Why BJ's Wholesale Club Stock Rallied 16% at the Open Today
Shares of BJ's Wholesale Club (NYSE: BJ), a membership-based retailer, rose just over 16% in the first half hour of trading on Nov. 18. The big news was the company's premarket third-quarter 2021 earnings announcement. Investors clearly liked what they saw.
BJ's top line in the third quarter came in at $4.26 billion, up 14.3% from the same quarter in 2020. However, because you need to buy a membership to get into one of its stores, the revenue number really needs to be broken into two categories. Actual product sales rose 14.4% year over year, while membership fees inched up 7.7%. The first number highlights that people are out shopping and BJ's is benefiting. The second number suggests that its business model is strong, with the company's release stating, "Membership size and quality continues to improve; first-year renewal rates remain at historic levels." Both are clearly very good news for the company.
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Source Fool.com
