BJ's vs. Costco vs. Big Lots (BJ, COST, BIG)

We have two entirely different reports this morning in the big box retail sector, and a wild card underdog winner.  BJ’s Wholesale Club Inc. (NYSE: BJ) reported better-than-expected results, while Costco Wholesale Corp. (NASDAQ: COST) did not.  The good news is some of the bad news was anticipated.  Big Lots Inc. (NYSE: BIG) may be a wild card.

BJ’s Wholesale posted $0.89 EPS vs. $0.86 estimates.  Same store sales actually rose 1.7% for the quarter, and they rose over 6% on an ex-fuel basis.  BJ’s also issued in-line guidance for FY2010 at $2.26 to $2.36 EPS vs. $2.28 consensus estimates.

Costco earned $0.55 EPS vs $0.59 EPS estimates as $16.84 billion in revenues met expectations.  The quarter’s same store comparable sales were down 3%, although they fell 1%  on a currency adjusted basis.  Sales rose 5% if you exclude fuel.

Big Lots is a different sort of big box retailer as you never know what it will have and as shoppers think of it as an “almost $1.00 store.”  It beat earnings at $1.00 EPS vs. $0.93 EPS; revenue fell 3.2% year- over-year to $1.37 billion but were above the $1.36 billion estimate.  For Q1 it sees $0.34 to $0.40 vs $0.35 estimates.  For FY2010 it sees $1.75 to $1.90 EPS vs estimates of $1.73.   Comparable store sales  are expected to decrease of 1% to 3%.

BJ’s Wholesale Club stock is indicated up about 3% pre-market, although we have not seen the stock trade.  Costco is basically flat at $40.70 in pre-market trading.  With a high of $75.23, it seems traders are willing to take a look here.  Big Lots is  the big gainer of the three this morning as shares are up 12% at $16.40 pre-market.

Jon C. Ogg
March 4, 2009