The company hinted that the quarter has been challenging, as it faced intense competition from supermarket stores trying to grab market share by going aggressive in their pricing. This compelled BJ's to make pricing adjustments at the cost of margin. BJ's forecast a sluggish economic recovery and a weak consumer spending environment in the second half of 2010 that could intensify the competition.
Consequently, the company has taken a conservative stance and lowered its fiscal 2010 guidance. Therefore, we prefer an Underperform recommendation on the stock.
BJ'S WHOLESALE (BJ): Free Stock Analysis Report
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