It is going to be a strong day for one of the country's largest discount variety stores; BJ's Wholesale Club (NYSE: BJ) posted strong second quarter numbers this morning. Leading up to this morning, analysts had been expecting the company show earnings of 41 cents per share, but were pleasantly surprised when actual earnings came in at 52 cents a share.Heading into the morning session, the stock climbed 3.3% in premarket trading in reaction to the strong quarter. This is exactly what the struggling stock needed, after sliding pretty sharply over the past month. After hitting a 52-week high of $39.15 back on July 13, the stock had fallen all the way down to $30.79 as of last night's close, marking a 21.3% drop in just a little over a month.
The company has been in a tough battle to regain some lost market share to some of its bigger rivals, and the recent changes made by new Chief Executive, Herb Zarkin, seem to be working. In March, Mr. Zarkin assumed his new role on a permanent basis. He immediately looked to help the company's market position by reducing the company's number of product items, and by focusing on the products that have historically produced higher margins and quicker turnover.
This quarter is the first sign that the changes are starting to kick in and produce the results that Zarkin had been looking for. Total profit for the quarter came in at a respectable $36.3 million, which marked a 37.5% increase over the $26.4 million profit that the company had for the same period last year.
Here is a 52 week chart to get a better view of just how hard shares have been hit in the last 5 weeks:
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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