Why Warehouse Club Chain BJ's Shares Are Falling Today

BJ's Wholesale Club Holdings Inc BJ reported a third-quarter FY23 sales growth of 2.9% year-over-year to $4.92 billion, missing the analyst consensus of $4.96 billion.

Total comparable club sales increased by 0.3%. Comparable club sales, excluding gasoline sales, were flat.

Membership fee income increased by 6.6% to $106.05 million. Digitally enabled comparable sales climbed 16% Y/Y.

Gross profit rose 4.3% Y/Y to $902.5 million from $877.1 million in 3Q22. Merchandise gross margin rate increased by 30 bps YoY.

Operating margin expanded slightly to 4.1% from 4% last year, and the operating income improved by 3.9% Y/Y to $199.37 million.

Adjusted EPS of $0.98 beat the consensus of $0.96.

BJ's Wholesale Club held $33.55 million in cash and equivalents as of October 28, 2023. Operating cash flow for nine months totaled $444.53 million.

Under its existing share repurchase program, the company repurchased 242,000 shares of common stock, totaling $17.1 million in Q3.

Related: BJ's Wholesale Club Likely To Report Lower Q3 Earnings; Here's A Look At Recent Price Target Changes By The Most Accurate Analysts

"During the third quarter, we posted accelerating membership growth, robust traffic gains and continued increases in market share," commented Chairman and CEO Bob Eddy.

4Q23 Outlook: BJ sees comparable club sales, excluding the impact of gasoline sales, to range from a 2% decrease to 1% increase YoY.

FY23 Outlook: BJ's Wholesale reaffirms EPS guidance of $3.80-$3.92 versus the consensus of $3.85.

BJ currently expects FY23 comparable club sales growth, excluding the impact of gasoline sales, to increase by 1.0% to 1.8% (prior view growth of 2% Y/Y).

Price Action: BJ shares traded lower by 4.59% at $64.50 premarket on Friday.