Send me real-time posts from this site at my email

Bull of the Day: BJ's Wholesale Club (BJ)

BJ’s Wholesale Club BJ is a membership-only retail club chain that operates primarily on the East Coast, as well as in Ohio and Michigan. BJ’s offers members a variety of name-brand products at discount wholesale prices across many categories like grocery, household, pet, toys, and more.

Q3 Earnings Recap

BJ’s revenue grew 14.3% year-over-year to $4.26 billion; actual product sales increased 14.4% while membership fees rose 7.7% over the prior-year period. "Membership size and quality continue to improve; first-year renewal rates remain at historic levels,” said BJ’s in the earnings press release.

Earnings came in at $0.92 per share, showing healthy improvement over Q3 2020 and easily beating Wall Street’s projections of $0.81 per share.

Comparable store sales (excluding gasoline sales) gained an impressive 5.7%, with digital sales spiking 44% year-over-year.

Cash flow remains strong too. Net cash provided by operating activities hit $173.9 million and free cash flow was $99.2 million for the quarter. BJ’s board also authorized a $500 million share repurchase program.

Notably, supply chain challenges weren’t too much of a factor for BJ’s in Q3. Gross profit margin did drop by 0.2 percentage points, but the wholesaler was able to offset that slump by selling more high-margin products like consumer electronics.

BJ Breaks Out


Year-to-date, shares of BJ have soared over 81%, which is above the S&P 500’s 25.2% increase. Earnings estimates have been rising too, and BJ is a Zacks Rank #1 (Strong Buy) as of this writing.

For fiscal 2021, seven analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up 26 cents to $3.18 per share. Earnings are expected to grow about 3% compared to the prior year period. Fiscal 2022 looks strong too; seven analysts have upped their outlook and our consensus estimate has climbed 30 cents to $3.46 per share.

Looking ahead, BJ’s management declined to offer guidance for the holiday quarter, citing “[continued] external factors and uncertainties in the market.”

But its improving membership renewal rates is a great sign as BJ’s looks to finish 2021 on a strong note and continue to expand its footprint. The market share BJ’s gained throughout the pandemic is a good sign that there’s still growing demand for wholesale retail.

If you’re an investor searching for a retail sector stock to add to your portfolio, make sure to keep BJ on your shortlist.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

See 3 crypto-related stocks now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BJ's Wholesale Club Holdings, Inc. (BJ): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue