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]

Core Insights - BJ's Wholesale Club Holdings, Inc. reported third-quarter fiscal 2025 results that exceeded Wall Street expectations, leading to an increase in the full-year profit forecast due to rising membership income [1] Financial Performance - The company posted adjusted earnings per share of $1.16, surpassing analysts' expectations of $1.10 [2] - Revenue reached $5.35 billion, matching consensus estimates and reflecting a 4.9% increase compared to the same period last year [2] - Comparable club sales rose by 1.1% year over year, while comparable sales excluding gasoline increased by 1.8%, indicating a two-year stacked growth of 5.5% [2] Membership and Sales Growth - Membership fee income, a crucial profitability driver, grew by 9.8% to $126.3 million, supported by strong member acquisition and retention trends [3] - Digitally enabled sales expanded by 30% year over year, with a two-year stacked growth rate of 61% [3] Future Outlook - The company narrowed its full-year comparable club sales outlook but raised its earnings forecast, now expecting fiscal 2025 adjusted earnings per share of $4.30 to $4.40, compared to analyst expectations of $4.33 [3]

Core Viewpoint - Walmart is facing stronger headwinds as it transitions from a high-growth phase to a more mature stage, yet it continues to generate significant returns for investors through its extensive U.S. presence and online strategy [1][4]. Company Overview - Walmart has a market capitalization exceeding $815 billion, indicating that its growth potential is unlikely to match its earlier rapid expansion [4]. - Approximately 90% of U.S. consumers live within 10 miles of a Walmart location, highlighting its strong market presence [4]. - Walmart's Sam's Club division is noted as the most successful warehouse retailer in the U.S. after Costco [4]. Financial Performance - In the first half of fiscal 2026, Walmart reported revenue of $343 billion, reflecting a 4% increase year-over-year [9]. - The company's net income for the first two quarters reached $11.5 billion, a 20% increase from the previous year [9]. - Walmart has raised its fiscal third-quarter outlook, expecting net sales to rise between 3.75% and 4.75% annually [10]. Dividend and Returns - Walmart offers a dividend of $0.94 per share, resulting in a current yield of 0.9% [5]. - Over the past decade, a $1,000 investment in Walmart stock has yielded total returns exceeding $5,800, with approximately $1,000 from dividends [6]. - Walmart has a track record of 52 consecutive years of annual dividend increases, qualifying it for Dividend King status [5]. Valuation Concerns - Walmart's stock is currently valued at a P/E ratio of 39, which is higher than Amazon's 35 and Target's 10 [10]. - This elevated valuation may lead investors to question the stock's worth compared to potential alternatives [10][13]. Investment Outlook - While Walmart's long-term track record and rising dividends make it a solid holding, the current market conditions may not be ideal for adding shares [14]. - The company's revenue growth of 4% is not significantly above inflation and population growth, raising concerns about its future performance [12].

Core Insights - Costco Wholesale has achieved a total return of 733% over the past decade, making it the third-largest retailer globally, following Walmart and Amazon [1] Group 1: Financial Performance - In the fiscal 2025 third quarter, Costco reported net sales of $62 billion, showcasing its significant market presence [1][3] Group 2: Competitive Advantage - Costco's business model involves selling a limited number of stock-keeping units (SKUs), averaging around 4,000, compared to the 30,000 typically found in supermarkets, allowing for high volume sales of fewer products [3] - The company's scale provides a powerful cost advantage, enabling it to negotiate better terms with suppliers and pass on savings to customers [4] Group 3: Customer Engagement - Memberships at Costco have increased by 6.8% year-over-year in Q3, with a high renewal rate of 90.2%, indicating strong customer loyalty [4] Group 4: Investment Considerations - Despite Costco's strong performance and growth potential, the current price-to-earnings ratio stands at 54.2, suggesting that it may not be the right time to purchase shares [5]