BJ’s Reports Record Q3, Raises FY22 Guidance

Club retailer opened 3 new locations during the quarter

11/17/2022

BJ's had a record Q3 and is planning for even more growth for the rest of FY22.

Amid a spate of new store openings stretching from Indiana to New York, BJ’s Wholesale Club is sharing a positive earnings report for the third quarter ending Oct. 29. Strong comparable sales growth punctuated the retailer’s record Q3.

BJ’s saw sales growth across several segments, with total comparable club sales increasing 9.7% year over year, and comparable club sales, excluding gasoline sales, increasing 5.3%. Membership fee income increased 8.7% to $99.5 million and digitally enabled sales growth was 43.0%.

“We reported another quarter of strong results, demonstrating the power of our business model,” said Bob Eddy, president and CEO of BJ’s. “Our consistent focus on delivering value to our members at a time when they need it most will bolster our business for the future. Our member base is growing in both size and quality.”

Continued Eddy: “We are improving our merchandising to deliver amazing value. We are offering more convenience for our members through a great digital experience. We are expanding our footprint into new and existing markets. We have a great team and a competitive strategy, and the investments we continue to make in our company position us well for long-term growth and sustainable value creation.”

The retailer also reported earnings per diluted share of $0.95, reflecting a 3.3% year-over-year increase, and adjusted earnings per diluted share of $0.99, or an 8.8% increase. Cash from operating activities was $173.1 million during the third quarter and free cash flow was $78.7 million.

Selling, general and administrative expenses rose during the quarter to $674.4 million, which the company attributes to increased labor and occupancy costs as a result of new club and gas station openings, as well as incremental costs related to the transition of its new home office in Marlborough, Mass. Adjusted EBITDA increased 19.2% to $272.3 million in the third quarter, compared to $228.4 million in the third quarter of fiscal 2021.

BJ’s positive Q3 has prompted the company to raise its fiscal outlook for the rest of FY22.

“We are optimistic about the outlook on our business given the sustained strength in our grocery business and our gains in market share,” said Laura Felice, EVP and CFO. “We now expect fiscal year 2022 comparable club sales growth, excluding the impact of gasoline sales, to be in the 5.0% to 5.5% range. While we expect continued merchandise margin rate pressure, we also now expect fiscal year 2022 EPS to be in the $3.70 to $3.80 range. We remain confident that the strength of our core business and our intense focus on delivering value will continue to drive long-term growth.”

There have been several new store openings so far in fourth quarter, with the retailer re-entering Central Ohio after a 20-year hiatus. BJ’s also widened its footprint in New York last month with the opening of a store in Greenburgh.

Additionally, BJ’s recently completed a move of its corporate headquarters from Westborough, Mass., to its new Club Support Center, located at 350 Campus Drive in Marlborough, Mass. The new state-of-the-art facility incorporates modern open-space concepts and the latest technology to serve BJ’s 1,000-plus team members who work at the new location.

Marlborough, Mass.-based BJ's operates more than 230 clubs, 163 BJ’s Gas locations and seven distribution centers in 18 states. The company is No. 26 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.