BJ's stock declines as revenue rises, but misses Wall Street estimates

By Steve Gelsi

Company's stock gives back some of its gains for the year

BJ's Wholesale Club Holdings Inc.'s stock dropped about 8% Thursday after the company reported second-quarter revenue that fell short of analyst predictions, though profit beat expectations.

BJ's (BJ) said its second-quarter net income rose 10.4% to $144.99 million, or $1.08 a share, from $131.33 million, or 97 cents a share, in the year-ago quarter.

Adjusted profit totaled $1.09 a share, well ahead of the FactSet consensus estimate of $1.01 a share.

Revenue increased 4.8%, to $5.09 billion, but fell short of Wall Street analysts' expectations of $5.15 billion.

BJ's summed up the results as "strong" due to "robust membership, accelerating traffic and unit growth, and a fast-tracking digital business."

Looking ahead, BJ's said it continues to expect 2024 adjusted EPS to range from $3.75 a share to $4 a share, compared with the analyst estimate of $3.95 a share.

DA. Davidson analyst Michael Baker reiterated a buy rating and said the retailer delivered better-than-expected profit. But its sales and net income outlook implies the retailer will face lower profit margins in coming quarters, he said.

BJ's appears to be making an "investment in price" as it diverts its profits into its "customer value proposition" in order to keep the costs of its goods relatively low for consumers, he said

Ahead of Thursday's moves, BJ's stock had risen 31.4% in 2024, compared to a 17.8% gain by the S&P 500 SPX this year.

-Steve Gelsi

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08-22-24 0956ET

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