Core Viewpoint - BJ's Wholesale Club is trading at a significant discount compared to Costco, presenting an interesting investment opportunity for those who find Costco's stock too expensive [1]. Membership and Sales Trends - BJ's total fiscal third-quarter revenue increased by 4.9% year over year to $5.35 billion, with comparable sales growing by 1.1%, and adjusted for gasoline prices, they rose by 1.8% [5]. - Membership fee income surged by 9.8% to $126.3 million, driven by higher-tier membership penetration and fee increases [5]. - Digitally enabled comparable sales grew by 30% year over year, indicating a significant increase in online sales contribution [7]. Profitability and Operating Performance - BJ's operating income declined by 4.8% year over year to $218.4 million, while net income slipped by 2.4% to $152.1 million due to rising labor and occupancy costs [6]. - The company expects comparable club sales, excluding gasoline, to rise by 2% to 3% for the full fiscal year and has raised its adjusted earnings-per-share outlook to a range of $4.30 to $4.40 [7][8]. Valuation Comparison - BJ's trades at approximately 19 times forward earnings and about 0.6 times sales, while Costco trades at a forward price-to-earnings ratio of about 44 and 1.4 times sales [11]. - The valuation gap reflects BJ's slower growth profile, with total revenue increasing by 4.3% year over year to $15.9 billion for the first nine months of fiscal 2025, compared to Costco's 8.2% revenue growth [10][11]. Market Position and Competitive Landscape - BJ's operates fewer than 300 clubs, while Costco has over 900, which contributes to Costco's stronger brand recognition and sales volume [12]. - BJ's must demonstrate its ability to achieve sustained sales growth and competitive advantages in a crowded market that includes Costco and Walmart's Sam's Club [14]. Investment Perspective - BJ's current valuation appears reasonable for a membership-based retailer with positive comparable sales and increasing membership fees, making it a solid alternative for investors seeking exposure to the warehouse club model [15].

Core Insights - Costco Wholesale Corporation reported a net sales increase of 8.0% for the fourth quarter, reaching $84.4 billion, compared to $78.2 billion in the previous year. For the fiscal year, net sales rose by 8.1% to $269.9 billion from $249.6 billion [1] Sales Performance - Comparable sales for the fourth quarter showed a total company increase of 5.7%, with U.S. sales up by 5.1%, Canada by 6.3%, and Other International by 8.6%. For the fiscal year, total company comparable sales increased by 5.9% [2] - E-commerce sales experienced significant growth, with a 13.6% increase in the fourth quarter and a 15.6% increase for the fiscal year [2] Profitability - Net income for the fourth quarter was $2.610 billion, or $5.87 per diluted share, compared to $2.354 billion, or $5.29 per diluted share, in the previous year. The fiscal year net income was $8.099 billion, or $18.21 per diluted share, up from $7.367 billion, or $16.56 per diluted share [3] Operational Footprint - Costco operates a total of 914 warehouses globally, with 629 located in the United States and Puerto Rico, and additional locations in Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Sweden, Iceland, and New Zealand [4] Financial Overview - Total revenue for the fourth quarter was $86.156 billion, an increase from $79.697 billion the previous year. Membership fees also rose to $1.724 billion from $1.512 billion [9] - Operating income for the fourth quarter was $3.341 billion, compared to $3.042 billion last year, indicating improved operational efficiency [9]

Core Insights - Walmart Inc.'s advertising growth is a significant highlight in Q2 of fiscal 2026, with a 46% increase in global advertising revenue, indicating a shift towards new revenue sources beyond traditional retail sales [1][7] - The advertising segment is enhancing Walmart's income statement by providing higher-margin growth compared to core retail, with marketplace sales rising nearly 20% and 44% of marketplace volume fulfilled through Walmart services [2][3] - The increase in ad sales reflects Walmart's ability to monetize traffic as e-commerce grows, with global digital sales up 25% in Q2, positioning advertising as a crucial driver for long-term resilience against cost pressures [3] Advertising Growth - Walmart's global advertising business surged 46% in Q2, with U.S. advertising through Walmart Connect growing 31% and Sam's Club ads increasing by 24%, while international markets like Flipkart contributed 15% to the growth [1][7] - Advertising and membership fees are improving margins, helping to offset tariffs and inflation, and contributing to overall profit growth [2][7] Market Performance - Walmart's shares have increased by 29.8% over the past year, closely aligning with the industry's growth of 30%, while competitors like Costco and Target have seen different performance levels [4] - The forward 12-month price-to-earnings ratio for Walmart is 36.62, which is higher than the industry average of 33.51, indicating a premium valuation compared to Target but a discount relative to Costco [5] Financial Estimates - The Zacks Consensus Estimate for Walmart's current financial-year sales implies a year-over-year growth of 4%, with earnings per share expected to grow by 3.6% [9] - Current estimates for Q2 sales are projected at $177.01 billion, with a year-over-year growth estimate of 4.38% [10]

Financial Performance - For the quarter ended May 2025, Costco reported revenue of $63.21 billion, an increase of 8% year-over-year [1] - EPS for the quarter was $4.28, up from $3.78 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $63.14 billion by 0.10%, and EPS also surpassed the consensus estimate of $4.25 by 0.71% [1] Key Metrics - Comparable sales for the total company increased by 5.7%, exceeding the average estimate of 5.4% from seven analysts [4] - Excluding the impact of foreign currency and gasoline prices, comparable sales for the total company rose by 8%, compared to the average estimate of 6.8% [4] - The number of warehouses worldwide was 905, slightly below the average estimate of 906 [4] - In the U.S. and Puerto Rico, the number of warehouses was 624, above the estimated 622 [4] Regional Performance - Comparable sales in the U.S. were up 6.6%, surpassing the average estimate of 5.5% [4] - Comparable sales excluding foreign currency and gasoline prices in the U.S. increased by 7.9%, compared to the average estimate of 6% [4] - Comparable sales in Canada were 2.9%, below the average estimate of 6% [4] - Comparable sales for Other International regions were 3.2%, below the average estimate of 5.6% [4] Membership Revenue - Membership fees revenue was reported at $1.24 billion, matching the average estimate from nine analysts and representing a year-over-year increase of 10.4% [4] - Net sales revenue was $61.97 billion, slightly below the average estimate of $62.05 billion, but still reflecting an 8% increase compared to the previous year [4] Stock Performance - Costco shares returned +1.9% over the past month, while the Zacks S&P 500 composite increased by +6.7% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]