Membership-only warehouse club BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) handsomely beat Wall Street’s expectations for the second-quarter of Fiscal 2022. Moreover, the retailer raised its Fiscal 2022 outlook and gave better-than-expected earnings per share guidance.
Following the news, BJ stock hit a fresh 52-week high of $77.47 in early trading. Shares ended the day up 7.2% at $74.09 on August 18.
BJ’s continued to increase its member base by offering quality products at affordable prices. In the current inflationary environment, customers are turning to retailers who offer essential items at reasonable prices and BJ’s is doing just that. This was witnessed by an 11.3% jump in BJ’s membership fee income to $98.8 million compared to the prior-year period.
Furthermore, BJ is also improving its digital business by offering more convenience and optionality to its members. In Q2, BJ’s digitally-enabled sales grew an impressive 47% compared to the year-ago period.
Commenting on the occasion, BJ’s President and CEO Bob Eddy said, “Our strong results in the second quarter were led by gains in traffic and market share as we continued to deliver tremendous value across virtually every aspect of our business.”
A Gist of BJ’s Q2 Results
BJ’s reported adjusted earnings of $1.06 per share, up 29.3% year-over-year. The figure came in a whopping 25 cents higher than analyst estimates.
Similarly, total revenues of $5.10 billion rose 22.2% compared to the same period last year and easily beat the consensus by $470 million. Net sales, excluding membership fees, leaped 22.4% to $5 billion compared to Q2 FY21. The solid revenue growth was driven by increased sales of groceries. Notably, BJ’s total comparable club sales jumped 19.8% year-over-year.
During the quarter, BJ’s repurchased 353,000 shares of common stock, valuing $22.8 million. The company even completed the $375.6 million acquisition of Burris Logistics. BJ’s acquired four distribution centers and a related private transportation fleet from Burris and has consolidated its results from the start of the second quarter.
BJ’s Raises Outlook for FY22
Based on the strong demand for groceries and increasing market share, BJ’s lifted its FY22 outlook. The company now expects comparable club sales growth (excluding gasoline sales) to be in the 4% to 5% range, higher than the previous guidance of a low single digit.
Similarly, BJ’s increased its FY22 earnings guidance to fall between $3.50 to $3.60 per share, up from its original guidance of $3.25 per share. Meanwhile, the consensus for the same is pegged lower at $3.34 per share.
Is BJ’s Wholesale Club a Good Stock to Buy?
Wall Street analysts are cautiously optimistic about BJ stock. On TipRanks, BJ’s has a Moderate Buy consensus rating based on seven Buys, three Holds, and one Sell. The average BJ’s Wholesale Club price forecast of $76.73 implies 3.6% upside potential to current levels. Meanwhile, the stock has gained 12.8% so far this year.
On the other hand, retail investors, too, are optimistic about BJ stock. TipRanks’ Stock Investors tool shows that investor sentiment is currently Positive on BJ’s Wholesale Club, with 2.4% of portfolios tracked by TipRanks increasing their exposure to BJ stock over the past 30 days.
Ending Thoughts
BJ’s second quarter results were impressive with handy revenue and earnings beat. Plus, the company has raised its full-year outlook, which is also better than the consensus. BJ’s is benefiting from the shifting consumer preference for affordable quality products amid a heating inflationary environment. And with the management being so optimistic about the company’s growth, BJ stock could be worth considering.
