Shares of BJ’s Wholesale Association (NYSE: BJ) were down today in response to news of a disappointing second-quarter earnings report from the wholesale club chain.
While the company beat estimates for the past quarter, forecasters expected earnings per share (EPS) for the full year to be at the lower end of that forecast.
As a result, the stock was down 6.5% at 12:46 p.m. ET.
BJ’s exceeds expectations
The warehouse club chain, which competes with Sam’s Club and Costco Wholesalereported solid results for its second fiscal quarter ended August 3, with comparable sales excluding gasoline increasing 2.4% and membership revenue increasing 9.1% to $113.1 million.
As a result, revenue rose 4.9% to $5.21 billion, beating expectations of $5.15 billion. Margins remained broadly stable, and bottom line adjusted earnings per share rose 10% to $1.09, beating expectations of $1.09.
CEO Bob Eddy said, “Our second quarter was marked by strong membership, accelerating traffic and unit growth, and a rapidly growing digital business, resulting in a strong performance in the quarter.”
The instructions were not convincing
BJ’s expects comparable sales (excluding gasoline) to increase 1% to 2% for the year, driven by traffic and unit volume growth as well as strong perishables business.
The company also announced that it was targeting adjusted earnings per share of $3.75 to $4, but expected long-term investments to push earnings per share toward the lower end of that range. The analyst consensus was $3.93.
While this forecast is a slight disappointment, BJ’s has held up well against larger competitors like Costco and Sam’s Club, and the stock appears to continue to be capable of delivering steady growth.
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Jeremy Bowman does not own any stocks mentioned. The Motley Fool owns and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.
Why BJ’s Wholesale Stock Went Lower Today was originally published by The Motley Fool
