Please ensure Javascript is enabled for purposes of website accessibility

Why BJ's Wholesale Is Falling 9% Today

By Rich Duprey - May 20, 2021 at 11:35AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The warehouse club seems to have a less clear roadmap for the future.

What happened

BJ's Wholesale Club (BJ 0.68%) is tumbling 9% in morning trading Thursday after reporting earnings that beat estimates but failing to offer guidance for the next quarter or year because the future remains too uncertain.

So what

Many retailers are reporting stronger earnings as consumers come back to stores. Online grocery sales, for example, were $8.4 billion in April, up 16% from last year, but still down from the $9.3 billion notched in March.

Woman leaning on shopping cart

Image source: Getty Images.

Physical retail gained traction again this quarter, or as Target CEO Brian Cornell said, it's been "an enthusiastic return to in-store shopping."

It's been less so at BJ's, however. Net sales were up 1.7% to $3.78 billion, but comparable sales excluding the impact of gasoline sales declined 5% year over year. Online sales surged 381% from the year-ago period, but BJ's still suffered across-the-board declines in profits.

Now what

BJ's was still able to beat Wall Street's forecasts, but the warehouse club is still unable to see the way forward all that clearly because of the pandemic, so it declined to give any guidance.

That's markedly different from the case of many retailers, who are forecasting higher sales and profits, if not for the whole year, then for the next quarter at least. Because BJ's Wholesale Club still can't tell how things are going, the market seems to be selling off its stock in favor of companies with a clearer idea of where business is heading.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BJ's Wholesale Club Holdings, Inc. Stock Quote
BJ's Wholesale Club Holdings, Inc.
BJ
$70.98 (0.68%) $0.48
Target Corporation Stock Quote
Target Corporation
TGT
$166.97 (0.51%) $0.84

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/09/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.