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BJ's Wholesale (BJ) Lined Up for Q3 Earnings: What's in Store?

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BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) is likely to register an increase in the top line when it reports third-quarter fiscal 2022 results on Nov 17 before market open. The Zacks Consensus Estimate for revenues is pegged at $4.62 billion, indicating growth of 8.3% from the prior-year reported figure.

The bottom line of this operator of membership warehouse clubs is expected to decline year over year. Although the consensus estimate has risen 5% over the past 30 days, it suggests a decline of 7.7% from the year-ago period.

BJ's Wholesale has a trailing four-quarter earnings surprise of 16.5%, on average. In the last reported quarter, this Westborough-based company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 27.7%.

We expect total revenues to be up 7.6% year over year to $4,586.4 million and the bottom line to decline 11% to 81 cents a share.

Factors to Note

BJ's Wholesale’s focus on simplifying assortments, boosting marketing and merchandising capabilities, expanding into high-demand categories and building an own-brand portfolio is commendable. The company remains committed to enhancing omnichannel capabilities and providing value for customers. These endeavors have been contributing to growth in membership signups and renewals.

The company has been directing resources toward expanding digital capabilities to better engage with members and provide them with a convenient way to shop, including same-day delivery, curbside pickup and buy-online, pickup in-club. Management believes that digitally engaged members have higher average baskets and make more trips per year than members who shop in-club only. Also, the company’s acquisition of the perishable supply chain from Burris Logistics puts it in an advantageous position to scale up supply-chain capabilities and expand fresh food offerings.

Thus, BJ's Wholesale’s better pricing, private label offerings, merchandise initiatives and digital solutions are likely to have favorably impacted the to-be-reported quarter’s performance. We expect total comparable club sales to increase 4.6%. Excluding gasoline sales, we expect comparable club sales to improve 1.6%.

However, margins remain an area to watch. Higher freight costs, investments in inflationary categories and markdowns in general merchandise inventory might have hurt merchandise margins.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for BJ's Wholesale Club this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

BJ's Wholesale Club has a Zacks Rank #2 but an Earnings ESP of -4.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General (DG - Free Report) currently has an Earnings ESP of +2.35% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of $2.54 suggests an increase of 22.1% from the year-ago quarter.

Dollar General’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $9.43 billion, which suggests a rise of 10.7% from the figure reported in the prior-year quarter. DG delivered an earnings beat of 2.2%, on average, in the trailing four quarters.

Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +6.57% and a Zacks Rank #3. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of $1.16 suggests an increase of 20.8% from the year-ago quarter.

Dollar Tree’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $6.83 billion, which suggests a rise of 6.5% from the figure reported in the prior-year quarter. DLTR delivered an earnings beat of 8.6%, on average, in the trailing four quarters.

Five Below (FIVE - Free Report) currently has an Earnings ESP of +10.31% and a Zacks Rank #3. The company is likely to register a bottom-line decline when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 14 cents suggests a decline of 67.4% from the year-ago quarter.

Five Below's top line is expected to increase marginally year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $611.2 million, which indicates an increase of 0.6% from the figure reported in the prior-year quarter. FIVE has a trailing four-quarter earnings surprise of 11.6%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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