On Friday, UBS updated its outlook on BJ's Wholesale Club Holdings Inc. (NYSE:BJ), increasing the price target to $97.00, up from the previous target of $89.00, while reiterating a Buy rating on the stock. The firm acknowledged the initial doubts regarding BJ's performance but pointed out the company's notable achievements in the recent quarter.
BJ's Wholesale reported a 0.6% increase in core same-store sales (SSS), which lagged behind its competitors, with Sam's Club and Costco (NASDAQ:COST) reporting 4.4% and 5.6% growth, respectively, in the first quarter. Despite the slower growth in comparison, BJ's Wholesale experienced a significant boost of approximately 300 basis points from customer traffic and saw growth in unit volumes across its perishables, grocery, and sundries division.
The general merchandise segment of BJ's Wholesale exhibited some regional variances, which were largely attributed to weather-related factors. However, the company has been performing well in key categories within this division.
The statement from UBS highlighted the resilience of BJ's Wholesale amidst skepticism and how the company managed to maintain its momentum through increased traffic and strong performances in certain product categories.
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