As a reluctant member of BJ's Wholesale Club
Still, Costco is clearly the superior choice for customers who prefer quality over convenience. Its parking lot is in a permanent state of flux, with far too few parking spaces to accommodate the masses thronging to sacrifice their dollars upon the ringing altar of consumption. At BJ's, the parking lot is three-quarters empty even at noon on the Saturday before Christmas, and on any normal shopping day, no one ever has to park more than a couple hundred feet from the main entrance.
That said, when it comes to generating profits for its owners (i.e., its shareholders), BJ's is second to none. It showed that yesterday, reporting a 25% increase in second-quarter profits in comparison with Q2 2003, trouncing analyst estimates and exceeding even its own guidance in earning $0.40 per diluted share for its owners. Moreover, in an economic environment that has had market watchers bewailing the disappearance of the retail consumer, BJ's racked up truly impressive comparable store sales growth of 8.5%. The net addition of seven new stores provided the added sales necessary to boost total revenue growth to 12.5%. Meanwhile, BJ's ratcheted up the efficiency of its operations, squeezing just a few more fractions of a penny of profit out of each dollar of revenue, with the result that the company's profit margin increased from 1.34% a year ago to 1.52%.
Apparently, that is all it takes to boost earnings dramatically in the low-margin retailing world. If BJ's can keep up this kind of performance in the future, it won't be long before this small-cap warehouse retailer catches up to the big boys of the big box business: Costco and Wal-Mart's
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