BJ’s Keeps Winning in Q2
Coming off the heels of a robust first quarter, BJ's Wholesale Club has released a similarly positive report for Q2 and the first half of fiscal 2024, ended Aug. 3. In addition to increased comps and membership fee income, the retailer has seen strong growth in both traffic and unit volume.
During Q2, BJ’s saw comparable club sales increase by 3.1% year-over-year (YoY), while comparable club sales, excluding gasoline sales, increased by 2.4%. Digitally enabled comparable sales, meanwhile, grew 22% YoY and membership fee income rose by 9.1% to $113.1 million.
According to data from Placer.ai, visits to BJ’s were up 7.4% YoY during Q2, and increased 5.6% in July, 12.3% in June and 8.2% in May.
“Our second quarter was marked by robust membership, accelerating traffic and unit growth, and a fast-tracking digital business, which led to strong performance in the quarter,” said BJ’s Chairman and CEO Bob Eddy. “This was our 10th consecutive quarter of traffic growth. We are driving healthy membership expansion across both existing and new clubs. Our compelling value proposition is resonating with our members and we believe our results demonstrate the meaningful progress we are making on our long term strategic initiatives.”
Continued Eddy: “I am proud of our team members for their continued dedication to our purpose of ‘taking care of the families who depend on us’. We will continue to invest in the long term success of our company and we remain excited about our future.”
Also in Q2, BJ’s gross profit increased to $956.6 million, while merchandise gross margin rate increased by 10 basis points YOY, which the company says was primarily driven by improved inventory cost management. Net income increased to $145 million and adjusted EBITDA rose 4.9% to $281.3 million.
The retailer also lived up to its ambitious expansion plans during the quarter, revealing the locations of two new clubs that will welcome shoppers early next year. One store, slated to open in Hanover Township, N.J., will be the BJ’s 25th site in that state. Another club is set to attract members in the growing market of Southern Pines, N.C.
As for the first half of FY24, BJ’s saw total comparable club sales lift 2.4% YoY, and gross profit increased to $1,840.0 million during the same time period. Merchandise gross margin rate decreased by 20 basis points during the half, primarily driven by lower ancillary income.
“As we look ahead, we remain confident in our ability to drive long-term growth and shareholder value led by our continued focus on executing our strategic priorities and delivering significant value to our members,” said Laura Felice, EVP and CFO. “With respect to our outlook, we continue to expect fiscal 2024 comparable club sales, excluding the impact of gasoline sales, to increase 1% to 2% year-over-year, with traffic and unit growth as well as a strong perishables business likely driving us to the higher end of the range. Our business model and long-term strategies have allowed us to invest in our value proposition to help our members stretch their dollar.”
Marlborough, Mass.-based BJ’s currently operates more than 240 clubs and 170-plus BJ’s Gas locations in 20 states. The company is No. 30 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
