2022-11-25 13:45:00

Better Buy: Costco vs. BJ's Wholesale?

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Nasdaq
By The Motley Fool

Investors have come to different judgments about the shares of Costco Wholesale (NASDAQ: COST) and BJ's Wholesale Club (NYSE: BJ) this year. Both retailers are seeing strong growth as shoppers focus more on prices, but BJ's shares are trouncing those of its larger rival. The stock is beating most of its retailing peers, in fact, with its gain of 11% so far in 2022.

Let's look at whether that outperformance is justified or if investors should be buying Costco stock instead right now.

The latest results

BJ's mid-November earnings report was packed with good news about the business. The company posted a 5% boost in comparable-store sales through late October, with that growth coming on top of a 13% spike last year. Costco's latest comps increase was a bit faster at 7%.

BJ's also got a boost from increased demand for its memberships, which drive most of its profits. Fee income was up a robust 9%. We reported another quarter of strong results, demonstrating the power of our business model, CEO Bob Eddy said in a press release.

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