BJ's Wholesale Club
Background Among the beneficiaries of state-wide lockdowns due to COVID-19 and sudden surge in grocery demand is BJ’s warehouse club who reported a record 27% in merchandise comparable sales for Q1 2020. Since 2018, the company has continuously communicated to investors its strategic plan for long-term growth consisting of, among other things, better in-house assortment of merchandise and stronger focus on acquiring members in its high tier program (BJ’s Reward and co-branded Mastercard). Following strong 1Q 20 earnings, the market has begun pricing in what is shaping out to be a favorable outlook for the company; currently offering a 17% buying opportunity. Thesis The company’s fundamentals have been strengthening quarter to quarter with strong tail winds shaping a long-term runway for growth. BJ’s has made incremental progress over the past few years, among which are scaling their digital capabilities (engaging more members in buy-online-pick-up-in-club or BOPIC activities) that tend...