BJ - Embedded Expectations Analysis - 2021 10 04
BJ's Wholesale Club Holdings, Inc. (BJ:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 20.2x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about membership renewal rates, inflationary pressures, and global supply chain challenges.Specifically, management may lack confidence in their ability to sustain strong membership renewal rates, high member engagement, and mitigate inflationary pressures. Similarly, they may have concerns about the impact of global supply chain challenges on the business. Furthermore, management may lack confidence in their ability to open new clubs, continue transforming their balance sheet, and maintain an industry-leading app rating. Moreover, they may have concerns about the approval progress of their digital EBT payment service and they may be exaggerating the benefits of their human capital and membership investments, as well as their focus on long-term growth.
BJ's Wholesale Club holding is a holding company. Through its subsidiary, the company is a warehouse club operator. The company delivers value to its members, consistently providing 25% or more savings on a representative basket of manufacturer-branded groceries compared. The company provides a curated assortment focused on perishable products, continuously refreshed general merchandise, gasoline and other ancillary services to deliver a shopping experience. The company operates warehouse club in New York, Florida, Massachusetts, New Jersey, Pennsylvania, Connecticut, Virginia, Maryland, North Carolina, New Hampshire, Ohio, Georgia, Delaware, Maine, Rhode Island and South Carolina.
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