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BJ's Wholesale Club (BJ) Unveils Growth Plans to Open 4 Clubs

Zacks Equity Research

BJ's Wholesale Club Holdings, Inc.’s BJ focus on simplifying assortments, boosting marketing and merchandising capabilities, expanding into high-demand categories as well as building its own brands portfolio bodes well. Recently, management unveiled its expansion plans with the announcement of opening four clubs in the near future as part of its 2022 development plans.

Via these openings, BJ's Wholesale Club looks to offer the latest approach to the wholesale club experience, boosting members’ value. The latest clubs will locate in Noblesville, IN, New Albany, OH, Wayne, N.J and Midlothian, VA.

We note that this renowned warehouse club operator is entering the 18th state, as the Noblesville club will be the first BJ’s Wholesale Club in Indiana. The New Albany marks the seventh location in Ohio, while the Midlothian and Wayne clubs seem to fortify BJ’s footprint in Virginia (13 clubs) and New Jersey (23 clubs), respectively. Currently, BJ operates 229 clubs and 160 BJ's Gas locations across 17 states.

The aforesaid clubs look to offer a seamless experience to the members, featuring an extensive range of fresh foods, a full-service deli and household essentials, including paper products, cleaning products, pet supplies and a lot more. Members can also get various assortments, including apparel, seasonal items, toys, hot tech and local products, all in a one-stop shop.

Excitingly, members have the opportunity to save higher as the clubs will feature a BJ’s Gas station. Members can save up to 25% on grocery store prices daily or can stack savings using BJ’s coupons on top of the manufacturers’ coupons. Shoppers can also try BJ’s risk-free with its 100% money-back guaranteed membership. Members can conveniently shop through multiple options like BJs.com, the BJ’s mobile app, digital coupons, buy online, pick up in-club, curbside pickup, same-day delivery, Same-Day Select and ExpressPay.

What’s More?

BJ's Wholesale Club continues channelizing its resources toward expanding digital capabilities to better engage with members and provide them with shopping convenience. BJ has been sparing no effort to bolster omni-channel operations and ramp up delivery services. Digitally-enabled sales rose 26% in the first quarter of fiscal 2022 and more than 400% on a three-year stacked basis. Clubs fulfill approximately 80% of digitally enabled sales.

To make shopping comfortable, BJ’s Wholesale Club through Citizens Pay offers a buy now, pay later payment option to its members for purchases made above $99 through its website for delivery and with buy online, pick up in-club and curbside pick-up options.

Additionally, BJ's ExpressPay allows members to scan items as they shop and pay for their purchases in the BJ’s mobile app. BJ's Wholesale Club also teamed up with DoorDash to provide on-demand grocery delivery from its stores.

Shares of this presently Zacks Rank #3 (Hold) player have increased 19.8% in the past six months against the industry’s 12.1% decline.

Stocks to Consider

Some better-ranked stocks are Aaron’s AAN, Costco COST and Kroger KR.

Aaron’s, a manufacturer, marketer and distributor of spices, seasoning mixes and condiments, currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Aaron’s current financial-year sales suggests growth of 27.9% from the year-ago reported figure. AAN has a trailing four-quarter earnings surprise of 52.7%, on average.

Costco, a leading warehouse club operator, carries a Zacks Rank of 2 (Buy), currently. COST has a trailing four-quarter earnings surprise of 9.7%, on average.

The Zacks Consensus Estimate for Costco’s fiscal 2022 sales and earnings per share (EPS) suggests growth of 14.5% and 16.9%, respectively, from the corresponding last fiscal year’s tallies. COST has an expected EPS growth rate of 9.2% for three-five years.

Kroger, the renowned grocery retailer, is Zacks #2 Ranked at present. KR has an expected EPS growth rate of 11.4% for three-five years.

The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 4.6% and 4.1%, respectively, from the corresponding year-ago reported numbers. KR has a trailing four-quarter earnings surprise of 22.1%, on average.


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Zacks Investment Research