Large-format Grocery & General Merchandise Retailer Stocks Q2 In Review: BJ's (NYSE:BJ) Vs Peers

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at large-format grocery & general merchandise retailer stocks, starting with BJ's (NYSE:BJ).

Big-box retailers operate large stores that sell groceries and general merchandise at highly competitive prices. Because of their scale and resulting purchasing power, these big-box retailers–with annual sales in the tens to hundreds of billions of dollars–are able to get attractive volume discounts and sell at often the lowest prices. While e-commerce is a threat, these retailers have been able to weather the storm by either providing a unique in-store shopping experience or by reinvesting their hefty profits into omnichannel investments.

The 4 large-format grocery & general merchandise retailer stocks we track reported a solid Q2. As a group, revenues beat analysts’ consensus estimates by 1%.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. Thankfully, large-format grocery & general merchandise retailer stocks have been resilient with share prices up 6.7% on average since the latest earnings results.

BJ's (NYSE:BJ)

Appealing to the budget-conscious individual shopping for a household, BJ’s Wholesale Club (NYSE:BJ) is a membership-only retail chain that sells groceries, appliances, electronics, and household items, often in bulk quantities.

BJ's reported revenues of $5.21 billion, up 4.9% year on year. This print exceeded analysts’ expectations by 1%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ earnings estimates but underwhelming earnings guidance for the full year.

“Our second quarter was marked by robust membership, accelerating traffic and unit growth, and a fast-tracking digital business, which led to strong performance in the quarter. This was our tenth consecutive quarter of traffic growth. We are driving healthy membership expansion across both existing and new clubs. Our compelling value proposition is resonating with our members and we believe our results demonstrate the meaningful progress we are making on our long term strategic initiatives,” said Bob Eddy, Chairman and Chief Executive Officer, BJ’s Wholesale Club.

Unsurprisingly, the stock is down 4.1% since reporting and currently trades at $83.97.

Is now the time to buy BJ's? Access our full analysis of the earnings results here, it’s free.

Best Q2: Costco (NASDAQ:COST)

Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.

Costco reported revenues of $58.52 billion, up 9.1% year on year, in line with analysts’ expectations. It was a very strong quarter for the company with an impressive beat of analysts’ gross margin estimates and a narrow beat of analysts’ earnings estimates.

Costco achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 8% since reporting. It currently trades at $880.07.

Is now the time to buy Costco? Access our full analysis of the earnings results here, it’s free.

Slowest Q2: Walmart (NYSE:WMT)

Known for its large-format Supercenters, Walmart (NYSE:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.

Walmart reported revenues of $169.3 billion, up 4.8% year on year, exceeding analysts’ expectations by 1.2%. It was a mixed quarter for the company with a solid beat of analysts’ gross margin estimates but underwhelming earnings guidance for the full year.

Interestingly, the stock is up 10.5% since the results and currently trades at $75.80.

Read our full analysis of Walmart’s results here.

Target (NYSE:TGT)

With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE:TGT) serves the suburban consumer who is looking for a wide range of products under one roof.

Target reported revenues of $25.45 billion, up 2.7% year on year, in line with analysts’ expectations. More broadly, it was a very strong quarter for the company with an impressive beat of analysts’ gross margin estimates and a solid beat of analysts’ earnings estimates.

Target had the slowest revenue growth among its peers. The stock is up 10.4% since reporting and currently trades at $159.47.

Read our full, actionable report on Target here, it’s free.

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