BJ's Wholesale Club Off After Stronger-Than-Expected Earnings

BJ's Wholesale Club shares fell after stronger-than-expected earnings. Investors took profits after the membership retailer's stock surged.
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Shares of BJ's Wholesale Club  (BJ) - Get Report fell Thursday after its stronger-than-expected earnings report, as investors took profits on recent gains by the membership warehouse retailer.

In the fiscal third quarter ended Oct. 31, profit jumped to $122.8 million, or 88 cents a share, from $55.1 million, or 40 cents a share, in the year-earlier quarter.

Adjusted earnings per share more than doubled to 92 cents from 41 cents, topping the FactSet consensus analyst estimate of 65 cents.

BJ’s reported revenue of $3.73 billion, up 16% from a year earlier and more than the FactSet analyst consensus of $3.67 billion. 

Same-store sales surged 18.5%, topping the forecast of a 15.5% gain.

Gross margin excluding gasoline sales and membership-fee revenue widened 0.1 percentage point.

BJ’s has benefited from heavy consumer shopping for staples during the coronavirus pandemic.

Its shares recently traded at $40.74, down 5.3%. The stock climbed 14% from Nov. 9 through Wednesday and has skyrocketed 89% year to date.

The third quarter saw "robust comp growth, significant market share gains and record profitability," Chief Executive Lee Delaney said in a statement.

"As we look ahead, we are confident our business will continue to thrive given the structural shift in consumer behavior, our market-share gains and our strategic investments in digital capabilities, membership, assortment, marketing and geographic expansion."

On Tuesday, analysts offered positive commentary for BJ’s competitor Costco  (COST) - Get Report after it declared a $10-a-share special dividend. 

The special dividend, Costco's fourth in eight years, is payable Dec. 11 to holders of record Dec. 2. 

Costco said it would fund the $4.4 billion total payout with cash on hand.