'Reilly Automotive's stock may continue to rise in the long term [24]