Buying BJ’s Wholesale, Chipmaking At Wolfspeed & Walmart Supports “Creators”
What’s Grocer Than Gross?
Hey, Great Ones!
Y’all remember how we talked about how the entire retail sector is struggling due to soaring prices and sapped consumers?
I mean, I hope you remember. It was yesterday.
Well, apparently, not all retailers are created equal.
For example, BJ’s Wholesale Club (NYSE: BJ) just entered the earnings confessional this morning and absolutely blew the doors off the place.
It was a wholesale slaughter of Wall Street’s expectations across the board:
Earnings per share: $1.06 versus $0.80 expected.
Revenue: $5.1 billion versus $4.7 billion expected.
Now, as we all know, earnings and revenue beats from the prior quarter don’t mean diddly squat right now.
Investors no longer care what you did during the past three months, let alone what you did yesterday.
They’ve taken a page out of Janet Jackson’s playbook, chanting: “What have you done for me lately?”
Well, BJ’s answered that call in spades. The company boosted full-year earnings guidance to a range of $3.50 per share to $3.60 per share.
Furthermore, BJ’s also lifted its revenue outlook from flat to growth of 4% to 5%.
Wall Street had set its full-year BJ’s earnings target at $3.33 per share on revenue growth in the low single digits.
“Our outlook on the business is strong given the sustained strength in our grocery business and our gains in market share,” said Chief Financial Officer Laura Felice.
Unsurprisingly — or maybe surprisingly, given this crazy market — BJ stock surged more than 8% on the news. As well it should.
Wait … why do I get this feeling of foreboding?
Because y’all know me too well. Yes, BJ’s looks like an absolutely solid investment right now. The company has everything going for it:
Strong sales growth for a grocer.
Products everyone needs regardless of economic conditions.
Considerable pricing power.
That last one is the real kicker here. Remember last month when Kroger (NYSE: KR) issued a beat-and-raise quarterly report? And now BJ’s just issued a beat-and-raise quarter.
I wonder if there’s a common thread there? Let’s see…
Both operate massive grocery store chains. Both sell lots of food.
Great Ones, what are the two biggest drivers of inflation this year? Energy (aka oil and gasoline) and …. food!
Remember that pricing power we talked about? Yeah, that’s what Wall Street calls it when a company can raise prices and customers keep buying, even during a recession.
What my family called it growing up was: “Well, I guess we’re putting off buying a few things this month.”
Don’t get me wrong. I’m eyeing BJ’s and several other grocery-related retail stocks for potential investment opportunities. I’m just not all that happy about why these companies are doing so well. And y’all know the real why, whether you want to admit it or not.
Besides, BJ stock just hit an all-time high, so now’s probably not the best time to jump on board. But given how much “pricing power” the company has right now … and will have even if the recession deepens … the stock should definitely be on your radar.
But if you’re not in the mood for BJ’s, don’t worry … we’ve got you covered as far as the “free samples” go.
How about a sample of what Adam O’Dell’s been dishing out?
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Like … Canada?
Umm, you do know they do have the sun in Canada, right? At least most of the year…
Still, Canada might not be your first thought when you hear “solar power,” and that’s probably for a good reason … which is why Canadian Solar (Nasdaq: CSIQ) sells its solar equipment worldwide and not just in Canada.
You’ve said “Canada” a lot, cool — usually you get on with the story by now.
You are spare parts, aren’t you, bud? I suggest you let that one marinate.
Right, ahem. Canadian Solar sold more solar module units than expected. Revenue shot up 62% year over year. The company beat expectations on basically all fronts. (Concise enough for ya?)
Mind you, Canadian Solar works on both residential and commercial levels, with some extra solar plant utilities thrown in for good measure. With a report like that, it’s no surprise that CSIQ shot up 18% on the open.
And gee, at a time when oil costs soared, more people took it upon themselves to get hooked up with solar. What a coincidence…
She may not look like much, but she’s got it where it counts, kid. I’ve made a lot of special modifications myself…
Bragging up your imaginary Millennium Falcon again?
Hey, fella, it’s not imaginary … I built it out of Lego. (The big-@$$ 7,541 piece one too.) But anyway…
Chipmaker Wolfspeed (NYSE: WOLF) is not in these virtual pages because of its name but its glowing earnings announcement … and OK, the baller name helped too. Who wouldn’t want their semiconductors running at Wolfspeed? Anyway…
Wolfspeed upped its quarterly guidance, now expecting revenue between $232.5 million and $247.5 million — much higher than the Street’s forecast of about $226 million. So what’s with the sudden positivity?
Here’s a hint: Wolfspeed just narrowed its losses to $0.50 per share from $1.26 per share a year earlier. Better still, revenue jumped from $148.5 million to $228.5 million. Even gross margins improved by 5%.
Who’s hungry like the wolf now?
How To Talk Walmart & Influence People
No, no matter how many times I repeat it … this still ain’t sitting right with me.
Walmart (NYSE: WMT) is thinking of starting a platform where influencers try and get you to buy Walmart products.
Yeah, you read that right. If you weren’t completely sold on that particle board “wood” coffee table you saw on Walmart.com, maybe the paid opinions of some random people on social media might do the trick!
Now, Walmart’s exact plans are unclear, but ever since the company filed trademarks for “Walmart Creator” and “Walmart Creator Collective,” the rumor mill has been a-spinnin’.
Influencer marketing itself is nothing new — especially for all y’all Great Ones following us on TikTok. And it was only a matter of time before Walmart sunk its profit-thirsty teeth into the space.
Stockings Full Of Discount Kohl
With all the earnings reports we’ve romped through over the years, you should know that what the financial media tells us is very rarely what’s actually going on behind the scenes. Something, something … fed narratives and all that.
But every now and then? Sometimes … reality is exactly, nay, succinctly summed up in the briefest of headlines.
According to Barron’s: “Kohl’s Cuts Outlook Blaming Inflation. The Stock Is Down.” And that’s pretty much all anyone not invested in Kohl’s (NYSE: KSS) needs to know. Talk about not burying the lead. It gave it all away in one.
But for any poor KSS investors out there? You should probably know how bad things truly are.
Kohl’s just dropped its per-share earnings guidance from a range of $6.45 to $6.85 down to a range of $2.80 to $3.20. Considering analysts wanted $4.04 per share for the full year … that’s no bueno.
404. Earnings not found.
The company’s management had no grand plans or exciting explanations as to why earnings expectations keep getting more pessimistic. Everyone knows people are spending less on things they don’t really need and, well … this is Kohl’s. Most of it is stuff you don’t really need.
So now, Kohl’s sees sales slipping 5% or 6% this year, whereas it previously expected sales to be flat or slightly increasing.
Guess how that went over with investors? Not great, Bob.
What do you think, Great Ones? Any of you invested in Kohl’s? Anyone still going to Kohl’s? What’s the deal with Walmart’s influencers? And I know you’re already writing us an email on grocery stores’ “pricing power”…
Whatever you want to rant, rave, vent or ramble about, send it to our inbox: GreatStuffToday@BanyanHill.com. Write to us!
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