Shares of BJ’s Wholesale Club Holdings Inc. took a dive Friday, after the membership-based warehouse retailer reported a surprise dip in fiscal third-quarter same-store sales and cut its full-year outlook, citing “shifts in consumer behavior” driven by the broader economic environment.
The miss in same-store sales, or sales from stores open more than a year, offset profit and revenue that beat expectations, which were fueled by “accelerating membership growth, robust traffic gains and continued increases in market share.”
The stock
BJ,
sank 3.9% in afternoon trading, toward a three-month closing low.
Net income for the quarter to Oct. 28 rose to $130.5 million, or 97 cents a share, from $129.9 million, or 95 cents a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share slipped to 98 cents from 99 cents but beat the FactSet consensus of 95 cents.
Total revenue grew 2.9% to $4.925 billion, to top the FactSet consensus of $4.899, as sales increased 2.8% to $4.82 billion and membership fee income rose 6.6% to $106.1 million.
Meanwhile, same-store sales excluding gasoline sales declined 0.1%, while the FactSet consensus called for a 1.0% rise. That marked the third straight quarter that BJ’s has missed same-store sales expectations, according to FactSet data.
“As expected, inflationary trends, [while] still present, were significantly lower than last year and second-quarter levels,” said Chief Executive Bob Eddy in a post-earnings conference call, according to an AlphaSense transcript. “We experienced more disinflation during the quarter than we expected particularly in our perishable food business.”
Basically, lower prices led to lower sales, even as traffic increased.
The company reiterated its adjusted EPS guidance range for fiscal 2023 of $3.80 to $3.92, which surrounds the current FactSet consensus of $3.85.
But for same-store sales, BJ’s expects a decline of 2% to an increase of 1% for the fourth quarter, and lowered its full-year guidance to 1.0%-to-1.8% growth from “approximately 2%.”
“As we look ahead to the rest of the year, we remain confident in our ability to maintain the momentum in our traffic and market share gains due to our unrelenting focus on value,” said Chief Financial Officer Laura Felice. “We also continue to navigate shifts in consumer behavior driven by the broader macroeconomic environment. As a result, we are refining our sales outlook for the rest of the year.”
BJ’s stock has shed 5.2% over the past three months, while shares of rival Costco Wholesale Corp.
COST,
have gained 5.3% and the S&P 500
SPX,
has tacked on 3.3%.
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