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Why BJ’s Warehouse Club Stock Jumped 37% in May

By Demitri Kalogeropoulos – Jun 3, 2020 at 8:36AM

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Booming sales growth suggests the regional warehouse retailer might be winning market share from its larger peers.

What happened

BJ's Warehouse Club (BJ 0.85%) shareholders dramatically outperformed the stock market last month. The stock jumped 37% in May compared to a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to significant gains since the start of 2020, as the retailer's stock is up over 60%.

A woman examines packaged meat in a grocery store.

Image source: Getty Images.

So what

Investors applauded the chain's fiscal first-quarter earnings results, which showed booming sales growth through the early days of the COVID-19 pandemic in North America. The warehouse retailer said revenue jumped 27% at existing locations in the period compared to a 1% uptick during the prior full fiscal year. That result compared favorably to the 10% increase that Walmart's (WMT 0.75%) Sam's Club reported, and to Costco's (COST 0.12%) 8% boost.

Now what

BJ's had trailed these peers in prior quarters, so investors will be watching the next few earnings reports to see if the Q1 metrics represent a sustainable change in its market share trajectory. That's the surest way the consumer staples giant can improve its long-term profit potential while boosting shareholder returns at the same time.

Demitrios Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Stocks Mentioned

BJ's Wholesale Club Holdings, Inc. Stock Quote
BJ's Wholesale Club Holdings, Inc.
BJ
$73.43 (0.85%) $0.62
Walmart Stock Quote
Walmart
WMT
$130.67 (0.75%) $0.97
Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$472.84 (0.12%) $0.57

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