Hits and Misses for BJ’s During Q2

Earnings beat expectations and sales excluding gas tick higher, while revenue slows
Lynn Petrak
Senior Editor
Lynn Petrak profile picture
BJ’s Expects IPO Price of $15 to $17 a Share
BJ's Wholesale Club held steady in its non-fuel business, as it revises the outlook for the rest of the fiscal year.

A closer look at the second quarter financial results released by BJ’s Wholesale Club reveals a fairly steady grocery business despite headwinds and an evolving market. For example, despite the fact that total comparable club sales dropped 5.3% over previous-year levels, comps excluding gasoline sales were actually up by 1.1%. The story was similar on a half-year basis, with overall comps down 1.9% for the first six months of FY2023 but 3.3% higher when removing fuel sales from the calculations.

There was some unevenness in profit and income, too, for the period ending July 29. Gross profit increased 4.3% on a year-over-year (YoY) basis to top $896.8 million, while adjusted EBITDA slid 1.8% during that time frame. Net income declined 6.9%, from $141.0 million during Q2 of 2022 to $131.3 million in the recently-concluded second quarter. Although the adjusted earnings per share (EPS) came in at $0.97 during Q2 versus $1.03 in July 2022, Wall Street analysts were expecting an EPS of $0.90.

[Read more: “Grocery Continues to Outperform at Walmart”]

There are some performance nuances in terms of store visits, too. A recent report from indicated that trips to BJ’s Wholesale Club stores were down 3% from July 2022 to July 2023, but traffic was still 6.7% higher than the pre-pandemic year of 2019.

Bob Eddy, chairman CEO of BJ’s Wholesale Club, summed up the second quarter as strong, citing gains in membership and market share. "We continue to balance gross margins with investments in value and in growing the size and quality of our membership with an eye toward the future. I’m proud of the team’s execution in the quarter and believe that we are well positioned for continued growth,” he said.

As for outlays, selling, general and administrative expenses rose to $695.0 million during the second quarter, driven by costs from new club and fuel station openings and other investments aimed at driving growth. During Q2, BJ's opened one new club and one new gas station.

The club operator has revised its full year guidance as it continues to operate in the face of headwinds. “As we look ahead, we remain confident in our ability to maintain the momentum in our traffic and market share gains due to our unrelenting focus on value. However, we also continue to navigate shifts in consumer behavior driven by the broader macroeconomic environment. As a result, we are refining our outlook for the rest of the fiscal year,” said EVP and CFO Laura Felice.

Felice reported that the company expects comps, excluding the impact of gas sales, will rise 2% YoY and adjusted EPS to be in the $3.80 to $3.92 range for the fiscal year.  

It’s shaping up to be a busy third quarter for BJ’s. The club operator is opening the membership center for its first Alabama location on Friday, Aug. 25. Additionally, BJ’s announced that its third location in Tennessee will open in the town of Goodlettsville in early 2024.

Marlborough, Mass.-based BJ’s currently operates 238 clubs and 168 BJ’s Gas locations in 19 states. The company is No. 27 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.


Also Worth Reading