It's one quarter later, and there's still not much new with BJ'sWholesale
Companywide revenue growth was once again mediocre, up 6.3%, and same-store sales growth notched another unimpressive 2%, even with a big contribution from gasoline sales. Stop me if you've heard this before: Traffic was down about 3%, food comps were up slightly, and merchandise comps dropped again. Given that last item, I'm not sorry to see a new head of merchandising for the company.
It doesn't really get much better after the top line. Gross margins slipped slightly, and operating income was down, no matter how much jerry-rigging you do to add back stock compensation expenses, credit card claims, and so forth. Though I'm no great fan of looking at quarter-by-quarter cash flow, operating cash flow was nevertheless down more than one-third.
If there's any good news, it comes outside of the financial results. Management expressed displeasure with traffic trends, but I'm still not confident that they really get the nature of the problem. More advertising may get people into the stores, but they're not going to come back when they see how dirty those stores often are (all the ones in my area, at least) and experience the wonders of out-of-stock positions for on-sale items. I can applaud the desire to run a bare-bones, low-cost operation, but not at the price of the basic shopper experience.
So is BJ's doomed to be pushed out by Wal-Mart
Looking at the stock, I find a bit of a head-scratcher here. I mean, this looks really cheap . if some major changes are made in how the company runs itself. And while I wouldn't rule out the possibility that a bidder might emerge, I just can't bring myself to think that today's management team is up to the job of producing solid long-term performance here.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).