BJ's Wholesale Club (NYSE: BJ - option chain) shares are falling today despite reporting second-quarter profit that beat estimates and announcing a share buyback. This is possibly because discretionary item spending slowed. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BJ or similar companies like COST.

This morning, BJ opened at $38.60. So far today the stock has hit a low of $37.11 and a high of $38.98. As of 12:45, BJ is trading at $37.99, down $2.69 (-6.6%). The chart for BJ looks neutral and S&P gives BJ a neutral 3 STARS (out of 5) hold ranking.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in two months as long as BJ is below $45 at October expiration. BJ's would have to rise by more than 18% before we would start to lose money.

BJ hasn't been above $45 at all in the past year and has shown resistance around $43 recently.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in BJ.

Some of the country's largest retail chains had good June sales, benefitting from consumers looking for a place to spend their tax rebates, but this was not the case for higher-priced department stores. Retailers offering big discounts were among the privileges ones as consumers chose to stay away from high prices.

Consumers spent on the basics, looking for bargains, boosting sales at some companies like Wal-Mart (NYSE: WMT), but resulting in losses for the others like Nordstrom (NYSE: JWN) and American Eagle (NYSE: AEO). This confirmed that retailers will face further weak demand even during the back-to-school shopping season, and more deep discounts will be needed.

As June is considered a key month for sales, merchants were hoping for a "stimulus" effect from tax rebates, despite worries tied to soaring gasoline and food costs. However, only companies offering cheaper gas like Wal-Mart, Costco (NASDAQ: COST) and BJ's Wholesale Club (NYSE: BJ) saw their dreams accomplished. Thus, Wal-Mart came with June sales growth of 4.3%, Costco reported a 9% increase in June same-store sales, while BJ's Wholesale saw a growth of 16.5%.

The Wall Street Journal reports that BJ's Wholesale Club (NYSE: BJ) reported a 26% rise in net income. Its earnings of 29 cents a share beat analysts' expectations by a penny. And as consumers go on their crash recession diet, BJ's is likely to continue to exceed expectations. I would not be surprised if its stock keeps rising.

That's because results are growing faster than had been expected. The Journal reports that BJ's revenue climbed 12% to $2.31 billion. Earlier this month, BJ's said net sales increased 12% to $2.26 billion, as same-store sales rose 9.6%, with gasoline sales contributing 3.9 percentage points to the rise. And BJ's raised its EPS guidance by six cents to $2.04 to $2.14 a share. The mean estimate was $2.06 a share.

BJ's joins two beneficiaries of consumers' recession diet -- Wal-Mart Stores (NYSE: WMT) and TJX Co's (NYSE: TJX) -- caused by the rising price of gasoline coupled with flat income and collapsed housing values. After all, if you can't borrow against your house and your credit cards are maxed out, where are you going to turn to keep your family functioning?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.