BJ's Wholesale Club gave a stronger-than-expected 2023 outlook Thursday after reporting better-than-expected fourth-quarter earnings and revenue. BJ stock jumped, clearing a buy point.
BJ's Wholesale Club Earnings
The discount retailer posted earnings per share of $1.00 vs. FactSet consensus expectations for 88 cents. It reported revenue of $4.930 billion vs. $4.785 billion expected. Same-store sales climbed 9.8%, well ahead of the 5.5% estimate.
Year over year, BJ's earnings grew 25% and revenue rose 13%.
Membership fee income increased by 8% to $101.8 million, the company said. Digital sales grew 22%.
"Our membership base is stronger than ever with our tenured renewal rate reaching an all-time high of 90%," President and Chief Executive Officer Bob Eddy said in an earnings release. "Our continued focus on value has driven traffic and market share gains all year."
Outlook: For the new fiscal year, which started Jan. 29, BJ's predicted "EPS to remain approximately flat year-over-year, including the 53rd week benefit of low-teens cents per share."
Analysts were expecting fiscal 2023 to be down 2.5%, FactSet shows.
For the long term, BJ's guided comparable club sales growth in the low-to-mid single digits, excluding the impact of gasoline sales. It expects long-term revenue growth in the mid single digits and EPS growth in the high-single to low-double digits.
BJ Stock Breaks Out
Shares pared back a 5% gain to 2.4%, closing at 76.06 on the stock market today. The move put BJ stock in a buy range above a 76.04 handle buy point, the MarketSmith chart shows.
In a note to clients early Thursday, Wells Fargo analyst Edward Kelly called the 2023 guidance conservative.
"BJ exceeded high expectations in Q4 with yet another strong quarter," he said.
Its "2023 guidance of flat EPS with the extra week is above consensus and seems conservative," he added. "The new (high single digit/low double-digit) multi-year algo looks very achievable and attractive." Kelly remains overweight on shares but upped his price target on BJ stock to $87, from $80.
Discount retailers have found favor as defensive plays amid inflation and global recession fears.
