BJ's Wholesale Q3 Earnings on Deck: Will BJ Surprise Wall Street?

BJ's Wholesale Club Holdings, Inc. BJ is likely to register an increase in the top line when it reports third-quarter fiscal 2025 results on Nov. 21, before the opening bell. The Zacks Consensus Estimate for revenues stands at $5.35 billion, calling for a 5% increase from the prior-year reported figure.

Despite anticipated top-line growth, the membership-warehouse retailer is projected to post a year-over-year decline in its bottom line. The Zacks Consensus Estimate for third-quarter earnings has held steady at $1.10 per share over the past 30 days, indicating a potential 6.8% drop from the prior-year period.

BJ's Wholesale has a trailing four-quarter earnings surprise of 16.4%, on average. In the last reported quarter, this Marlborough, MA-based company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 3.6%.

BJ's Wholesale Club Holdings, Inc. Price, Consensus and EPS Surprise

BJ's Wholesale Club Holdings, Inc. price-consensus-eps-surprise-chart | BJ's Wholesale Club Holdings, Inc. Quote

What’s Shaping BJ’s Wholesale’s Upcoming Earnings?

BJ's Wholesale Club's third-quarter results probably benefited from the ongoing strength of its membership-focused model. Increased member engagement, higher-tier penetration and strong renewal trends provide a steady stream of recurring revenues that support traffic and boost merchandise performance. This dynamic often becomes even more visible in softer consumer environments, as households shift toward value-oriented shopping. As BJ's enhances its value perception and expands through new club openings, the company is likely to experience steady demand in its core consumables and perishables categories.

Another likely positive factor for the third quarter is BJ's ongoing digital growth, including same-day services, in-club fulfillment and mobile-enabled shopping. Digitally active members tend to have higher average baskets and visit more often than members who shop in-store only. The company's focus on convenience via order pickup, delivery partnerships and app-based checkout is also resonating well with customers. These trends probably provided an additional boost to BJ's comparable store sales. We expect merchandise comparable club sales to rise 2.6% for the quarter.

BJ's Wholesale has been refining its product assortments, improving stock levels and upgrading quality across key traffic-driving departments. The strength in staples and household essentials helps offset uncertainty in discretionary spending, allowing BJ's to maintain stable shopping patterns even as some higher-priced categories remain under pressure across the retail industry. 

The company may have experienced margin pressures due to a cautious consumer environment and softness in discretionary categories. Industry trends indicate shoppers remain selective, focusing on essentials while pulling back on general merchandise, seasonal and higher-ticket items. Additionally, potential deleverage in SG&A expenses could impact margins. We anticipate SG&A expenses to increase 7.9% year over year in the third quarter, leading to a 40-basis-point contraction in the operating margin.

What the Zacks Model Predicts for BJ

As investors prepare for BJ's third-quarter announcement, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for BJ's Wholesale 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 has a Zacks Rank #3 but an Earnings ESP of -0.34%. 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 three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Ollie's Bargain Outlet Holdings, Inc. OLLI currently has an Earnings ESP of +6.54% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter fiscal 2025 earnings per share is pegged at 71 cents, implying a 22.4% year-over-year decline. 

Ollie's Bargain’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $615.7 million, which indicates an increase of 19% from the figure reported in the prior-year quarter. OLLI has a trailing four-quarter earnings surprise of 4.2%, on average.

Five Below, Inc. FIVE has an Earnings ESP of +74.71% and currently carries a Zacks Rank of 2. FIVE’s top line is anticipated to advance year over year when it reports third-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $969.9 million, which suggests a 15% rise from the figure reported in the year-ago quarter. 

The company is expected to register a decrease in the bottom line. The consensus estimate for Five Below’s third-quarter earnings is pinned at 22 cents a share, suggesting a decline of 47.6% from the year-ago quarter. FIVE has a trailing four-quarter earnings surprise of 50.5%, on average.

Burlington Stores, Inc. BURL has an Earnings ESP of +3.24% and currently carries a Zacks Rank of 3. BURL’s top line is expected to advance year over year when it reports third-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.71 billion, which suggests a 7.1% jump from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Burlington Stores’ third-quarter earnings stands at $1.59 per share, calling for 2.6% growth from the year-ago quarter. BURL has a trailing four-quarter earnings surprise of 11.7%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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