BJ’s Wholesale Club Stock Slides After Third Quarter Results; warns of continued pressure on commodity margin

  • BJ’s Wholesale Club Holdings Inc (NYSE: BJ) reported third-quarter FY22 sales growth of 12.3% year-over-year to $4.79 billion, beating consensus of $4.69 billion.

  • Total comparable club revenue increased by 9.7%. Comparable club sales, excluding gasoline sales, increased by 5.3%.

  • Revenue from dues increased by 8.7% to $99.5 million.

  • Gross profit increased 10.9% year-on-year to $877.1 million with a margin of 18.3%.

  • The merchandise gross margin rate, which excludes gasoline sales and membership fee revenue, declined 30 basis points year-on-year.

  • Operating margin was 4% and operating profit for the quarter increased 12.8% to $191.9 million.

  • Adjusted EBITDA of $272.3 million increased 19.2% year-on-year.

  • Adjusted EPS of $0.99 beat analyst consensus of $0.81.

  • Big BJ Club held $34.6 million in cash and cash equivalents as of October 29, 2022.

  • Cash flow from operating activities for the nine months totaled $616.1 million.

  • Outlook: BJ’s Wholesale raised its FY22 EPS guidance to $3.70-$3.80 from the previous estimate of $3.50-$3.60 from an estimate of $3.61.

  • BJ expects same-store club sales growth for FY22, excluding the impact of gasoline sales, to be in the range of 5% to 5.5% (previously 4% to 5%).

  • BJ expects continued pressure on the commodity margin rate.

  • Price Action: BJ shares traded down 6.11% to $73.57 when last checked on Thursday.

  • Photo via company

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