What Happened?

Shares of membership-only discount retailer BJ’s Wholesale Club (NYSE:BJ) jumped 11.7% in the morning session after the company reported strong third-quarter results which blew past analysts' EPS expectations. Full-year EPS guidance was also raised, which is promising. While sales were in line with expectations, management called out some encouraging demand indicators as it hit a milestone of 7.5 million Club members. The company also announced plans for the first membership fee increase in seven years, effective January 1, 2025. The fee increase should boost sales and margins if demand trends maintain the improved momentum. Overall, we think this was still a solid quarter with some key areas of upside, especially after Target (NYSE:TGT) missed badly the previous day.

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What The Market Is Telling Us

BJ’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for BJ's and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 9 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 positive 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 37.5% since the beginning of the year, and at $92.73 per share, has set a new 52-week high. Investors who bought $1,000 worth of BJ’s shares 5 years ago would now be looking at an investment worth $3,890.

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