10 Best Discount Retailer Stocks to Buy

7. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ)

Number of Hedge Fund Holders: 34

BJ’s Wholesale Club Holdings (NYSE:BJ), commonly known as BJ’s, is an American membership-only warehouse club chain that operates in the eastern United States, including Alabama, Tennessee, Ohio, Michigan, and Indiana. The company currently runs around 215 clubs in 16 states, stretching from Florida to Maine. It offers general merchandise, groceries, gasoline, and other ancillary services, promotions, and coupon books.

In its Q2 2024 earnings report, BJ’s Wholesale Club Holdings Inc. (NYSE:BJ) reported strong results with earnings per share (EPS) of $1.08 and revenue of $5.2 billion, reflecting a 5% increase from the previous year. This growth was driven by higher membership renewals, increased same-store sales, and strong performance in digital channels, bolstered by the company’s focus on value and private-label products.

Looking ahead, BJ’s Wholesale Club Holdings Inc. (NYSE:BJ) aggressive expansion plans, including opening new clubs in key markets, are expected to drive additional sales growth and capture a larger share of the warehouse club market. Investments in digital and omnichannel capabilities, such as enhanced online shopping and expanded curbside pickup and delivery options, are likely to attract more customers and boost sales.

The company’s most prominent market of long-term success is its 9% growth in membership fees in Q2 2024, its largest member count growth in a quarter since the pandemic. BJ’s Wholesale Club Holdings (NYSE:BJ) also saw strong membership renewal rates and strong growth in premium tier memberships. The company’s expanding digital presence provides a competitive advantage in an increasingly digital industry.

BJ’s Wholesale Club Holdings (NYSE:BJ) is organically expanding its member base in the existing market through its renewals and acquisition efforts. The company’s next membership milestone is to take the count to 7.5 million members, which it expects to reach in the back half of the year. 34 hedge funds hold stakes in the company as of Q2 2024.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) in its first quarter 2024 investor letter:

“Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, or premium brands. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) operates membership warehouse clubs. Its shares gained 14% after it reported better-than-expected comparable sales growth, in-line revenues, and earnings for its fiscal fourth quarter. Highlights of the quarter were increased membership and customer traffic.”