BJ’s Lifts Full-Year Guidance Because of Strong Grocery Performance

Membership-based retailer BJ’s Wholesale Club reported record results during the second quarter Thursday and raised its financial forecast for the rest of the year, thanks to the strength of its grocery business during a time of soaring food inflation.

Total same-store club sales increased by 19.8% year over year as revenue increased 24%, to $5.1 billion, for the quarter ended July 30, the Westborough, Massachusetts-based wholesale club reported. BJ's grocery business remains a top growth driver, chain executives said.

“Our outlook on the business is strong given the sustained strength in our grocery business and our gains in market share,” Laura Felice, EVP and CFO of BJ's Wholesale Club told analysts Thursday morning. “We expect fiscal year 2022 comparable club sales growth, excluding the impact of gasoline sales, to be in the 4%-5% range, up from our original guidance of low single digit. While we expect continued merchandise margin rate pressure, we also expect fiscal year 2022 EPS to be in the $3.50 to $3.60 range, up from our original guidance of approximately $3.25. We remain confident that the strength of our core business and our intense focus on delivering value will continue to drive long-term growth.”

The wholesale club also reported record membership fee income of $98.8 million in the quarter—up 11.3% year over year as consumers continue to seek value during these inflationary times.

Walmart on Tuesday reported record membership in its Sam's Club banner, with membership income up 9% during the quarter. 

During the second quarter, digitally enabled sales growth at BJ's was 47.0% year over year and same-store sales, excluding gasoline sales, increased by 7.6% year over year. Same-store sales, excluding fuel, grew 7.6% year over year, BJ’s reported. Gross profit increased to $860 million in the second quarter, from $763.5 million a year ago.

“Our strong results in the second quarter were led by gains in traffic and market share as we continued to deliver tremendous value across virtually every aspect of our business,” Bob Eddy, president and CEO of BJ’s Wholesale Club, told analysts. “Our relentless focus on investing in our long-term initiatives has put us in a place to capitalize on current trends and deliver this strong performance. Our member base is growing in both quality and size. We are improving our merchandising to offer more value. We are growing our digital business, offering more convenience and optionality for our members. We are expanding our footprint into new and existing markets with success. Our business model is designed to work well in the current consumer environment where value is king and we believe we are well-positioned for growth by doing what we do best–delivering great value to our members.”

As part of the next phase of the club’s development, Eddy said expansion plans remain on track with 11 new club openings expected in fiscal year 2022, which includes expansion into the greater Indianapolis and Columbus markets.

BJ's Warehouse operates 229 clubs and 160 BJ's Gas locations in 17 states.