Shares of BJ’s Wholesale Club Holdings Inc. (BJ) dropped 3.5% in premarket trading on Friday, reaching a two-month low. Although the membership-based warehouse retailer surpassed earnings expectations for its fiscal third quarter, it fell short on same-store sales and provided a disappointing outlook.
Strong Earnings Performance
In the quarter ending October 28, BJ’s reported a net income increase to $130.5 million, or 97 cents per share, compared to $129.9 million, or 95 cents per share, in the same period last year. Adjusted earnings per share declined slightly to 98 cents from 99 cents but still exceeded the FactSet consensus of 95 cents.
While total revenue grew by 2.9% to $4.925 billion, surpassing the FactSet consensus of $4.899 billion, same-store sales declined by 0.1%. This decrease differed from the expectation of a 1.0% rise.
For fiscal year 2023, BJ’s reiterated its adjusted earnings per share guidance range of $3.80 to $3.92. However, the company revised its guidance range for same-store sales growth to a 2% decrease to a 1% increase, down from the previously estimated growth of approximately 2%.
BJ’s stock has experienced a decline of 1.4% over the past three months through Thursday. In contrast, shares of rival company Costco Wholesale Corp. (COST) have gained 5.8%, while the S&P 500 (SPX) has recorded a 3.2% increase.