Join        Login             Stock Quote

Comparing Costco & BJ's Results

 March 04, 2009 12:04 PM

This morning, two membership warehouses reported 4th quarter results. Costco (COST) missed Zacks consensus EPS estimates by $0.05, while revenues were in line. BJ's Wholesale Club (BJ) reported earnings of $0.89 per share $0.03 above the Zacks consensus estimate, while falling a little short on revenue.

Both companies were negatively affected by gasoline deflation. As gasoline prices fall, BJ's and Costco's overall gasoline sales fall. Costco, which generates about 20% of its sales outside the US, was also hurt by the stronger US dollar.

Those trends were largely offset by an increasing number of consumers looking to get the most value for the dollar. This is evident in the 3.7% rise in Costco's membership fees and a 7% increase in BJ's store traffic (excluding gasoline sales).

Both companies are attracting shoppers because of their prices are so low. The companies' razor-thin gross margins shows this to be the case. In the 4th quarter, Costco had an overall merchandise margin of 12.3%, down from 12.5% in the year-ago quarter.

BJ's gross margin is lower than Costco's, but it moved higher in the 4th quarter. BJ's gross margin was 11.3%, up 20 basis points from the year-ago quarter. In the current economic environment, more shoppers will be walking the aisles of a Costco or BJ's Wholesale Club.

Looking ahead, BJ's expects to earn $2.26-$2.36 per share compared to the Zacks consensus of $2.26 consensus. Consistent with its Feb 4 pre-announcement, Costco did not provide full-year guidance.


Comments Closed

rss feed

Latest Stories

article imageHas Warren Buffett Found The Best Investment In Oil?

Shares of oil stocks plunged again as the price of West Texas Intermediate wiped out nearly half of its read on...

article imageDemand For Safe-Haven Bonds Surged Last Week

The crowd piled into investment-grade bonds last week as economic worries triggered an exodus out of risky read on...

article imageThoughts on MetLife and AIG

In some ways, this is a boring time in insurance investing.  A lot of companies seem cheap on a book and/or read on...

article imageA 2016 Recession Would Be Different

If the US or the Eurozone entered a recession this year, a few macroeconomic variables would look very read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.