BJ’s Wholesale Club Earnings: Membership Hits 8M as Digital Sales Surge
- Hardik Shah
- Aug 22
- 3 min read
TLDR
Revenue Strength: Sales rose 3.2% YoY; excluding gas, comps grew 2.3%.
Margin Trends: Gross profit topped $1B, with merchandise margins up 10 bps.
Forward Outlook: EPS guidance raised to $4.20–$4.35; comps ex-gas expected to grow 2–3.5%.
Business Overview
BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) operates 255 membership warehouse clubs and 190 gas stations across 21 states. Its model focuses on delivering value through bulk groceries, fresh food, general merchandise, and fuel, complemented by a fast-growing digital platform. The company surpassed 8 million members this quarter, marking 55% growth since its IPO seven years ago.
BJ's Earnings
Revenue: Net sales rose 3.2% YoY to $5.26B. Total revenues, including membership fees, were $5.38B.
Comparable Sales: Down 0.3% including fuel, but up 2.3% ex-gas. Grocery, perishables, and sundries drove +3% comps. General Merchandise (GM) declined 2.2%, pressured by weak weather-sensitive categories like lawn & garden.
Membership Fee Income: Up 9% to $123.3M, supported by higher-tier penetration (41%) and January 2025 fee increases.
Profitability:
Gross profit: $1.01B (+5.6% YoY).
Operating income: $216.5M (+6.3%).
Net income: $150.7M (+3.9%).
EPS: $1.14 (+5.6%).
Adjusted EBITDA: $303.9M (+8.0%).
Forward Guidance
Revenue Outlook: Comps ex-gas expected +2.0% to +3.5%.
EPS Guidance: Raised to $4.20–$4.35 (from prior range).
Capital Expenditures: ~$800M for FY2025.
CFO Laura Felice noted, “We are pleased with the performance year to date… we continue to see a top line range aligned with our previous outlook, but we are narrowing and increasing our range on the bottom line.”
Operational Performance
Traffic Growth: Fourteenth consecutive quarter of traffic gains; eleventh straight quarter of market share growth.
Digital Sales: +34% YoY (56% two-year stack), driven by BOPIC (buy online, pick up in club), Express Pay, and same-day delivery.
Fresh 2.0 Initiative: Investments in perishables lifted grocery comps. Pilot clubs showed durable gains, and rollout expanded to meat & seafood with early positive results.
Inventory Discipline: Per-club inventory down 6% YoY while in-stocks improved 50 bps—described as “the best shape in five years” by CEO Bob Eddy.
Market Insights
Macro Headwinds: Unseasonably wet weather dampened Q2 demand for outdoor categories; tariff volatility creates ongoing uncertainty.
Competitive Positioning: Management emphasized BJ’s insulation from import-heavy categories versus peers, giving the club model resilience.
Category Mix: Discretionary GM softness contrasted with strength in consumables and apparel (positive low-single digit comp).
Consumer Behavior & Sentiment
CEO Bob Eddy highlighted,
“Members across all income levels turned a bit more cautious, but total spending increased per member with low-income households showing incredible loyalty.”
Shoppers leaned more into value, coupons, and private label options, signaling resilience but heightened price sensitivity.
Strategic Initiatives
Membership Growth: 8M members achieved; higher-tier penetration at record 41%.
Footprint Expansion: Five clubs opened YTD; eight more slated in H2, including entry into Dallas–Fort Worth in early 2026.
Digital Transformation: App adoption exceeded 50% of active members; digital customers show higher loyalty.
Category Transformation: Continued execution in Fresh 2.0, with GM transformation (esp. apparel) yielding share gains.
Capital Allocation
Buybacks: 375K shares repurchased in Q2 for $41.2M; ~$953M remains under authorization.
Balance Sheet: Net leverage of just 0.4x adjusted EBITDA.
Capex: $800M plan includes new club openings and digital/merchandising investments.
The Bottom Line
BJ’s delivered a resilient Q2, balancing inflation, tariffs, and volatile weather with record memberships, digital adoption, and strong margins.
Looking ahead, investors should watch:
Tariff volatility and its impact on discretionary GM.
Membership fee growth sustainability post-increase.
Expansion pace, especially entry into new geographies like Dallas–Fort Worth.
As Eddy summed up, “We are improving the quality of our membership base, making merchandise more compelling, and expanding digital and physical reach. This is the time for club retail.”
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