Shares of BJ’s Wholesale Club ( BJ -6.80% ) declined today following the release of a disappointing second-quarter earnings report from the warehouse club chain.
Although the company exceeded expectations for the last quarter, the forecast for the full year predicts that earnings per share (EPS) will be at the lower end of the projected range.
Consequently, by 12:46 p.m. ET, the stock had decreased by 6.5%.
Photo credit: Getty Images.
BJ’s surpasses expectations
The wholesale club retailer, which rivals Sam’s Club and Costco Wholesale Corporation reported strong performance in its fiscal second quarter, which concluded on August 3. Comparable sales, excluding gas, rose by 2.4%, and income from membership fees increased by 9.1%, reaching $113.1 million.
Consequently, revenue increased by 4.9% and reached $5.21 billion, surpassing the anticipated $5.15 billion. Margins remained largely unchanged, and adjusted earnings per share grew by 10% to $1.09, exceeding the expected $1.
CEO Bob Eddy stated, “During our second quarter, we experienced strong membership, increased traffic and unit expansion, along with a rapidly advancing digital business, all contributing to a solid performance for the quarter.”
The advice given was disappointing.
BJ’s expects comparable sales, not including gas, to increase by 1% to 2% for the year. This growth is attributed to an increase in customer traffic and unit expansion, along with a robust performance in their perishables sector.
It also mentioned that it was aiming for adjusted targets. profit per share ranging from $3.75 to $4, although the company anticipated that long-term investments would bring its EPS closer to the lower end of this spectrum. This is in comparison to the analysts’ consensus of $3.93.
Although that guidance is somewhat disappointing, BJ’s has managed to compete effectively with larger competitors such as Costco and Sam’s Club, and the stock appears to be well-positioned for consistent growth.
