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BJ's Wholesale Club Pulls Back to Trend: It's Time for an Entry
Written by Thomas Hughes. Published 8/25/2025.
Key Points
- BJ's Wholesale Club pulls back following the Q2 release to align the market with long-term trends: it's time to make an entry.
- There are headwinds in 2025, but this company is building leverage for when consumer trends shift.
- Analysts are bullish on this stock and see it advancing by double-digits from critical support levels.
BJ's Wholesale Club (NYSE: BJ) recent price action in late August appears muted but is actually positive for investors. While the company's results were tepid relative to analysts' expectations, they still align with a strong long-term outlook.
Today's consumer headwinds may weigh on performance, but they are also accelerating store openings and deepening market penetration, positioning BJ's for stronger growth when conditions improve.
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The key takeaway is that this retail company continues to expand, build value for investors, and trade at deep-value levels, setting up a favorable trend-following entry.
BJ's stock has been on an uptrend since 2020, gaining momentum during the COVID-19 pandemic. The market has repeatedly validated this trend, and the stock now sits near a critical level as Q3 2025 draws to a close.
That level lies close to the uptrend line and, given rising analyst sentiment, is unlikely to break. Although the FQ2 report and updated guidance prompted a few downward price-target revisions, MarketBeat data show that analyst coverage has increased over the past three quarters, consensus sentiment has improved from Hold to Moderate Buy, and the average price target implies roughly 20% upside from current levels—a potentially conservative estimate.
BJ's Wholesale Reaffirms Guidance: Leans Into Growth Strategy
BJ's Wholesale delivered a solid quarter, with revenue rising 3.3%—slightly below larger rival Walmart (NYSE: WMT) and consensus estimates. However, a sharp drop in gas prices depressed comps by more than 200 basis points, while ex-fuel comps still grew 2.3%, driven by a 9% jump in membership fees and higher store traffic.
Digital sales, a key growth pillar, surged 34% and bolstered margins. Overall, the company widened both gross and operating margins despite higher SG&A expenses, which are expected to normalize over time. SG&A rose in part due to accelerated store openings—a strategy that should drive long-term revenue and earnings.
As a result, operating income climbed 6.3%, net income rose 3.9%, and adjusted EPS increased 4.6%, outpacing revenue growth by over 100 basis points and beating consensus EPS by 450 basis points.
Management also reaffirmed full-year guidance, expecting these Q2 tailwinds to continue through year-end. Revenue growth targets were maintained, and adjusted EPS guidance was raised by six cents at the midpoint—now aligned with the consensus, and possibly conservative given current trends.
Consumers remain price-conscious, seeking value, quality, and durability in their purchases.
BJ's Delivers Value to Investors
BJ's Wholesale Club delivers value for both investors and shoppers. At the end of Q2, the balance sheet showed higher cash balances, increased current and total assets, stable liabilities, and growing shareholders' equity.
Leverage remains conservative, with long-term debt at less than 0.2x equity and supported by strong cash flow. This robust cash flow also enables significant share repurchases. In Q2, buybacks reduced the share count by roughly 1% on average, and this pace is likely to continue given the remaining $950 million authorization—enough to sustain repurchases for about 23 more quarters at the current rate.
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