BJ’s Wholesale Club Q3 Earnings Growth Expected

in EARNINGS/INVESTING IDEAS by

BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) is scheduled to report Q3 earnings results prior to the market open on Thursday, November 21, 2019. The conference call is expected to start at 8:30 a.m. ET. The company is expected to report earnings of $0.40/share on revenue of $3.293 billion. The consensus earnings per share (EPS) of $0.40/share is based on a poll of 17 analysts and represents a growth of 2.6% over the same quarter last year when the company reported earnings of $0.39/share.

The revenue forecast of $3.293 billion based on a poll of 13 analysts implies a year-over-year (YoY) growth of 2.2%. Last year the company reported $3.222 billion in revenue for the quarter.

Expected to report EPS growth of $0.01/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $3,292.90 $3,221.66 2.2%
EPS $0.40 $0.39 2.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 5 tracked quarters, and missed expectations 1 quarter. What are your expectations from BJ’s Wholesale Club for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.37 $0.39 6.2% Beat
Q1, 2020 $0.25 $0.26 5.3% Beat
Q4, 2019 $0.36 $0.44 22.3% Beat
Q3, 2019 $0.34 $0.39 15.5% Beat
Q2, 2019 $0.32 $0.31 -2.1% Missed

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to BJ’s Wholesale Club’s stock price performance? It’s more important for some companies than for others.

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending August 3, 2019, the stock price reacted by increasing by 11.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-22 $22.55 $25.03 11.0% Increase
2019-05-23 $25.41 $26.66 4.9% Increase
2019-03-06 $26.62 $25.08 -5.8% Decline
2018-11-20 $20.07 $22.05 9.9% Increase

Fundamentals And Technical Analysis

BJ’s Wholesale Club is currently trading at $25.93/share, down -1.5% for the day. The company is trading at approximately 88.2% of its 52-week high of $29.41/share. The company’s stock price is up 15.0% since the last earnings report and down -1.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 65.08 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 17.9x and a forward P/E multiple of 17.8x. BJ’s Wholesale Club’s current share price also implies a price-to-book (P/B) multiple of -22.6x. The following table summarizes some other key fundamental ratios:

Data as of November 20, 2019
Metric Value
Last Fiscal Period FY2020.Q2
Period End Date August 3, 2019
Stock Price (Current) $25.93
P/E Ratio 17.9x
P/E Ratio (Fwd) 17.8x
PEG Ratio 1.6
Total Debt to Capital (%) 50.8%
Levered Free Cash Flow $280.5 million
Enterprise Value / EBITDA 13.0x

Source: Finbox

Company Profile: BJ’s Wholesale Club Holdings, Inc.

BJ’s Wholesale Club Holdings, Inc. is a mid-cap stock with a market capitalization of $3.6 billion and a total enterprise value of $7.424 billion. The company operates in the Consumer Staples sector and Food & Staples Retailing industry.

BJ’s Wholesale Club Holdings, Inc. operates as a warehouse club on the East Coast of the United States. It offers perishable, edible grocery, general merchandise, and non-edible grocery products. The company also sells electronics, computers, office supplies and equipment, home products, health and beauty aids, sporting goods, outdoor living, baby products, toys, and jewelry through the website.

As of September 16, 2019, it operated 217 clubs and 141 gas stations. The company was formerly known as Beacon Holding Inc. and changed its name to BJ’s Wholesale Club Holdings, Inc. in February 2018. The company is based in Westborough, Massachusetts.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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