Home Stock Markets BJ’s Stock Leaps On Q1 Earnings Beat, Retailer Keeps Lid On Costs

BJ’s Stock Leaps On Q1 Earnings Beat, Retailer Keeps Lid On Costs

by WOOWinvest
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BJ's Stock Leaps On Q1 Earnings Beat, Retailer Keeps Lid On Costs

Updated 10:09AM ET

BJ’s Wholesale Club (BJ) – Get BJ’s Wholesale Club Holdings, Inc. report Stronger-than-expected first-quarter earnings on Thursday as Costco’s smaller-volume discount rival (COST) – Get the Costco Wholesale Corporation Report Reining costs to increase, which affects retail giant Target’s profit update (TGT) – Get Target Company Report and Walmart (WMT) – Get the Walmart Company Report.

Earnings per share for the three months through April were 82 cents, up 39% from a year earlier and well above the consensus Wall Street forecast of 72 cents, BJ said. BJ said group revenue rose 16.3 percent from last year to $4.4 billion, slightly above analysts’ estimates of $4.24 billion.

Same-store sales, excluding gasoline sales, rose 4.1% from last year, compared with expectations for a 2% increase, while membership fees rose 11.9% to $96.6 million, BJ said. Looking ahead to fiscal 2023, which ends in January, BJ’s reiterated its forecast for flat annual earnings.

“We had a very strong first quarter as the growth in membership traffic underscores the value we deliver. In the current inflationary environment, our business model is more important than ever,” said CEO Bob Eddy. “We also continue to build on the transformational results we have driven over the past two years,” Mr Eddy continued. “Our membership has never been stronger. We reached 6.5 million members in the first quarter, which is a testament to the value we consistently deliver to our members.”

“Our digital business remains a key competitive advantage. We are rapidly expanding our footprint and our recent acquisition of the perishable distribution network will support our future growth efforts and drive long-term shareholder value,” he added road.

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Shares of BJ were up 9.3% in early trade after the earnings report, indicating an opening price of $58.41 a share, a move that would bring the stock’s year-to-date decline to around 10.4%.

Overall BJ’s costs rose 6% from last year to $635.4 million, the company said, “primarily due to higher labor costs due to wage investments last year,” while merchandise margins fell 30 basis points from last year and were hit by “increased freight costs and increased labor costs.” Tactical investments in the inflation category.”

Still, the rising costs contrasted with the issues that hit Walmart and Target earlier this week, sparking the biggest one-day losses in their respective stocks since 1987.

The company said yesterday that Target’s first-quarter expenses rose 18.9%, while Walmart noted that operating expenses as a percentage of net sales rose 45 basis points “primarily due to higher payroll costs at Walmart U.S.”

U.S. retail sales growth stabilized in April, totaling $677.7 billion, as record-high oil prices and soaring inflation failed to deter spending in the world’s largest economy, Commerce Department data showed earlier this week.

U.S. inflation moderated moderately last month from the fastest pace in 40 years, but core consumer price pressures continued to rise, suggesting readings in the world’s largest economy have continued to rise longer than expected.

So-called core inflation, which strips out volatility such as food and energy prices, rose 0.6 percent this month and 6.2 percent from a year earlier, near its highest level since February 1991.

A sharp rise in airfares (up 33% from last year), as well as used car prices, veterinary fees and the cost of delivery services drove up core prices, suggesting that inflationary pressures may be deeper.

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