Why BJ's (BJ) Shares Are Getting Obliterated Today

What Happened:

Shares of membership-only discount retailer BJ’s Wholesale Club (NYSE:BJ) fell 7.4% in the pre-market session after the company reported second quarter earnings results and provided an underwhelming full-year earnings forecast. On the other hand, BJ's beat analysts' EPS expectations, and its revenue outperformed Wall Street's estimates. Zooming out, we think this was a decent quarter, but the guidance is dragging down shares.

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What is the market telling us:

BJ's’s shares are not very volatile than the market average and over the last year have had only 3 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 6 months ago, when the stock gained 8.7% on the news that the company reported fourth-quarter results that slightly topped analysts' EPS expectations. On the other hand, its full-year earnings forecast missed analysts' expectations. Revenue also missed by a narrow margin during the quarter. Regardless, management remained upbeat as the company continued to record strong membership growth alongside market share gains in clubs and pumps due to "acceleration in traffic and growth in units sold." Overall, the results were mixed, with the market likely shrugging off the negatives.

BJ's is up 21.2% since the beginning of the year, but at $81.56 per share it is still trading 10.7% below its 52-week high of $91.38 from July 2024. Investors who bought $1,000 worth of BJ's’s shares 5 years ago would now be looking at an investment worth $3,087.

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