BJ's Wholesale Club is approaching a buy point of 75.64 in a cup-with-handle base. Shares of the growth stock have a healthy Composite Rating of 88 and an adequate Relative Strength Rating of 83. But its impressive 95 EPS Rating makes the stock noteworthy, earning it a place in the elite IBD 50 stock list.
BJ's ranks second in the Retail-Discount & Variety industry group. Sales grew 12% to $4.7 billion in the last quarter while earnings of 99 cents per share rose 9% year over year. Fourth-quarter earnings are due March 9.
The Westborough, Mass., retailer operates primarily on the East Coast, with 235 warehouse clubs and 164 gas stations across 18 states. It sells perishable and general merchandise, as well as gasoline and other services.
The growth stock has been pushing its digital adoption.
E-commerce sites BJs.com, BerkleyJensen.com, Wellsleyfarms.com and Delivery.bjs.com all sell BJ merchandise. It offers a mobile app used in conjunction with ExpressPay, allowing customers to scan items and pay on the go.
It has also teamed up with DoorDash to deliver from 226 store locations across 17 states. The partnership will allow BJ's to grow its on-demand grocery delivery segment.
For payments, the growth stock offers SNAP EBT and a Mastercard program through Capital One. Digitally enabled sales grew 43% in the third quarter.
Membership has continued to grow despite rising fees. In the third quarter, fees from income rose 8.7% to $99.5 million. Comparable club sales, excluding gas, rose 5.3% year over year.
The company gave a robust outlook for the full year and expects comparable club sales growth of 5% to 5.5%, excluding gas. It also forecast earnings per share of $3.70 to $3.80 for 2023.
Plans are underway to open the first store in Tennessee, with future openings in Virginia and New Jersey.
The company reduced its debt by $154.3 million from the second quarter of 2022, and repurchased an additional 684,819 shares of common stock. So far, the wholesaler has repurchased 1,608,325 shares of common stock.
Mutual Fund Ownership of Growth Stock
Mutual funds own 62% of outstanding shares. The stock also has a favorable Accumulation/Distribution Rating of B+, which shows strong interest from fund managers. More funds have been buying the stock over the past seven quarters.
Exchange traded funds hold shares of BJ, including the iShares Core S&P Mid-Cap ETF and the Vanguard Small Cap ETF.
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