BJ’s Wholesale Rises As EPS Spikes 97% In 2Q

Shares of BJ’s Wholesale Club Holdings rose 2.4% on Thursday after the membership-only warehouse club chain operator reported stronger-than-expected 2Q results. Its adjusted EPS increased 97.4% to $0.77 and beat Street estimates of $0.60.

BJ’s Wholesale’s (BJ) 2Q revenues jumped 18.2% to $3.95 billion year-on-year and surpassed analysts’ expectations of $3.73 billion. A key revenue metric, comparable club sales surged 24.2% during the quarter. The company also revealed that its digitally enabled sales grew 300% amid the pandemic. The company’s quarterly results benefited as consumers rushed to stock up on essential goods due to the stay-at-home restrictions.

BJ’s CEO Lee Delaney said that “We delivered another remarkable quarter with strong comp growth and record profitability. Our business has been transformed and strengthened in the last six months by every measure. We are extremely well positioned to continue to win as we invest in digital capabilities, membership, assortment, marketing and geographic expansion to further accelerate this transformation.” (See BJ stock analysis on TipRanks).

Oppenheimer analyst Rupesh Parikh maintained a Hold rating and said “BJ’s remains one of the biggest beneficiaries related to the pandemic in our coverage universe. We are again lifting our numbers for the remainder of the year. Shares have now more than doubled off the lows. As we look at
BJ’s prospects over the next 12-18 months, we view shares as fairly valued.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 9 Buys, 5 Holds, and 1 Sell. With shares up about 96% so far this year, the average price target of $42 now implies a downside potential from the current share price.

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