WRAPUP 2-Warehouse clubs Costco, BJ's miss profit estimates

* Costco Q2 EPS 70 cts vs Wall St view 72 cts

* Costco February same-store sales up 9 pct

* BJ's Q4 EPS 95 cents vs Wall St view 96 cents

* Big Lots beats estimates, shares up 2.2 pct

* BJ's shares fall 5.4 percent; Costco down 0.4 percent
(Adds background, conference call comments, stock move, link
to graphic, BJ's first-quarter forecast)

By Nicole Maestri and Dhanya Skariachan

SAN FRANCISCO/NEW YORK, March 3 (Reuters) - Warehouse club
operators Costco Wholesale Corp (COST.O) and BJ's Wholesale
Club Inc BJ.N posted quarterly earnings below Wall Street
estimates, hurt by falling food prices.

Shares of Costco fell less than 1 percent, while BJ's
dropped more than 5 percent. Meanwhile, close-out retailer Big
Lots Inc (BIG.N), which specializes in sales of excess
inventory, reported higher-than-expected earnings, sending its
shares up more than 2 percent.

Costco, the No. 1 U.S. warehouse club operator, sought to
win market share during the recession by cutting prices and
delaying price increases.

While that strategy apparently helped it retain customers,
the company has not improved its margins as quickly as Wall
Street had hoped, said Robert W. Baird & Co analyst Peter
Benedict.

Costco's gross margins improved by 26 basis points,
Benedict said, while he had expected an increase of 37 basis
points.

"It's a very low-margin business, so a few basis points
here and there can have an outsized effect" on results, he
said.

Costco also said February same-store sales rose 9 percent,
including the impact of fuel prices and foreign exchange.

Excluding a charge for employee benefits, Costco earned 70
cents per share in the second quarter ended Feb. 14. Analysts
on average were expecting 72 cents, according to Thomson
Reuters I/B/E/S. [ID:nSGE6220B6]

Quarterly sales rose 11 percent to $18.36 billion,
excluding membership fees, which rose 9 percent to $386
million. Same-store sales increased 9 percent.
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Graphic on Costco results link.reuters.com/xas23j
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Warehouse clubs charge customers an annual fee to shop in
their stores and get discounts on items ranging from cartons of
fresh fruit to flat-screen televisions.

Costco, Wal-Mart Stores Inc's (WMT.N) Sam's Club and BJ's
Wholesale have gained customers seeking low prices on
necessities like groceries or toiletries in the economic
downturn. But falling prices for food and electronics have
pressured the clubs' results.

On its conference call, BJ's Wholesale said it continued to
be "significantly impacted" by deflationary pressures,
especially for perishable food.

While demand for discretionary merchandise is "creeping
along," Chief Executive Officer Laura Sen said, she has not
seen any major turnaround in that area.

BJ's said net profit rose to $55.1 million, or $1.01 a
share, in the fourth quarter ended on Jan. 30 from $52.7
million, or 91 cents a share, a year earlier.

Excluding one-time items, it earned 95 cents a share,
missing the analysts' average estimate by a penny.

Sales in the holiday quarter rose 9.4 percent to $2.74
billion, while same-store sales rose 4.6 percent, including
fuel. February same-store sales rose 7.5 percent.

A calendar shift in the timing of the Super Bowl from
January last year to February this year boosted merchandise
comparable-club sales by 2 percentage points, BJ's said.
However, the impact of severe winter storms more than offset
that benefit.

For the first quarter, BJ's forecast earnings per share of
40 cents to 45 cents. Analysts on average expect 43 cents.

BIG LOTS BEATS; OPTIMISTIC ABOUT Q1

Big Lots said profit rose to $105.4 million, or $1.27 per
share, in the fourth quarter ended on Jan. 30 from $78.8
million, or 96 cents a share, a year earlier. The retailer also
increased the size of its share repurchase program to $400
million. [ID:nSGE6210KT]

Excluding one-time items, it earned $1.31 a share, beating
the analysts' average estimate of $1.28.

On a conference call, Big Lots said customers responded
well to its reward points scheme and that February sales
benefited from a special event and a strong President's Day.
[ID:nWEN1163]

For the first quarter, the company expects earnings of 60
cents to 65 cents a share from continuing operations. Analysts
were looking for 53 cents.

Big Lots shares rose 2.2 percent to $34.68 in morning
trading. BJ's fell 5.4 percent to $34.51, while Costco was down
0.4 percent at $61.12.
(Reporting by Nicole Maestri and Dhanya Skariachan; Additional
reporting by Nivedita Bhattacharjee; Editing by Michele
Gershberg and John Wallace)