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Category: Stock Market and BJ's Wholesale Club
Date: 17 September 2019 Stock Price: $26.89 We take a look at the 2nd quarter earnings release of their 2019 fiscal year of BJ's Wholesale Club the discount grocery store retailer.
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About BJ's Wholesale Club
BJ’s Wholesale Club is a leading warehouse club operator on the East Coast of the United States. We deliver significant value to our members, consistently offering 25% or more savings on a representative basket of manufacturer-branded groceries compared to traditional supermarket competitors. We provide a curated assortment focused on perishable products, continuously refreshed general merchandise, gas and other ancillary services to deliver a differentiated shopping experience that is further enhanced by our omnichannel capabilities.
The image below shows BJ's value proposition flywheel is shown below
The image below shows BJ's value proposition flywheel is shown below
Overview of BJ's Wholesale Club's latest earnings report
The numbers we are interested in (for the quarter):
- Total revenue: $3.345 billion (up from $3.307 billion from the same quarter of the previous year)
- Revenues increased by 1.14% over the last 12 months
- Cost of Sales: $2.733 billion (up from $2.718 billion for the same quarter of the previous year)
- Cost of revenues increased by 0.55% over the last 12 months
- Net income: $54.523 million (up from -$5.614 million loss for the same quarter of the previous year)
- Diluted earnings per share: $0.39 (up from -$0.05 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 139.516 million (up from 106.915 million for the same quarter of the previous year)
- Cash and cash equivalents: $29.092 million
- Cash and cash equivalents per share: $0.21
- Cash and cash equivalents makes up 0.79% of BJ's Wholesale Club's market capital
- Cash and cash equivalents makes up 0.56% of BJ's Wholesale Club's total assets
- Receivables: $162.278 million
- Receivables makes up 3.15% of BJ's Wholesale Club's total assets
- Inventories: $1.026 billion
- Inventories makes up 19.91% of BJ's Wholesale Club's total assets
- Inventories makes up 19.91% of BJ's Wholesale Club's total assets
- Cash generated from operations for 6 months: $90.321 million
- Cash generated from operations per share for 6 months: $0.64
BJ's Wholesale Club's management commentary on the results and earnings guidance
WESTBOROUGH, Mass.--(BUSINESS WIRE)-- BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) (the "Company") today announced its financial results for the thirteen and twenty-six weeks ended August 3, 2019.“Second quarter results for sales and earnings were in line with our expectations,” said Christopher J. Baldwin, Chairman and Chief Executive Officer, BJ’s Wholesale Club. "We delivered improved margins and continued to grow earnings as we executed against our strategic priorities. Our sales were particularly strong in the second half of the quarter as weather improved, and we ended with strong momentum. We are confident that we will deliver on our full-year expectations as we continue to transform BJ’s Wholesale Club.
The image below shows the fiscal outlook for BJ's Wholesale Club
The image below shows the fiscal outlook for BJ's Wholesale Club
BJ's Wholesale Club (NYSE:BJ) stock price history
The image below shows the stock price history of BJ's Wholesale Club (NYSE: BJ) since its listing in June 2018. At its listing/IPO it was trading at around $22.00 a stock and its currently trading at $26.89 about 15 months later. Thats a decent 22.2% return provided by BJ's Wholesale Club since its listing date. The stock is also trading at a lot closer to its 52 week high of $29.56 than it is to its 52 week low of $19.31 which to us is an indication that short term sentiment and momentum of BJ's Wholesale Club stock is still very positive.
Recent coverage BJ's Wholesale Club
The extract below touched on BJ's Wholesale the day it released its latest earnings results, as obtained from Zacks.
BJ’s Wholesale Club (BJ - Free Report) , on the other hand, are up 9.75% in the early session on an earnings beat by 2 cents to 37 cents per share. Revenues of $3.35 billion were -1.55% from expectations, although up from the $3.31 billion reported a year ago. Shares had only gone up 1.8% year to date ahead of these earnings results. BJ’s has not missed earnings estimates in its (relatively short) public trading history.
Read the full article here
BJ’s Wholesale Club (BJ - Free Report) , on the other hand, are up 9.75% in the early session on an earnings beat by 2 cents to 37 cents per share. Revenues of $3.35 billion were -1.55% from expectations, although up from the $3.31 billion reported a year ago. Shares had only gone up 1.8% year to date ahead of these earnings results. BJ’s has not missed earnings estimates in its (relatively short) public trading history.
Read the full article here
BJ's Wholesale Club (NYSE: BJ) latest stock valuation
So based on the earnings report of BJ's Wholesale Club (NYSE: BJ) and what do we value BJ's Wholesale Club (BJ) stock at? Based on the earnings reported and the fiscal guidance provided by the group our valuation model provides a target (full value) price for BJ's Wholesale Club at $26.20 a stock. We therefore believe the BJ's Wholesale Club is fully valued. We would not recommend long term fundamental or value investors buy into BJ's Wholesale Club at its current price, but rather at levels at least 10% below our target (full value) price of $26.60. We see a good entry point into the stock at levels around $24 or below.